Business Processes

Sangeeta Shah Bharadwaj

Case : MEDCARE
Why do you think the same patient may have three

different experiences at three different time?

Experience 1: silo functioning and objectives of

departments more important, every department has to

generate revenue for them selves, no process design for
such patients
Experience 2: Processes (Services) are designed keeping in
mind the customers ( Is this core process for the hospital?)
Experience 3: A Critical process, designed keeping in mind
service need

Case : Soft Service Inc

Who is correct?

What is the reason for this type of

scenario?

What is the reason?

Organization structure is functional, hence

important to functional goals

Is it customer focused?
Is it responsive to environment?

What is a Functional Approach?

Organization structure
CHARACTERISTICS
consolidates human knowledge and skills with

respect to specific activities in order to provide

depth of expertise
Functional
Grouping
Engineering
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CEO
Marketing

Manufacturing

Strengths and Weaknesses of

Functional Organization Structure?
STRENGTHS
Allows economies of scale within
departments
Enables in-depth knowledge and skill
development
Better accomplishment of functional
goals
WEAKNESSES
better departmental performance but
may be sub optimal organization

Can you suggest another

Org structure?
??
Matrix

Matrix Structure
Dual-Authority Structure in a Matrix Organization
President

Director
of Product
Operations
Product
Manager A

Product
Manager B

Product
Manager C

Product
Manager D
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Design
Vice
President

Mfg
Vice
President

Marketing
Vice
President

Controller

Procurement
Manager

Strengths and Weaknesses of

Matrix Organization Structure?
STRENGTHS
Product/ Service/project centric and
hence customer centric but does it align
with organization strategy?
Flexible sharing of human resources
More responsive to changes in the
environment
WEAKNESSES
dual authority, which can be frustrating
and confusing
Mangers require better interpersonal

Can you suggest another

Org structure?
??
Process related?

Horizontal Structure
Top
Management
Team

Process
Owner
Market
Analysis

Team
1

Team
2

Research

Product
Planning

Team
3
Testing

Customer

New Product Development Process

Process
Owner
Analysis
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Team
1

Team
2

Purchasing

Material
Flow

Team
3
Distrib.

Procurement and Logistics Process

Customer

Horizontal Structure
The horizontal structure organizes

employees around core processes

by bringing together people who
work on a common process so they
can easily communicate and
coordinate their efforts.

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Horizontal Structure
STRENGTHS:
Complete focus on organization goal ,

alignment with organization strategy

and optimizing the same
focus on teamwork and collaboration
More responsive to environment.

13

Horizontal Structure
WEAKNESSES:
Process centricity is good but difficult
to implement

Requires

changes in culture, job

design, management philosophy, and
information and reward systems

14

Does Process Organization Structure exist?

??
Rather we talk about process centric /

driven organizations
Organizations are trying/ wanting to
be process centric

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Why is there a need?

??

Competitive environment demands customer

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centricity
Need is to be responsive to fast changing
environment
reduces the risk of sub optimization of
organization goals
Porter talking about the Business Value chain
Management Gurus talking about core processes
and support processes
Outsourcing of support processes
ERP implementations enhancing the process view

Case MEDCARERevisit
How will you design/ incorporate process

orientation in Hospitals
What are the challenges?
Multiple stake holders, departments
End-to end view required and very complex
Understanding of horizontal view of the

organization
Hence identification of the value chain is

needed

Process Orientation In Hospitals

One approach Clinical Pathways

Clinical pathways are standardized,

evidence-based multidisciplinary
management plans, which identify
an appropriate sequence of clinical
interventions, timeframes,
milestones and expected outcomes
for a homogenous patient group

Second approach is
A second manner to achieve process oriented

thinking is to consider the needs of the patient as

the basis of the creation of a new organizational
structure.
service line, which contains multiple services and

disciplines, will have to be optimally organized and

integrated with reference to the real needs of the
patient
In a process-based organization design, these

service-lines are organised in a separate division

which are profit centers and where pay for
performance is the rule

THE BUSINESS VALUE CHAIN of

the organization and what is the
relationship with processes

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9/9/15

A generic hierarchy of
processes
Value
chain
Business Process/
Also core process

Business Process

Business
Process / Core
process

Process

Process

Process

Sub
Process

Sub
Process

Sub
process

Activity

Activity

Value chain
The largest process we talk
about is the value chain
The value chain has one or more
core processes which embody
critical corporate expertise and
produce products and services
that are delivered to the
customer

Processes are
independent of formal

organizational structures
crossing functions or
departments
involving people with different
expertise and roles
Customer centric and Responsive
to changes in Environment.

Process Definition
A process is defined as a specific
ordering of work activities across
time and place with a beginning,
an end, and clearly identified
inputs and outputs: a structure
for action (Davenport, 1993).
A sub division of value chain

Business Process Definition

A Business process is coordinated
and standardized flow of
activities performed by people or
machinery , which can traverse
functional or departmental
boundaries to achieve business
objectives that create value for
internal or external customers .

The Challenge Remains?

However, formal organizational

structures can strongly influence

the process driven approach and
effectiveness of processes

Need for Business Process

Management Strategies
And need to implement process
driven organization along with

Case : Soft Service Inc

How will you apply process approach for an

organization having functional structure?

Approaches to achieve Process Driven

enterprises with the existing
organization structure

Fundamental shift in Control

Resistance to this approach as people do not give up

power if they still have the responsibility

Is it right to advocate Vice president Order to Cash or

procure to pay
Rather have senior group of empowered process

professionals to provide leadership and specific

direction
What would be scope and size of this new

organization entity ?
A process PMO , which is staffed by business

professionals whose full-time job is to drive the

Processes
organization toward process optimization
Few processes to start with
But requires Top management commitment

What if
organizations would have to
struggle to introduce a formal and
empowered Process PMO or full-fledged
Process Centric Departments or simply
they are not able to implement the same?

Approaches to achieve Process Driven

enterprises with the existing
organization structure

Have Process Steering

Committee consists of senior

executives from each of the
major business functions in the
organization
who meet on a periodic basis
to review proposed initiatives
and monitor ongoing activities
This is not a full-time job, but
rather an extension of existing
line responsibility

Issues with Process Steering Committees

Consensus driven which often can lead

to analysis-paralysis and lengthy delays

before adoption of specific proposals
Leaders busy with own professional
commitments
no operational entity chartered with
monitoring adherence to stated policy
May pass on task to IT Department
But to be understood that Process
driven approach is transformation and
not an enablement as done thru IT

Approaches to achieve Process Driven

enterprises with the existing
organization structure

identifying metrics that run the

gamut of end-to-end processes

Are not function oriented metrics
Aligning metrics across the value
chain can be an excellent way to
identify shortcomings in the
process
And then improve upon them

Applications of Structural Design

Structural Alignment
Finding the right balance between

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vertical control and horizontal

coordination is an important
design decision.
Vertical Control efficiency
and Stability
Horizontal Coordination
Learning
Innovation

Applications of Structural Design

Functional
Structure

Dominant
Structural Vertical:
Approach Control

Efficiency
Stability
Reliability

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Matrix
Structu
re

Horizont
al
Structur
e

Horizontal:

Coordinatio
n
Learning
Innovation
Flexibility