Course Name : M0034 - Information and Business Process Year : 2011

Business Processes
Session 2

Learning outcome
Student will able to describe the model of business process

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Learning objectives
After studying this chapter, student will able to : Describe alternative organizational structures and their strengths, weaknesses, and implications for organizational operations. Define and give examples of a business process. Discuss the benefits of organizations adopting a business process perspective.

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ORGANIZATIONAL DESIGN Organizational design (also called organisational structure or hierarchy) The organization of a business enterprise through the structure of the relationships, interactions and reporting responsibilities among staff. Functional perspective A view of organizational design that emphasises hierarchical reporting roles, narrowly specified worker roles and an emphasis on departments.

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ORGANIZATIONAL DESIGN Business function A specific subset of the organization that is designed to perform a particular task that contributes to the organization achieving its objectives.

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WHAT IS A BUSINESS PROCESS?

Business process Any set of interlocking activities that work together, across the organization, to achieve some predetermined organizational goal, which is typically defined around satisfying customer needs.

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WHAT IS A BUSINESS PROCESS? TABLE 2.1 Functional versus process perspective

Functional perspective Process perspective

Focus

What is done e.g. How is it done accounting, sales, logistics

Horizontal, across the organization

Orientation Vertical, hierarchical

Objective
Personnel

Task driven
Specialists perform highly defined tasks

Customer driven
Generalists perform tasks across the process

Sources: Base on Sandoe, Corbitt & Boykin 2001.32

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WHAT IS A BUSINESS PROCESS?

Business process within the organization Business processes are the key to any organization.

Businesses do not operate without a process that can be followed, with examples including processes to order raw materials within a manufacturing firm, manufacture products, sell products to customers, handle customer enquiries and hire new employees.
Each of these broad processes will be an integral part of an organization, because, for example, without the manufacturing process the organization has no goods to sell and without the purchasing process, the organization has no raw materials to convert into finished goods.
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WHAT IS A BUSINESS PROCESS? Examples Sales

Aim: To sell goods to the customer and collect cash from sales.
Participants: Sales staff, customer, billing staff, warehouse.

Inputs: Sales order.

Outputs: Invoice, receipt, shipping document.

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WHAT IS A BUSINESS PROCESS? Purchasing

Aim: To acquire goods from suppliers and manage stock in order to sell to customers and avoid stock-outs.
Participants: Warehouse staff, purchasing staff, sales staff, vendor.

Inputs: Purchase requisition, back-order.

Outputs: Purchase order.

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WHY BUSINESS PROCESS?

What are the benefits of organizations adopting a business process perspective? Resource benefits flow from having a process emphasis. These emerge due to the more highly coordinated and integrated approach that the process perspective offers an organization, reducing wasted time due to rework, bureaucracy and administration. The business process perspective can yield benefits through improved customer service and customer relations, a value-adding emphasis and, potentially, a competitive advantage. Because processes are usually based around the product and therefore the customer, customer satisfaction, attention and service are potentially higher in a process-focused organization.

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Continued to session 3

Thank you

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