A P Q C I N T E R N A T I O N A L B E N C H M A R K I N G C L E A R I N G H O U S E

Process Classification
Framework
Developed By
APQC’s International Benchmarking Clearinghouse
In Partnership With
Arthur Andersen & Co., SC
 O P E R AT I N G P R O C E S S E S
Process Classification Framework: Overview
5.
Produce &
Deliver for
Manufacturing
1. 2. 3. 4. Organization 7.
Understand Develop Design Market Invoice &
Markets & Vision & Products & & Service
Customers Strategy Services Sell 6. Customers
Produce &
Deliver for
Service
Organization
MANAGEMENT & SUPPORT PROCESSES

8. Develop and Manage Human Resources

9. Manage Information

10. Manage Financial and Physical Resources

11. Execute Environmental Management Program

12. Manage External Relationships

13. Manage Improvement and Change

About the Framework

The Process Classification Framework has been developed organizations to see their activities from a cross-industry
over the past three years by the APQC International process viewpoint instead of a narrow functional viewpoint.
Benchmarking Clearinghouse, with the assistance of several Many organizations now have used the Process
major international corporations, and in close partnership Classification Framework in practical ways to better
with Arthur Andersen & Co. understand their processes, to reach out across industry
The intent has been to create a high-level, generic boundaries to communicate and share information, and to
enterprise model that will encourage businesses and other classify information in various forms.
 Process Classification Framework
PURPOSE A small team, representing both industry and APQC, held the
The Process Classification Framework serves as a high-level, initial design meetings in early 1992. APQC published the
generic enterprise model that encourages businesses and other first version of the Framework later that year.
organizations to see their activities from a cross-industry process
viewpoint instead of from a narrow functional viewpoint. C O L L A B O R AT I O N
APQC and Arthur Andersen & Co. have collaborated closely to
All too often, organizations become bogged down by the fear of bring the Process Classification Framework to life and enhance
making mistakes in “apples to oranges” benchmark compar- it over the past three years. The Center would like to acknowl-
isons. Convinced that they have unique characteristics and edge the staff of Arthur Andersen for their research and numer-
constraints, they have difficulty understanding how to com- ous insights during this effort.
pare their processes meaningfully to those of other, different
organizations. Many other Clearinghouse member companies from diverse
industries have also contributed to the ongoing development of
However, experience shows that the potential of benchmarking the Framework.
to drive dramatic improvement often lies squarely in making
“out of the box” comparisons and a search for insights not L O O K I N G F O R WA R D
found within typical intra-industry paradigms. Continuing dialogue with Clearinghouse members has shown
that the Processes Classification Framework can be a useful
How can organizations communicate effectively across indus- tool in understanding and mapping business processes. In par-
try boundaries and overcome the vocabularies that obscure the ticular, a number of organizations have used the Framework
underlying commonality of their business processes? to classify both internal and external information for the purpose
of cross-functional and cross-divisional communication.
The Process Classification Framework supplies a generic view of
business processes often found in multiple industries and The Process Classification Framework is an evolving docu-
sectors—manufacturing and service, healthcare, government, ment. The Center will continue to enhance and improve it on
education, and others. a regular basis. To that end, we welcome your comments, sug-
gestions for improvement, and any insights you gain from
Additionally, many organizations now seek to understand their applying it within your organization.
inner workings from a horizontal process viewpoint, rather
than from a vertical functional viewpoint. How can they, for Additionally, other process models exist in various forms; these
example, differentiate the sales process from the existing sales models might enhance the effectiveness of the Framework. We
department? would like to learn from anyone with such information to
share.
The Process Classification Framework seeks to represent major
processes and subprocesses, not functions, through its struc- RIGHTS AND PERMISSIONS
ture and vocabulary. The Framework does not list all processes © Copyright by the American Productivity & Quality Center.
within any specific organization. Likewise, not every process All rights reserved.
listed in the Framework is present in every organization.
APQC would like to see the Process Classification Framework
HISTORY receive wide distribution, discussion, and use. Therefore, it
The Process Classification Framework was originally envisioned grants permission for copying the Framework, as long as
as a “taxonomy” of business processes during the 1991 design of acknowledgement is made to the American Productivity &
the American Productivity & Quality Center’s International Quality Center. Please notify and inform APQC concerning
Benchmarking Clearinghouse. your use or application.

That design process involved more than 80 organizations with

a strong interest in advancing the use of benchmarking in the Please direct your comments, suggestions, and questions to:
U.S. and around the world. A primary issue was, and continues APQC International Benchmarking Clearinghouse
to be, how to nurture and enable process benchmarking across Information Services Dept.
industry boundaries. 123 North Post Oak Lane, 3rd Floor
Houston, Texas 77024-7797
The founding members of the Clearinghouse were convinced 713-681-4020 (phone)
that a common vocabulary, not tied to any specific industry, 713-681-8578 (fax)
was necessary to classify information by process and to help Internet: apqcinfo@apqc.org
companies transcend the limitations of “insider” terminology. For updates, visit our Web site at http://www.apqc.org
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O P E R A T I N G P R O C E S S E S
3.3.2 Eliminate quality/reliability problems
1. UNDERSTAND MARKETS AND CUSTOMERS
3.3.3 Eliminate outdated products/services
1.1 Determine customer needs and wants
3.4 Test effectiveness of new or revised products or services
1.1.1 Conduct qualitative assessments
3.5 Prepare for production
1.1.1.1 Conduct customer interviews
3.5.1 Develop and test prototype production process
1.1.1.2 Conduct focus groups
3.5.2 Design and obtain necessary materials and equipment
1.1.2 Conduct quantitative assessments
3.5.3 Install and verify process or methodology
1.1.2.1 Develop and implement surveys
3.6 Manage the product/service development process
1.1.3 Predict customer purchasing behavior
1.2 Measure customer satisfaction
1.2.1 Monitor satisfaction with products and services
4. MARKET AND SELL
1.2.2 Monitor satisfaction with complaint resolution
4.1 Market products or services to relevant customer segments
1.2.3 Monitor satisfaction with communication
4.1.1 Develop pricing strategy
1.3 Monitor changes in market or customer expectations
4.1.2 Develop advertising strategy
1.3.1 Determine weaknesses of product/service offerings
4.1.3 Develop marketing messages to communicate benefits
1.3.2 Identify new innovations that meet customer needs
4.1.4 Estimate advertising resource and capital requirements
1.3.3 Determine customer reactions to competitive offerings
4.1.5 Identify specific target customers and their needs
4.1.6 Develop sales forecast
4.1.7 Sell products and services
2. DEVELOP VISION AND STRATEGY 4.1.8 Negotiate terms
2.1 Monitor the external environment 4.2 Process customer orders
2.1.1 Analyze and understand competition 4.2.1 Accept orders from customers
2.1.2 Identify economic trends 4.2.2 Enter orders into production and delivery process
2.1.3 Identify political and regulatory issues
2.1.4 Assess new technology innovations
2.1.5 Understand demographics 5. PRODUCE AND DELIVER FOR MANUFACTURING-
2.1.6 Identify social and cultural changes ORIENTED ORGANIZATIONS
2.1.7 Understand ecological concerns 5.1 Plan for and acquire necessary resources
2.2 Define the business concept and organizational strategy 5.1.1 Select and certify suppliers
2.2.1 Select relevant markets 5.1.2 Purchase capital goods
2.2.2 Develop long-term vision 5.1.3 Purchase materials and supplies
2.2.3 Formulate business unit strategy 5.1.4 Acquire appropriate technology
2.2.4 Develop overall mission statement 5.2 Convert resources or inputs into products
2.3 Design the organizational structure and relationships between 5.2.1 Develop and adjust production delivery process
organizational units (for existing process)
2.4 Develop and set organizational goals 5.2.2 Schedule production
5.2.3 Move materials and resources
5.2.4 Make product
3. DESIGN PRODUCTS AND SERVICES 5.2.5 Package product
3.1 Develop new product/service concept and plans 5.2.6 Warehouse or store product
3.1.1 Translate customer wants and needs into product and/or 5.2.7 Stage products for delivery
service requirements 5.3 Deliver products
3.1.2 Plan and deploy quality targets 5.3.1 Arrange product shipment
3.1.3 Plan and deploy cost targets 5.3.2 Deliver products to customers
3.1.4 Develop product life cycle and development timing targets 5.3.3 Install product
3.1.5 Develop and integrate leading technology into prod- 5.3.4 Confirm specific service requirements for individual
uct/service concept customers
3.2 Design, build, and evaluate prototype products and services 5.3.5 Identify and schedule resources to meet service
3.2.1 Develop product/service specifications requirements
3.2.2 Conduct concurrent engineering 5.3.6 Provide the service to specific customers
3.2.3 Implement value engineering 5.4 Manage production and delivery process
3.2.4 Document design specifications 5.4.1 Document and monitor order status
3.2.5 Develop prototypes 5.4.2 Manage inventories
3.2.6 Apply for patents 5.4.3 Ensure product quality
3.3 Refine existing products/services 5.4.4 Schedule and perform maintenance
3.3.1 Develop product/service enhancements 5.4.5 Monitor environmental constraints
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6. PRODUCE AND DELIVER FOR SERVICE-ORIENTED 7. INVOICE AND SERVICE CUSTOMERS

ORGANIZATIONS 7.1 Bill the customer
6.1 Plan for and acquire necessary resources 7.1.1 Develop, deliver, and maintain customer billing
6.1.1 Select and certify suppliers 7.1.2 Invoice the customer
6.1.2 Purchase materials and supplies 7.1.3 Respond to billing inquiries
6.1.3 Acquire appropriate technology 7.2 Provide after-sales service
6.2 Develop human resource skills 7.2.1 Provide post-sales service
6.2.1 Define skill requirements 7.2.2 Handle warranties and claims
6.2.2 Identify and implement training 7.3 Respond to customer inquiries
6.2.3 Monitor and manage skill development 7.3.1 Respond to information requests
6.3 Deliver service to the customer 7.3.2 Manage customer complaints
6.3.1 Confirm specific service requirements for individual
customer
6.3.2 Identify and schedule resources to meet service
requirements
6.3.3 Provide the service to specific customers
6.4 Ensure quality of service

M A N A G E M E N T & S U P P O R T P R O C E S S E S
8.6 Ensure employee well-being and satisfaction
8. DEVELOP AND MANAGE HUMAN RESOURCES
8.6.1 Manage employee satisfaction
8.1 Create and manage human resource strategies
8.6.2 Develop work and family support systems
8.1.1 Identify organizational strategic demands
8.6.3 Manage and administer employee benefits
8.1.2 Determine human resource costs
8.6.4 Manage workplace health and safety
8.1.3 Define human resource requirements
8.6.5 Manage internal communications
8.1.4 Define human resource’s organizational role
8.6.6 Manage and support workforce diversity
8.2 Cascade strategy to work level
8.7 Ensure employee involvement
8.2.1 Analyze, design, or redesign work
8.8 Manage labor-management relationships
8.2.2 Define and align work outputs and metrics
8.8.1 Manage collective bargaining process
8.2.3 Define work competencies
8.8.2 Manage labor-management partnerships
8.3 Manage deployment of personnel 8.9 Develop Human Resource Information Systems (HRIS)
8.3.1 Plan and forecast workforce requirements
8.3.2 Develop succession and career plans
8.3.3 Recruit, select and hire employees 9. MANAGE INFORMATION RESOURCES
8.3.4 Create and deploy teams 9.1 Plan for information resource management
8.3.5 Relocate employees 9.1.1 Derive requirements from business strategies
8.3.6 Restructure and rightsize workforce 9.1.2 Define enterprise system architectures
8.3.7 Manage employee retirement 9.1.3 Plan and forecast information technologies/methodologies
8.3.8 Provide outplacement support 9.1.4 Establish enterprise data standards
8.4 Develop and train employees 9.1.5 Establish quality standards and controls
8.4.1 Align employee and organization development needs 9.2 Develop and deploy enterprise support systems
8.4.2 Develop and manage training programs 9.2.1 Conduct specific needs assessments
8.4.3 Develop and manage employee orientation programs 9.2.2 Select information technologies
8.4.4 Develop functional/process competencies 9.2.3 Define data life cycles
8.4.5 Develop management/leadership competencies 9.2.4 Develop enterprise support systems
8.4.6 Develop team competencies 9.2.5 Test, evaluate, and deploy enterprise support systems
8.5 Manage employee performance, reward and recognition 9.3 Implement systems security and controls
8.5.1 Define performance measures 9.3.1 Establish systems security strategies and levels
8.5.2 Develop performance management approaches/feedback 9.3.2 Test, evaluate, and deploy systems security and controls
8.5.3 Manage team performance 9.4 Manage information storage & retrieval
8.5.4 Evaluate work for market value and internal equity 9.4.1 Establish information repositories (data bases)
8.5.5 Develop and manage base and variable compensation 9.4.2 Acquire & collect information
8.5.6 Manage reward and recognition programs 9.4.3 Store information
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9.4.4 Modify and update information

11. EXECUTE ENVIRONMENTAL MANAGEMENT
9.4.5 Enable retrieval of information
PROGRAM
9.4.6 Delete information
11.1 Formulate environmental management strategy
9.5 Manage facilities and network operations
11.2 Ensure compliance with regulations
9.5.1 Manage centralized facilities
11.3 Train and educate employees
9.5.2 Manage distributed facilities
11.4 Implement pollution prevention program
9.5.3 Manage network operations
11.5 Manage remediation efforts
9.6 Manage information services
11.6 Implement emergency response programs
9.6.1 Manage libraries and information centers
11.7 Manage government agency and public relations
9.6.2 Manage business records and documents
11.8 Manage acquisition/divestiture environmental issues
9.7 Facilitate information sharing and communication
11.9 Develop and manage environmental information system
9.7.1 Manage external communications systems
11.10 Monitor environmental management program
9.7.2 Manage internal communications systems
9.7.3 Prepare and distribute publications
9.8 Evaluate and audit information quality
12. MANAGE EXTERNAL RELATIONSHIPS
12.1 Communicate with shareholders
12.2 Manage government relationships
10. MANAGE FINANCIAL AND PHYSICAL RESOURCES
12.3 Build lender relationships
10.1 Manage financial resources
12.4 Develop public relations program
10.1.1 Develop budgets
12.5 Interface with board of directors
10.1.2 Manage resource allocation
12.6 Develop community relations
10.1.3 Design capital structure
12.7 Manage legal and ethical issues
10.1.4 Manage cash flow
10.1.5 Manage financial risk
10.2 Process finance and accounting transactions
13. MANAGE IMPROVEMENT AND CHANGE
10.2.1 Process accounts payable
13.1 Measure organizational performance
10.2.2 Process payroll
13.1.1 Create measurement systems
10.2.3 Process accounts receivable, credit, and collections
13.1.2 Measure product and service quality
10.2.4 Close the books
13.1.3 Measure cost of quality
10.2.5 Process benefits and retiree information
13.1.4 Measure costs
10.2.6 Manage travel and entertainment expenses
13.1.5 Measure cycle time
10.3 Report information
13.1.6 Measure productivity
10.3.1 Provide external financial information
13.2 Conduct quality assessments
10.3.2 Provide internal financial information
13.2.1 Conduct quality assessments based on external criteria
10.4 Conduct internal audits
13.2.2 Conduct quality assessments based on internal criteria
10.5 Manage the tax function
13.3 Benchmark performance
10.5.1 Ensure tax compliance
13.3.1 Develop benchmarking capabilities
10.5.2 Plan tax strategy
13.3.2 Conduct process benchmarking
10.5.3 Employ effective technology
13.3.3 Conduct competitive benchmarking
10.5.4 Manage tax controversies
13.4 Improve processes and systems
10.5.5 Communicate tax issues to management
13.4.1 Create commitment for improvement
10.5.6 Manage tax administration
13.4.2 Implement continuous process improvement
10.6 Manage physical resources
13.4.3 Reengineer business processes and systems
10.6.1 Manage capital planning
13.4.4 Manage transition to change
10.6.2 Acquire and redeploy fixed assets
13.5 Implement TQM
10.6.3 Manage facilities
13.5.1 Create commitment for TQM
10.6.4 Manage physical risk
13.5.2 Design and implement TQM systems
13.5.3 Manage TQM life cycle