• Manage by Department or Cost Center (e.g. accounting, human resources, purchasing)
• Quality as overriding philosophy as used by Malcolm Baldrige Award winners
• Managing by Cross Functional Business Processes both within and extending beyond your organization

• Manage by Department or Cost Center (This is the traditional way of managing organizations. Although managing by department seems logical, it does not easily take into consideration how other parties of the organization can negatively impact a specific cost center or department. For example, a poorly worded marketing piece may generate more calls to customer service driving up customer service costs. Although the higher cost occurred in customer service, the root cause of this higher cost was from marketing. Eventually organizations can figure this out, but it is often not easy. It often results in laying the blame on the wrong department and not solving the problem quickly.
   
• Quality as overriding philosophy as used by Malcolm Baldrige Award winners. This approach works for some organizations. Very few would deny that increasing the quality of every process is a worthwhile goal. Malcolm Baldrige and other winners of quality awards have been very successful in managing by this approach. However, this approach
  • takes a great deal of discipline
  • often does not address cost issues very well
  • may look at processes only within a department rather than across departments
  However, overall this is a great way to manage an organization.
  
  
• Cross Functional Business Process Management both within and extending beyond your organization. Many different techniques suggest managing by processes:
• Tom Peters says its a 'XFn' [cross functional] world
• Core Competencies techniques identifies your core processes for your success and then has you consider outsourcing all non-core processes while focusing your greatest effectiveness and efficiency efforts on your core processes
• Quality techniques like Total Quality Management or six sigma focus on processes
• Lean Management talks about value streams which are really processes
• Reengineering is starting over to redesign your cross functional processes
• Bossidy in his book on Execution discusses 3 major processes: Human Resources, Operations, Planning
• Activity Based Management
talks about defining processes both within and outside your department as well as outside your organization with customer and vendors
• Business Process Management
talks about defining processes both within and outside your department as well as outside your organization with customer and vendors
• Michael Porter the famous Harvard Professor on strategic planning talks about maintaining your competitive advantage by connecting a series of interrelated processes
• Balanced Scorecard relates your key performance indicators and b> process improvement to your 4 Balanced Scorecard perspectives and to your b> strategic planning

For more information on the 'Why manage by processes?", click following link which will take you to our videos page showing a series of Business Process Management videos on YouTube. .

Now that we have the "Why business process management?". we need to understand the basic Business Process Management framework.

1. Define 8-12 high level MACRO business processes
• Sales and Marketing
,
• Provide Financial Information
• Manufacture Product or Create Service
• Provide Trained Employees
• .
• .
• .
• .
   
2. Define Sub-Processes that support Macro Processes
  (e.g. sales and marketing)
• Research Market
• Create Marketing Campaign
• Create and Monitor Sales Compensation
• Make Sales Calls
• Prepare Proposals
• Complete sales call paperwork
• .Buy Advertisement
   
3. Define MICRO-Processes that support Sub- Processes
  (e.g. make sales calls)
• Makes sales appointments
• Travel to customer
• Makes sales presentation to current customer
• Makes sales presentation to potential customer
   
4. Assign Process Managers and Executives
   • Assign senior Executive for Major Processes for funding and overall responsibility
   • Assign Process Manager for daily responsibility of process
     .
5. Develop Cross Function Business Process Reports
   • Determine frequency of reports
   • Determine if reports replace department reports or if they are additional reports
   • Determine software and applications for report
   • Determine detail of reports for different levels of management
      
6. Create Capital and Operational Budgets by Cross Functional Business Processes
   • Relate cross functional business process budgets to strategy
   • Relate capital budgets to strategy and cross functional business processes

 Call John Antos, Jim Brimson or Pat Dowdle at 972-980-7407

Phone: 972.980.7407 email: aidu@valuecreationgroup.com
Value Creation Group, Inc.
7820 Scotia Dr. #2000
Dallas, TX 75248