Organizational and Process Management Structures

1. Organizational and Process Management Structures The Impact of Organizational Structure on Process Performance, and the Role of Process Managers in the New Organization Much of the material in this presentation was drawn from the following sources: • Harmon, Paul, “Managing the Process-Centric Organization”, presentation • Harmon, Paul, Business Process Change, Second Edition (2007), by Business Process Trends

2. Types of Management • Operational Management (Running the company) • Responsible for the ongoing work of the organization • In most companies, this is the majority of the work Question: when is this not true? • Project Management (Changing things) • Responsible for specific projects that have a start and end • Example: developing a new laptop (engineering) • Example: implementing Vista across the company (IT) • As mentioned previously in this class, something that starts as a project is often integrated into the operations of the organization: • The new laptop now becomes part of the regular product line • Vista is now supported by the Help Desk BA 553: Business Process Management

3. Approaches to Operational Management • There are two main approaches to Operational Management: • Functional Management • Process Management • This course is focused on process management BA 553: Business Process Management

4. Enterprise BPM Methodology “Managing the Process-Centric Organization”, presentation by Paul Harmon. Sessions 8 & 9 Session 5 Session 4 Sess. 3 Session 8 BA 563: Process Improvement BA 553: Business Process Management

5. What is the Most Difficult Part of BPM? • Process management is the hardest piece. It will take the longest to change because change is resisted so strongly • The organization of a company’s managers is an executive decision that depends on the philosophy of the organization’s executives • The key to process management is the managers’ bonus and incentive system, which in turn, depends on the KPIs senior managers care about • If the company is organized as a functional organization, there can still be process managers, but the focus will be very different • In order to achieve process management, the organization needs to be structured around its processes, to some degree BA 553: Business Process Management

6. What is a Process-Centric Organization? • One in which senior executives rely heavily on process concepts and techniques to manage the organization • One in which senior executives rely heavily on process performance measures • The key is the interest and commitment on the part of corporate executives to the use of process concepts • It’s an evolving concept: some organizations are completely organized around their business processes but most Process-Centric organizations have a mix of functional and process structures BA 553: Business Process Management

7. Organizational Structure • As explained in session 4 related to functional management and project management, this does not have to be an “either-or” decision • Matrix management is an approach that enables a focus on function AND a focus on process • Who owns the resources? • Who owns the budget? • Is there a dedicated group of process managers? Project Management Institute’s classification of the 5 organizational types BA 553: Business Process Management

8. Focus of Functional vs. Process Management BA 553: Business Process Management

9. Coordinating the Management of Processes BA 553: Business Process Management

10. Trends in Process Management • Outsourced processes • Example: Dell (text, pg. 122) • Process standardization BA 553: Business Process Management