Introduction to Business Process Management

Anastasiya Henk
Researcher
The usual view of oranizations…
Management

Development Production Finance Marketing Sales and

support
The usual view of organizations…
Management

Development Production Finance Marketing Sales and

support

Missing:
• Customers (who we do it for)
• Products and services (what we do)
• Work flow through the organization (how we do it)
 Enterprise
Stakeholder

Supplier
Dangers of a vertical view
• Fragmentation!

• If department managers do not cooperate, they become competitors

• sales vs. production
• development vs. marketing
• ”Silos” develop
• Managers are rewarded on short time optimized results.
• Leader of ”The best department” is good for the career
• Local optimizations are often bad for the overall optimization of the organization.
• Leads to sub optimization of the organization as a whole
It may work in a sellers market..

• As was the situation for many companies several years ago..

• A company could introduce products at its own pace

• and meet only its own internal quality goals
• and set prices that guaranteed adequate margins

• Today's reality requires most organizations to compete in a buyer's market

But not today
• Today, things have changed, and changes come more often:
• capital: fluctuations, increasing?
• natural resources
• new regulations, e.g. based on climate…
• Marketplace has changed completely, has become destabilized
• new forms of competition
• globalization
• deregulation
• Everything is services
• Customers demands are higher. They can shop globally based on price, quality, design, what's
cool, etc..
Need something different
• It seems that we may need a different way to look at, and think about and manage organizations.

• Can we develop a picture that shows these things?

• Organization charts are less of a problem in small organizations.

• People know each other and knows other functions. But still..
A horizontal view of organizations
• If we take horizontal view, then we should see those issues that the vertical view did not show.
• Including the three ingredients missing from the organization chart:
• customer
• product
• flow of work
• Enable us to see how work actually gets done, which is through processes that cut across
functional boundaries
• Show the internal customer-supplier relationships through which products and services are
produced.
 A horizontal view - with processes

Stakeholders Government
Banks Regulators

Organization

Management

Engineering Production IT Finance HR Marketing Sales and

support
< Product process>
New need identified
Design new products
Promotions
Customers
Produce products Order and payment

Deliver products Product/

Service

Suppliers Employees
IT
Business processes
• Business processes are end-to-end activities with predefined input aimed
at production predetermined output that should deliver value to
customers (external or internal).
• Business processes are maintained – i.e., developed, enacted, motivated,
monitored, controlled, adjusted, and coordinated – by means of business
process management (BPM) (Tønnessen, 2014; Gong and Janssen, 2012;
Trkman, 2010; Margherita, 2014; Raynus, 2011)
• The business process (BP) perspective provides both a strategic view and a
detailed view over the operations that go beyond the intra-departmental
and intra-organisational borders (Raschke, 2010; Benner and Tushman;
2003)
 Three levels to understand organizational performance
Based on Harmon, Rummler, and others
• organization level (or enterprise level)
• process level
• job/performer level
Organization

Management

Engineering Production IT Finance HR Marketing Sales and

support
< Product process>
New need identified
Design new products
Promotions
Customers
Produce products Order and payment

Deliver products Product/

Service

Suppliers Employees
IT
Three levels to understand organizational performance

• May show different perspectives – consistently

• Holistic approach
Advantages of Process Management
• Creation of high-performance processes and general improvement of organizational
performance;
• Driving out of nonvalue-adding overhead;
• Processes deliver on their promise and operate consistently at the level of which they are
capable;
• An enterprise can determine when a process no longer meets its needs, when the needs of the
customers have changed;
• Lowering of operational costs and improvement of customer satisfaction;
• Increased responsiveness to periods of rapid change.
Do managers understand?
• Rummler & Brache:
• Many managers do not understand their businesses.
• This means that while many managers understand their product and services, customers and
competition, they do not understand, at a sufficient level of detail, how their business get
products developed, made, sold, and distributed.

• R&B: the primary reason for this lack of understanding is that most managers
(and others) have a fundamental flawed view of their organizations.
Motivation for the course

All organizations increasingly rely on an ever more complex

technological infrastructure and an increasing set of ICT-based services
for “everything” they do – or plan to do – externally and internally.
Digital transformation (DT)
• DT is considered as #1 risk by directors, CEOs, and senior executives.

• 70% of of DT initiatives fail.

• Example: $1.3 trillion spent for DT ended up with $900 billion went to
waste

• Digital technologies do not solve organizational problems, they provide

possibilities for efficiency gains and customer intimacy.
Tabrizi et al (2019)
Management and IT
Digitalization challenges managers on three levels:

• Macro level – business models and positioning of the firms in their

ecosystems;

• Meso level – transformation of work processes, organizational structures,

reporting systems;

• Micro level – nature and structure of work, capabilities, competences,

skills, etc.
Bygstad et al (2019)
Is DT about technology?

• Will IT department and appointed CIO manage to successfully

implement an information technology?

• «The strength of digital technologies does not lie in the technologies

individually. Instead, it stems from how managers integrate them to
transform their business and how they work» (Bygstad et al 2019:2).
From traditional management to digital
management
Traditional management: money and people

Digital management: money, people… and digital resources

Digital resources:
• Global – challenge the previous time and space concerns;
• General – data can be used for many purposes;
• Generative – more innovation through recombination;
• Generous – received data can be reused for no cost – scarce goods?
Economies of scale?
Bygstad et al. (2019)
DT implications for managers

Bygstad et al (2019)
Shift from traditional IT practices to new digital
practices
• From strategy to continious development – using existing IT infrastructure for new services and products

• From optimization to reconceptualization – processes should be rethought or abandoned

• From customer/vendor relationship to cross-disciplinary partnership – cooperation between customers and

vendors

• From IT silos to platform ecosystems – from tailor made solutions to public platforms

• From PPT to dashboards – real time data

• From internal benefits realization to position in ecosystems – interplay with other organizations
Bygstad et al (2019)
Introductory case
New technologies changing the food
business: McDonald’s case (from
Ackam (2020), Journal of Information
Technology Teaching Cases)
• Which implications did
implementation of kiosks had to
management on macro, meso and
micro levels?
• Illustrate and compare the processes
of Cashier and Kiosk order processes
• Do not be afraid to make assumptions
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