business process concept

(konsep proses bisnis)

Kristanto Santosa
ks@pqm-iris.co.id
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 presentasi pada:
Seminar & Workshop Proses Bisnis
"Meningkatkan Daya Saing Global"
7-8 Desember 2005
Aula Utama UNISBA
Bandung, 7 Desember 2005

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 Function & Process
Philosophy
Physical vs. Metaphysical
Static vs. Dynamic
Constant vs. Change
The Theory of Creation vs. The Theory of Evolution
Unchanging and Absolute God vs. Sensitive and Caring God

Functions vs. Processes

Jobs vs Roles

Concepts such as creativity, freedom, novelty,

emergence, and growth are fundamental explanatory
categories for process philosophy

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We still live in Functional & DOW Era

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 The Division of Work
Principles

“Modern” organizations have been organized according

to the idea of specialization of labor of Adam Smith.
This idea argues that works have to be fragmented into
simple tasks which are normally performed by one
person.

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 The Principles of Scientific
Management, 1911

If you and your workman have become so skillful that you and
he together are making two pairs of shoes in a day, while your
competitor and his workman are making only one pair, it is clear
that after selling your two pairs of shoes you can pay your
workman much higher wages than your competitor who
produces only one pair of shoes is able to pay his man, and that
there will still be enough money left over for you to have a larger
profit than your competitor.

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 The Principles of Scientific
Management, 1911

The principal object of management should be to secure the

maximum prosperity for the employer, coupled with the maximum
prosperity for each employee.

In the same way maximum prosperity for each employ, means not
only higher wages than are usually received by men of his class,
but, of more importance still, it also means the development of
each man to his state of maximum efficiency, so that he may be
able to do; generally speaking, the highest grade of work for
which his natural abilities fit him, and it further means giving him,
when possible, this class of work to do.

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 Henry Fayol (1841 - ….) : “Applying the Division
of Work into Managerial Functions and Levels
of Management”

Although Fayol and Taylor were working on the same problem,

Taylor of the factory upwards, Fayol of the meeting of directions
downwards. The approach of Taylor dealt with I specify it of
analysis of positions, movements of the workers and standards of
times; Fayol however saw the administration like a teachable
theory that it dealed with planning, organization, direction,
coordination and control.

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Whereas the Scientific Management approach of Taylor, were the
administration at factory level, the attention of Fayol is directed
to the activities of all the administrators.

It described the practice of the administration like something

different from the accounting, the finances, the production,
distribution and to other typical commercial functions.

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 Adam Smith was right !! *

* to include his disciples, a.o. Taylor, Fayol, Weber, Ford, and Sloans

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We are “Entering” the Era of Process

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 The Emerging New Paradigm of Business
From : To :
Suppliers Power Customer Power
Demand > Supply Supply >> Demand
Massification Demassification
Control Empowerment
One Best Way Best Practices & Kaizen
Industrial Society Information Society
Bureaucracy & Orderliness Speed & Change
Corporations Dynamic Network
Labor Power Brain Power

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 Change -> Process Orientation
Between increasing customer expectations and increasing intensity in the competition,
only those companies will be successful in the long term that are able to react
dynamically to changes and that are structured on the basis of process orientation.
competition
Intensity of

dynamic,
high process-oriented
companies

Change

Static,
low Functional-oriented
companies

Customer
low high demands

The orientation of the company towards business processes becomes the key factor
for the continuous improvement in the areas cost, quality and innovation cycles!

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 WHAT IS A PROCESS (in BUSINESS) ?

– A process is any activity or series of activities that

takes an input, add value to it, and provides
output to a customer
– A sequence of activities the obtain results"
(Wildemann)
– A set of interlinked means and activities, that
convert input into results"
(ISO 8402)

The two major types of processes are:

• production processes
• business processes

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 WHAT IS A BUSINESS PROCESS ?

A business process is a series of logical, related

activities that utilize resources to provide specific
results required to achieve a basic business
objective.

It is all the activities in which we do not touch the

product that is sold to the customer.

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 Functionally structured Organizations

Characteristics are:

• “Fragmented”
• Aimed at vertical and functional matters
• Many control activities
• Emphasizes high/low relationships
• Encourages relation dependence
• Information is “secret”

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 Functionally structured Organizations
Disadvantages are:

• Walls; no further than here …..

• Customer ? : “We (Production, R&D, etc.) know what’s
good for you”
• Steering people instead of steering activities
• Communication? : “We have to …… ; we are afterall one
company”
• Political decision making (“the political arenas”)
• Who is “New Product Development” ? Who is responsible
for it?

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 Process based Organization

Characteristics:

• Entire tasks
• Aimed at horizontal processes towards client
• Control, as this adds value .. (otherwise .. NO)
• Emphasizes interdependence and uniting leadership
• Emphasizes interdependence of independent persons
• “Security” is sought in individually added value
• Information is accessible

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 Processed based organization

Advantages are:

• No boundaries, but interconnections

• Customer focused: what is the added value?
• Steering activities instead of steering people
• Communication because it is useful (fulfilling the needs of
customer)
• Decision making is matching & customising
• Functional service provision is a process

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How Does Functional Organization Differ
from Process Based Organization ?

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 A Functional View of an Organization

Senior
Management

Sales and
Engineering Manufacturing Distribution
marketing

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 A Process View of an Organization

Suppliers
Suppliers Manufacturing Distribution Customers
Manufacturing Distribution Customers

Sales
Salesand
and
Engineering
Engineering marketing
marketing

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from Functions to Processes

From To
Functional
Business
Process

P A M D Product Development
U C A I
R C N S and Introduction
C O U T Customer Order
H U F R
A N A I
acceptance and Fulfillment
S T C B
I I T U
Operations and Logistics
N N U T
G G R I
Field Service and
I O Customer Support
N N Administrative Support
G

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“Superimposed” View of Functional &
Process based Organization

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Thank You

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