MODULE 4 -

ORGANIZATION Dr. Dr. Tam Nguyen

/BUSINESS AND
PROCESS
 CONTENTS
Organization structure
Value chain model and Supply chain operation references (SCOR)
Business process architecture (BPA)
Process Identification
 WHY DO WE
NEED TO STUDY
ABOUT
ORGANIZATION
STRUCTURE AND
ARCHITECTURE
IN THIS CLASS?
 TWO TYPE OF
ORGANIZATIONAL Centralize vs decentralize

STRUCTURE
ORGANIZATION STRUCTURE
– HIERARCHY
An organizational
structure is a system
that outlines how
certain activities are
directed in order to
achieve the goals of an
organization. These
activities can include
rules, roles, and
responsibilities. The
organizational structure
also determines how
information flows
between levels within Hierarchy structure
the company.
 MATRIX STRUCTURE
In a Matrix organizational
structure, the reporting
relationships are set up as a
grid, or matrix, rather than in the
traditional hierarchy. It is a type
of organizational management in
which people with similar skills
are pooled for work
assignments, resulting in more
than one manager to report to
 FLAT STRUCTURE
mostly adopted by small
companies and start-ups in
their early stage. It’s almost
impossible to use this
model for larger companies
with many projects and
employees
 NETWORK STRUCTURE
Network organizational
structure helps
visualize both internal
and external
relationships between
managers and top-
level management.
employees form small,
multidisciplinary
teams that work
independently to
achieve common goals
DIVISIONAL STRUCTURE
Within a divisional
types of organizational
charts has its own
division which
corresponds to either
products or
geographies. Each
division contains the
necessary resources
and functions needed
to support the product
line and geography.
 LINE STRUCTURE
Line organizational structure is one
of the simplest types of
organizational structures. Its
authority flows from top to bottom.
Unlike other structures, specialized
and supportive services do not take
place in these organizations.

LINE-STAFF FUNCTIONAL
STRUCTURE STRUCTURE
TEAM-BASED
STRUCTURE

Team-based organizational structures are made of teams working towards a common goal while working on their individual
tasks. They are less hierarchical and they have flexible structures that reinforce problem-solving, decision-making and
teamwork.
 MINI PROJECT– STAGE
1&2
This is a series assignment with 4 stages and 1 explanation
document!!!
Your group is about open a store
What are the specific tasks to be accomplished by your
shop’s employees?
How many employees do you need?
Draw an organization chart based on employee tasks (incl.
management tasks). Each position on the chart will perform
specific tasks or be responsible for particular outcomes.
Should the chart resemble a pyramid, a wheel with hub
and rim, or rather a network(use structure in previous
slide)? Why?
SO, WHAT IS A
BUSINESS SYSTEM
ARCHITECTURE
 is a general description of a system. It identifies its
purpose, vital functions, active elements, and critical
processes and defines the nature of the interaction among
them.
 BUSINESS SYSTEM
ARCHITECTURE
MODEL
Value chain model – Michael PRO3 Model
Porter
 BUSINESS SYSTEM
ARCHITECTURE MODEL

ZACHMAN Framework
https://www.zachman.com/resources/ea-articles-reference/327-th
Read more about TOGAF model e-framework-for-enterprise-architecture-background-description-a
 Firm as series of
activities that add value
to products or services
Highlights activities
where competitive
strategies can best be
applied: Primary activities
vs. support activities
At each stage, determine
how information systems
can improve operational
efficiency and improve
customer and supplier
intimacy
VALUE CHAIN Utilize benchmarking,
industry best practices
MODEL
EXAMPLE
OF VALUE
CHAIN
 ANOTHER
EXAMPLE OF
ORGANIZATI
ONAL VALUE
CHAIN
BUSINESS
ARCHITECTU
RE MODELS
Supply chain operation
reference (SCOR) model -
a three-level model. They
treated the value chain
as Level 0, and treated a
given supply chain as
Level 1. They subdivided
a supply chain into four
major subprocesses:
source, make, deliver,
and return.
 Process architecture is
the structural
design of general
process systems.
is a visual, hierarchical
model of the
processes of an
organization. It is a
critical business
blueprint that guides
decision-makers and

PROCESS executes strategy

ARCHITECTURE
VÍ DỤ VỀ KIẾN TRÚC QUY
TRÌNH
 A GUIDELINE TO CREATE
BPA
Identify the scope
Identify related
stakeholders
Define lifecycle
processes
Organizing and
consolidating level 2
processes
 Business process scorecard
 Multiple value streams

Comprehensive list of
level 1 and 2 for an
organization
 EXERCISE 4.1
Pick an organization and redraw its business process architecture
(using the BPA guidelines).
 PROCESS
IDENTIFICATION
 PROCESS
CATEGORI
ES Management Processes

Core processes cover the essential Define Vision Develop Strategy Implement Manage Risk
value creation of a company, that is the
production of goods and services for Strategy
which customers pay. These include
design and development,
manufacturing, marketing and sales,
delivery, after-sales, and direct Core Processes
procurement (i.e., sourcing required for
the making of products or the delivery
of services). Manage
Procure Procure Market Deliver
Customer
Support processes enable the Materials Products Products Products
execution of these core processes. Service
These include indirect procurement (i.e.,
sourcing of hardware, furniture,
stationery, etc.), human resource Support Processes
management, information technology
management, accounting, financial
management, and legal services.
Manage
Management processes provide Manage Personnel Information Manage Assets
directions, rules, and practices for the
core and support processes. These
include strategic planning, budgeting,
compliance and risk management, as
well as investors, suppliers, and
partners management.
UNDERSTAND
PROCESS
MANAGEMENT
could be made up of
four major
subprocesses: plan
work, organize work,
communicate, and
control work.
Each of these
subprocesses in turn
includes a variety of
different activities.
 PROCESS ARCHITECTURE Process architecture as defined by
British Telecom in 2005
TOP-DOWN APPROACH

The starting point is the process landscape on Level 1 that shows the value Model structure, methodology and
chains of the company. Meta modelling standards
Level
Defines business activities
Level 2 provides a decomposition for each business process of the value

Operations Levels Process Levels Business Levels

Level A Distinguishes operational customer
chains. Business Activities
oriented processes from management
and strategic process

Level 3 provides a further decomposition down to sub-processes and tasks. Shows groups of related business
Level B Logical functions and standard end-to-end
processes (e.g. Service Streams)
Process Groupings Levels
Level 1 Level C Core processes that combine together to
deliver Service Streams and other end-
Core Processes
Process to-end processes

Landscape Level D Decomposition of core processes into

detailed ‘success model’ business
(incl. Value Chains) Business Process Flows process flows

Detailed operational process flows

Level 2 Level E Physical with error conditions and product and
Operational Process Flows geographical variants (where
Business Processes Levels required).

(e.g. BPMN) Level F Further decomposition of detailed

Detailed Process Flows operational where required
Level 3+
© British Telecommunications (2005)
Sub-processes and Tasks
(e.g. BPMN)
APQC PROCESS
CLASSIFICATION
 Is it a process at all?
• It must be possible to identify main action, which is applied to a
category of cases.
• Name is of form verb + noun.
Can the process be controlled?
• Repetitive series of events and activities to execute individually
observable cases.
• Without a clear case notion, process management is not feasible.

PROCESS • Also, without any sense of repetition, a group of business activities

may better qualify as a project than as a business process.
Is the process important enough to manage?

CHECKLIS • There is customer who is willing to pay for outcomes,

• Organization that carries out the process would be willing to pay

T
another party for taking over, or
• Legal, mandatory framework compels an organization to execute
it.
Is the scope of the process not too big?
• 1:1 relation between initial event and activities.

Is the scope of the process not too small?

• Rule of thumb: there should be at least three different actors –
excluding the customer – involved.
• If there are no handoffs between multiple actors or systems, there
is little that can be improved using BPM methods.
 PROCESS
RELATIONS Sequence

HIP
Sequence (horizontal Procure Procure Market Deliver
Manage
Customer
relationship): This relationship Materials Products Products Products
Service
describes that there is a logical
sequence between two processes.
This means that one process
provides an output that the other Decomposition Specialization
process takes as an input

Decomposition (vertical Procure Handle Job

relationship): This relationship Products Application
describes that there is a
decomposition in which one
specific process is described in
more detail in one or more
subprocesses. Handle Job Handle Job
Process Assemble
Application Application
Specialization: This relationship Parts Parts
(Austria) (Germany)
describes that there exist several
variants of a generic process.
Variants are not only defined for
different legal contexts, but also
for different categories of
products or services and for
different types of customers or
suppliers
 PROCESS LANDSCAPE MODEL:
EXAMPLE OF VIENNA PUBLIC
TRANSPORT
Management Processes

Manage Communicate Manage Manage Manage Risks and Manage

The model of the process Enterprise in and out Processes Quality Opportunities Innovation

architecture that covers the

processes on Level 1 is Core Processes
known Manage
Contact Manage Foster
Customer
as the process landscape Relationship
Customer Sales Relationship

model or simply the process Operate Plan and Buy Maintain Check
Vehicles Vehicles Vehicles Vehicles
architecture for Level 1
Transport Plan Customer Transport Evaluate
Customer Transport Customer Transport

Provide Plan Build Maintain Evaluate

Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure

Support Processes

Manage Manage Manage Manage Manage Provide Winter

Personnel Financials Information Materials Disruptions Service
EXERCISE 4.2
What are core, support, and
management processes of a
university?
Clarify terminology:

• Define key terms.

HOW TO
• Use organizational glossary.
• Use reference models.
• Ensure that stakeholders have a consistent understanding of process
landscape model.
Identify end-to-end processes:

• Those processes interface with customers and suppliers. DEFINE

PROCESS
• Goods and services that organization provides are good starting point.
• Properties help to distinguish processes, including: Product type,
Service type, Channel, Customer type.

LANDSCA
For each end-to-end process, identify its sequential
processes:
• Identify the internal, intermediate outcomes of end-to-end process.

PE
• Perspectives help set boundaries: Product lifecycle, Customer
relationship, Supply chain, Transaction stages, Change of business
objects, Separation.
For each business process, identify its major management and

MODEL
support processes:
• What is required to execute the previously identified processes.
• Typical support processes are management of personnel, financials,
information, and materials.
• However, these can be core processes if they are integral part of
business model.
• Management processes are usually generic.

Slide 35
HOW TO DEFINE PROCESS
LANDSCAPE MODEL

Decompose and Compile process Check completeness

specialize business profile: and consistency:
processes:
Processes of process landscape should Each of the identified processes Reference models can be used to
be further subdivided into abstract should be described using process check whether all major processes
process on Level 2. profile. are included.
Further subdivision until processes can Process profile supports definition of Reference models can help to check
be managed autonomously by single boundaries, vision performance consistency of terminology.
process owner. indicators, resources, etc. Check whether all processes can be
Considerations when this subdivision associated with functional units of
should stop: Manageability and Impact. organization chart and vice versa.

Slide 36
 Name of Process: Procure-to-Pay

PROCESS PROFILE Vision: The objective of the procurement process is to secure that the
entire range of external products and services becomes available on time
OF BUILDIT‘S and is at the required level of quality.

PROCURE-TO-PAY Process Owner: Chief Financial Officer (CFO)

PROCESS Customer of process:

 Requesting unit
Expectation of customer:
 Timely, economic and complete
provision

Outcome: Delivered products or provided services for the requested unit

Trigger: Need is identified

First activity: Submit Request

͙ ..
Last activity: Create Purchase Order
Interfaces inbound: Plan-to-Procure
Interfaces outbound: Construct-to-Complete

Required resources:
 Human resources:
Site Engineer, Clerk, Works Engineer
 Information, documents, know-how:
procurement guidelines, supplier rating, framework contract
 Work environment, materials, infrastructure:
Procurement information system

Process Performance Measures:

 Cycle Time
 Operational Costs
 Error Rate
Slide 37
EXAMPLE OF PROCESS MAP
Management Processes

Develop Vision Develop and Manage Business Market and Sell

and Strategy Manage Services Capabilities Services

Core Processes

Contract
Demand-to-Selection Selection-to-Bid Approval-to-Contract
Acquisition

Contract
Contract-to-Plan Plan-to-Completion Completion-to-Expiry
Execution

Support Processes

Manage Human Manage Financial Manage Risk and Manage External

Capital Manage IT Resources Manage Assets Compliance Relationships

Slide 38
EXAMPLE OF SAP PROCESS
MAP
Management Processes

ManageDefine, Operationalize, and Track Strategy Sales, Franchise, and Partner Management
Manage
Enterprise Innovation

Core Processes

Innovate Sell Deliver

Support Processes

Workplace and Corporate Finance Shareholder and

Procure to Pay
Attract, Develop, and Infrastructure and Operational Stakeholder
Retain Workforce Provision Compliance Management

Slide 39
PROCESS SELECTION
CRITERIA
Strategic Importance:

• Find out which processes have the greatest impact on the strategic goals.
• Consider profitability, uniqueness, or contribution to competitive advantages.
• Select those processes for process management that relate to strategy.

Health:

• Determine which processes are in deepest trouble.

• These processes may profit the most from BPM initiatives.

Feasibility:

• Determine how susceptible process is to BPM initiatives, incidentally or

continuously.
• Culture and politics may be obstacles.
• BPM should focus on those processes where it is reasonable to achieve benefits.
Slide 40
PROCESS PORTFOLIO
High Selection Focus Feasibility
Loan Rating
Contract
Controlling Prepatation Low
Loan
Decision
Loan Market
Medium
Evaluation
Importance

Handling
High
Payments

Loan
Loan Planning
Application
Low

Poor Health Good

Slide 41
 Example
A restaurant has recently lost many customers
due to poor customer service. The management
team has decided to address this issue first of all
by focusing on the delivery of meals. The team
IDENTIFY gathered data by asking customers about how
quickly they liked to receive their meals and what
PROCESS they considered as an acceptable wait. The data
suggested that half of the customers would
MEASURE prefer their meals to be served in 15 min or less.
All customers agreed that a waiting time of 30
MENTS min or more is unacceptable.
 PROCESS PERFORMANCE
MEASURES Performance Objectives
Performance
Measurments Formulate performance objectives of the process at a
high level, in the form of a desirable state that the
Time process should ideally reach, e.g., customers should
be served in less than 30 minutes.
Cost
For each performance objective, identify the relevant
Quality performance dimension(s) and aggregation
function(s), and from there, define one or more
Flexibility performance measures for the objective in question,
e.g., the percentage of customers served in less than
30 minutes. Let us call this measure ST(30).
Define a more refined objective based on this
performance measure, such as
ST(30) >99%.

Slide 43
 A travel agency has recently lost several medium-sized and large corporate
customers due to complaints about poor customer service. The

EXERCISE management team of the travel agency decided to appoint a team of

analysts to address this problem. The team gathered data by conducting
interviews and surveys with current and past corporate customers and also

4.3 -
by gathering customer feedback data that the travel agency has recorded
over time. About 2% of customers complained about errors that had been
made in their bookings. In one occasion, a customer had requested a

WHICH
change to a flight booking. The travel agent wrote an email to the customer
suggesting that the change had been made and attached a modified travel
itinerary. However, it later turned out that the modified booking had not
been confirmed in the flight reservation system. As a result, the customer

PROCESS
was not allowed to board the flight and this led to a series of severe
inconveniences for the customer. Similar problems had occurred when
booking a flight initially: the customer had asked for certain dates, but the

SHOULD
flight tickets had been issued for different dates. Additionally, customers
complained of the long times it took to get responses to their requests for
quotes and itineraries. In most cases, employees of the travel agency
replied to requests for quotes within 2–4 working hours, but in the case of

BE some complicated itinerary requests (about 10% of the requests), it took

them up to 2 days. Finally, about 5% of customers also complained that the
travel agents did not find the best flight connections and prices for them.

IMPROVED
These customers essentially stated that they had found better itineraries
and prices on the Web by searching by themselves.

Answering the following question:

? 1. Which business processes should the travel agency select for

improvement?

2. For each of the business processes you identified above, indicate which
performance measure the travel agency should improve
BALANCED
SCORECAR
DS WITH
CASCADIN
G
PROCESS
PERFORMA
NCE
MEASURES
Slide 45