We have discussed with you the main types of organizational structures , but there is another key area - business processes. If org. structure is the skeleton of the organization, then business processes are the central nervous system with built-in reflexes.
Perhaps this all seems boring to you, but in our practice there is one simple rule - there is nothing worse than the arguments “it’s already clear”, “it’s too simple”. They don't bode well. These theses are harbingers of chaos and neglected problems
In general, in life there are 2 extremes of process management - chaos and bureaucracy
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Basic approaches to describing business processes
Before diving into the question “how to describe it,” first let’s answer the question: “What are business processes?”
A business process is a specific algorithm of interconnected actions of people and IT systems, which is aimed at transforming “raw materials” into a “product” or result.
For example, the procurement business process roughly includes the following stages: receiving an application - searching for suppliers - collecting proposals - supplying materials - transferring to the customer. But each stage is also broken down into separate business processes. Therefore, you need to understand that describing business processes is an almost endless task; you will need to choose the level of detail at which you say “that’s enough.” And the lower the team’s level of competence, the more detailed the description is needed. Well, or you need to train the team, but then you, as a leader, will also need to grow. Smart personnel will not tolerate being treated like fools.
Conventionally, there are several approaches to describing business processes:
An approach that allows you to describe at the highest level the key areas of activity of the company and divisions and show the relationships between them. Here the focus is on the graphical display of business processes that create value for the client.
That is, this is a kind of “master” model of the entire company to give the entire team an understanding of how their work affects the entire company.
Rules for constructing a value added process model (VAD)
First, you need to determine the key objectives of the company or division that characterize its activities.
Next, their logical relationship is built
The owner and department responsible for the process are identified and specified.
Key documents that regulate the business process are indicated
Additional information and necessary resources to complete the business process are indicated.
Each top-level business process is assigned or attached links to diagrams (VAD or EPC) of a lower level.
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An approach to describing business processes, which is a tool in lean manufacturing. The name reflects the essence of the approach, which focuses on:
Supplier - a person or company that supplies resources to complete a business process (production, money, materials);
Input (inputs) - resources for the business process: materials, money, production capacity);
Process (processes) - all those tasks that, as a result of the work of a business process, allow transforming raw materials into the final product;
Output – products of the business process;
Customer – recipients of the service, those who use the product of the business process.
Algorithm for describing business processes:
1. Determination of the customer of the business process;
2. Description of the final product (output) that the customer needs;
3. 5-7 key operations of the business process;
4. Determining the necessary resources (inputs) for the business process;
5. Identifying suppliers of these resources.
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This approach describes business processes in the form of individual stages/steps of the process and the events that initiate these steps, that is, the structure “event - function - event” is obtained. This approach is well suited for standardizing business processes and analyzing the flow of documents and necessary information throughout the entire business process.
Basic elements of the description:
An event is something that creates the need for action.
A function is an action to obtain the desired result in response to an event.
Performers are those who implement the function, including those who approve, coordinate, and so on.
Resources are everything that is needed to implement a function: money, information systems or individual modules, documents, operational risks.
Unlike the previous approach, where the start was on the left and the finish on the right, here everything starts from the top and goes down.
Description algorithm:
We determine what we have and what we want - boundary events.
We describe the intermediate events that exist within this process and what tasks need to be performed / functions implemented
We add all the necessary information about performers and resources.
Analysis of the completeness and quality of the scheme, whether it takes into account all variations and subprocesses. If necessary, we make additional diagrams for subprocesses. However, here we recommend that you always remember a simple rule - one diagram, one sheet or screen.
The advantage of the approach is the ability to then create understandable regulations in the form of text or tables. This notation is quite common, especially in large organizations. Since, on the one hand, it standardizes the description, and on the other hand, it is quite flexible. For example, it is often used to set up ERP systems .
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BPMN today is a de facto standard for describing business processes with a wide range of graphic elements for description and modeling. While this may not be the most convenient approach for ordinary users and managers, for business analysts this is a must-have tool: within the framework of this approach, it will be difficult to describe a fairly large process on 1 sheet; in addition, the approach is quite strict, but there is higher detail and it is easier to identify local errors. An example of a description in this notation is below.
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Flowchart notations are used to represent the process execution algorithm and allow you to specify cause-and-effect relationships and the time sequence of process actions. The notations support decomposition into subprocesses.
The difference between the Process and Procedure notations is that in addition to the graphic symbols used in the Process notation, the Procedure notation uses Swim Lanes to denote the organization. units - performers of process actions. This improves the visibility of the diagram.
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IDEF is a whole family of methodologies of the ICAM (Integrated Computer-Aided Manufacturing) family. This family of notations and modeling methods was originally developed for the US Air Force to describe work processes and implement IT systems. And if you communicate with IT integrators or plan to automate business processes through IT systems, you will come across exactly this approach. But of course, if you are comfortable working with this approach on a daily basis, then you can use it for other scenarios.
The IDEF family includes the following standards:
IDEF0 is a methodology for functional modeling ( Function Modeling ). The most common approach of DEF1 and IDEF1X is Information and Data Modeling Method. IDEF1X provides a clear graphical language for describing objects and relationships in applications, called an entity-relationship diagramming language. The most popular approach currently
IDEF1 and IDEF1X - Information modeling (Information and Data Modeling Method). IDEF1X provides a clear graphical language for describing objects and relationships in applications, called an entity-relationship diagramming language.
IDEF2 - Behavioral modeling (Simulation Modeling Method). Behavioral modeling is based on models and methods of simulation of queuing systems and Petri nets.
IDEF3 - Activity Modeling (Process Flow and Object Stale Description Capture Method). The methodology details the answer to the question not “what the system does,” but “how the system does it.”
IDEF4 - Object-oriented Design Method. The model provides the user with a graphical language for depicting classes, inheritance diagrams, and taxonomy of methods.
IDEF5 - Systematization of application objects (Ontology Description Capture Method). The model represents the ontological information of the application in a user-friendly form. For this, symbolic designations (descriptors) of objects, their associations, situations and a schematic language for describing relationships of classification, “part-whole”, transition, etc. are used. The method has rules for linking objects (terms) into sentences and axioms for the interpretation of terms.
IDEF6 - Using Design Rational Capture Method. Helps prevent structural errors.
IDEF8 - Human-System Interaction Design. The model is intended for designing dialogues between a person and a technical system.
IDEF9 - Taking into account conditions and restrictions (Business Constraint Discovery). The model is intended to analyze existing conditions and restrictions (including physical, legal, political) and their impact on decisions made in the reengineering process.
IDEF14 - Modeling of computer networks (Network Design). The model is intended for presenting and analyzing data when designing computer networks in a graphical language with a description of configurations, queues, network components, reliability requirements, etc.
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Unified Modeling Language (UML) is another process modeling approach that is actively used in IT. It is a notation that can be used for object-oriented analysis and design. It can be used to visualize, specify, construct, and document software systems.
UML has 12 diagrams that define the statistical, behavioral, and physical activities of system components. The most accessible and relevant at present:
Use-case diagram. It is based on an Actor (performer), which establishes logical connections between roles and precedents, and a Use case (the precedent itself), which demonstrates which process is being executed.
A Class diagram is a set of static and declarative model elements that have common attributes and operations. The diagram has the most complete and detailed description of connections in the program code, functionality and information about individual classes.
An Activity diagram displays the dynamic aspects of behavior and the overall performance of a system in a flowchart format. A diagram is necessary to describe business processes, the interaction of multiple systems, the logic of procedures and work flows, especially when moving from one activity to another.
A Sequence diagram describes the behavioral aspects of a system, the type of messages, and clarifies use cases. Necessary for displaying the interaction of objects in dynamics and over time, it implies the exchange of messages within a specific scenario.
The deployment diagram displays a graphical representation of the infrastructure, namely the distribution of system components across nodes and the routes of their connections. A diagram organizes components and solves minor problems associated with a specific aspect of a business process.
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One of the lean manufacturing tools, along with SIPOC . Also Value Streams are a fundamental component of SAFe® (Scaled Agile Framework®) and come in two types: Development Value Stream (DVS) and Operational Value Stream (OVS).
Value Stream Mapping is a tool that visualizes the process of transforming raw materials into finished products sold to consumers. Its objects are material and information flows of resources, as well as time.
Creating Value Stream Mapping is divided into three blocks:
A production or process flow is a traditional flowchart in which, from left to right, the path of value creation is recorded, starting with the purchase of raw materials and ending with the shipment of products. If, in addition to the main process, there are additional or auxiliary ones, they are applied under the main one. In this way, the main tasks are separated from the secondary ones.
Information or communication flow - at the top of the value stream map, arrows depict information flows that occur in parallel with production. Both formal and informal data exchange are taken into account. Information flows are plotted on the map in free form, as they flow in reality.
Timeline and distances are lines that are drawn at the bottom of the map. The time line is divided into upper and lower parts. The lead time is displayed at the top - the waiting time. The cycle duration is shown below. Below the time line there may be another line, at the very bottom, showing the distances along which the product or personnel move within the process.
Simplified operation algorithm:
Step 1. Selecting a process for systematizing the value stream (preparatory)
Step 2: Value Stream Mapping Symbols
Step 3: Defining Process Boundaries
Step 4: Process Steps
Step 5. Adding information flows to the map
Step 6: Add data about each step of the process
Step 7. Inventory counting
Step 8. Adding process chronology - Timeline
Step 9: Future State Map
Step 10: Plan for Implementing Improvements
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Types of processes
If you begin to build process management, then you need to understand what kind of processes can there be in an organization?
Classification first
According to this classification, there are 3 types of processes.
Value creation/production
The main production processes that create value for the end consumer and affect the cost of services, income: sales, production, etc.
Their effectiveness determines the effectiveness of the company as a whole.
Managerial and supervisory
Processes related to strategic, tactical and operational management. Including approaches to management decision making.
For example, strategy development, production planning, monitoring and measuring performance, financial accounting and planning, project management, etc.
Supporters
Processes that ensure the implementation of value-creating processes: hiring, training and adaptation of personnel; equipment maintenance and repairs; logistics and procurement; IT support.
They can be divided into providing, service, auxiliary, etc. Supporting business processes are associated with certain costs, and the more efficiently they proceed, the less costs the company incurs.
Second classification
Production processes and operational processes
These processes are associated with the production of goods or the provision of services. These include planning, resource procurement, production, quality control and delivery of the final product or service. Manufacturing and operational processes aim to optimize productivity, reduce costs and improve the quality of a product or service.
HR processes
These processes are related to the management of human resources of the organization. These include recruitment, training, development, employee evaluation, performance management, motivation and retention. Human resource management processes are aimed at creating effective teams, developing the potential of employees and ensuring a high level of staff performance and satisfaction.
Marketing and sales processes
These processes are related to positioning products or services in the market, attracting customers, developing marketing strategies, promoting and selling products or services. Marketing and sales processes are aimed at satisfying customer needs, increasing sales and establishing long-term relationships with customers.
Financial management processes
These processes are related to the management of the organization's finances and resources. These include budgeting, financial analysis, investment management, accounting and reporting. Financial management processes are aimed at ensuring financial sustainability, efficient use of resources and making informed financial decisions.
Quality Management Processes
These processes are associated with ensuring a high level of quality of a product or service. These include quality planning, quality control, data analysis, nonconformity resolution, and continuous improvement. Quality management processes are aimed at satisfying customer requirements, minimizing defects, increasing reliability and strengthening the organization's reputation.
Summary
That is, you need to both describe how these processes work and design the future state based on these classifications. An excellent assistant for building process activities is ISO 9001.
Process levels
Another question that will arise when starting a process activity is the number of process levels. As a rule, there are 3-5 levels of processes.
We recommend the following gradation
Level 1 - general
General description of the company's activities. VAD-scheme of the entire organization. Just like the organizational structure allows you to see the overall picture of the organization.
Level 2 - strategic
External processes are aimed at solving the strategic objectives of the enterprise; several departments can participate in them. So-called end-to-end processes. For example, the distribution of raw materials and materials among the company's production divisions. annual budget planning, strategy development, project portfolio planning, product management and development, strategic decision making.
Level 3 – tactical
Tactical processes achieve tactical goals. Planning of resources and monthly production plan, project management, quality control, order acceptance and production launch scheme.
Level 4 – operating
At this level, individual tasks and operations of the operation are performed: accepting applications, calculating CP, transferring to production, setting up a new employee’s workplace, etc.
Summary
Before dealing with operational processes, it is necessary to go through the upper levels - to describe the general scheme of the organization, it is also useful to describe the organizational structure, the processes of the upper level. And only after this do we move on to tactics and descriptions of individual operations. There is no need to rush and immediately dive into details. The operational level should be described primarily for critical and high-risk operations.
Conclusion
What benefits does a business get from working with processes?
Well, if you have finished reading this article, then most likely the question in your head is: “Which notation should I choose? Which is better?” The answer is quite simple - none. You need to choose a notation for the task and command. The main criterion is that it be clear. You need to understand who will use your scheme and what the level of competence of these people is. If you are a young team/manager, then start with “high-level” notations, for example VAD , VSM . This way you will understand how your team works as a whole. Further, as practice shows, Flow Charting works well in Process notation. It is simple and suitable for managing a single process. Also a great option is Procedure notation in the same approach. For working personnel in our practice, an ordinary block diagram works well.
The most common mistake is drawing huge maps. It is not right. No one will look at the sheets. Choose a “piece” so that it fits on 1 screen or A4 sheet.
And as we said earlier - think about who will work with this description, he must understand the description. Therefore, it is possible to deviate from strict notations. Here is an example below - a description in the form of a simple block diagram and explanation, but this was enough for those who had to work with them, and this already made it possible to bring the description of what is on paper to what is in life.
Also an example of a job description with marriage
Another example is adapting the Process notation
You also need to understand that if you print 1 process on 100 pages, people will simply get confused. Yes, in our age, numbers still have to be printed, because some people still do not perceive monitors well, this must be taken into account. Secondly, not everyone has good large monitors or combinations of them. And in digitalization, we need to think about the convenience of those who ultimately use it all.
For tasks of business analysis and deep dive it is already necessary to use BPMN 2.0 or EPC, for designing IT systems - IDEF.
Another rule is to think about the culture in your company.
The advantage of startups is high flexibility and focus on results. At the same time, due to the total refusal of formalization, big problems with efficiency arise. In large companies, on the contrary, there is a problem of excessive bureaucratization, which kills productivity.
In addition, the more mature an organization you are, the more resources you can allocate, the more complex combination of notations and more detailed descriptions you can use. If you are a small team with limited resources and changes are quite frequent, then you will simply drown in these descriptions
Final list of recommendations:
You need to start working with processes from the moment you found your product and buyer, started selling on an ongoing basis, and there are more than 10-15 of you
Initially, create a VAD diagram for the entire company and prepare a register of processes indicating the owner as well as the participants
Then use product management and systems constraint theory to select priority business processes
It is also important to describe those business processes that are stable and are the best practice for others. Or, conversely, a description of problematic business processes is useful
There is no need to describe every business process. Only those tasks that are either typical or pose business risks
Start describing processes with approaches that are clear to you and taking into account who will use them
Describe business processes so that they fit on one A4 sheet
When you hire a new employee, after 2 months ask him about which processes seemed too difficult and which ones were missing, n
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