Organizational Structures

As organizations have matured in the management of their business processes, issues regarding process integration have arisen, i.e., how various processes must join as a collective whole to ensure a single, coherent organization which consistently delivers value across all of the company’s processes. These organizations have identified the need for new mechanisms for planning, budgeting, and allocating resources in order to ensure that their processes are properly resourced, integrated, and aligned with their strategic objectives.

It is critical that organizations have a clear governance structure to provide leadership and clarify decision rights to enable cross-functional and departmental process improvement or management programs to succeed. Often, it is changes in the organizational governance structure that can be the root of resistance to business process management initiatives, sometimes causing them to fail. Individuals who may have had a great deal of power and control over resources based upon organizational functions, product lines, or geographic boundaries may find that their performance measures, authority, and span of control must change in order to successfully implement business process management. The reason for change is simple. Business process management provides an end-to-end perspective of how work is done. This end-to-end perspective crosses traditional organizational boundaries and requires that the mechanisms by which decisions are made and resources are allocated must also be aligned with the end-to-end business process. A sound governance provides a structure of authority and a framework for collaboration. This structure and framework enable proper allocation of resources and efficient coordination of activity control throughout the organization. Traditional managers who are unable to adapt their thinking beyond their organizational silo to end-to-end business process management are likely to resist initiatives which may change their influence in the organization.

8.3.1 Process Governance

There is no single standard governance structure which is widely in use. Organizational focus on process is still emerging and there are a wide variety of governance structures in use and evolving. Issues such as organizational strategy, culture and process maturity, business process outsourcing, and even the nature of individual leaders can cause a significant deviation from any given governance framework. Gartner has suggested four separate frameworks for governance, but goes on to say, “Do not try to fit your [process management] efforts into a ‘cookie-cutter’ framework. Focus on whether the proper skills, relationships, and mandates for action are available and defined in a clear and powerful governance structure.”12

12 _{Melenovsky, M, Hill, J, 2006 “Role Definition and Organizational Structure: Business Process} Improvement,” Gartner Research Brief.

Figure 8-413

8.3.2 Process Council

Organizations undertaking the process journey may want to consider instituting a process council to address these issues. A process council may be made up of a combination of executive leaders, functional or departmental heads, and the process owners of the core cross-functional enterprise processes. Its mission may include the identification and resolution of any cross-process integration issues, conflicts between process and functional (or departmental) ownership, resource allocation, and the development and alignment of the organization’s business objectives, goals, and strategy.

13 _Ibid.

Figure 8-5

8.3.3 BPM Office/BPM Center of Excellence

Some institutions, particularly in government, have created what is referred to as a Business Process Management Office (BPMO) or a BPM Center of Excellence (BPMCOE). Many BPMO’s act in a manner similar to that of a project management office, identifying, consolidating and reporting status on various process improvement projects across the enterprise. BPMCOE charters include setting standards, providing common tool and methods, training and education on business process management principles and practices, providing governance on overall process design, and integrating business processes at the enterprise level. BPMO/BPMCOE’s play an integral role in prioritizing and allocating scarce resources to business process improvement efforts, as well as tracking and reporting process performance metrics to the respective process owners and executive management. In government, many BPMO’s have a role in enterprise architecture efforts as mandated by the Office of Management and Budget (OMB). The OMB Federal Enterprise Architecture Framework (FEAF) requires agencies to maintain models of their key business processes and relate them to other architectural models such as business reference, technology, and performance models. BPMO/BPMCOE’s are responsible for maintaining the repository of process models, identifying opportunities for improvement, and working with various

stakeholders in the development of business cases for process improvement and transformation efforts.

8.3.4 Functional Centers of Excellence

As businesses mature in implementing process management, assigning accountability for the management of core business processes, and developing mechanisms to integrate and align these processes, they may discover the nature of how work is performed and evolves in the organization. Rather than command and control the performance of individual tasks, process owners find that they need to be supported by cross-functional teams who are also focused on the performance of the overall process. Instead of command and control oversight, these teams may work relatively independently with guidance and support from management.

Companies encounter a need for change in the required skills and culture of their organization as they gain experience in process management. They need to maintain and integrate new skills and professional expertise across all business processes. Specialized skills may have previously resided in a functional group of the enterprise. Best practices groups, sometimes called centers of excellence, provide knowledge, standards, best practices, training, and education. They are responsible for ensuring the proper resources with proper skills are placed and allocated properly throughout the company’s business processes.

Figure 8-614

Centers of excellence may be virtual organizations (often known as a Community of Interest, or COIN). For example, it may be an email distribution list to connect all engineers, or they may be robust, institutionalized groups with large training facilities. Many centers of excellence are organized around a particular skill or profession: sales, marketing, finance, information technology, etc. Coaches may be assigned to business processes from the centers of excellence with a responsibility for supporting and developing members in order to ensure that the caliber of localized skills are maintained and enhanced. Centers offer training and education programs as well as professional networking for sharing experiences. Some organizations use centers of excellence as an entrée for people, i.e., they are hired by the center and deployed from the centers to process teams.

14 _{Concept derived from Dr. Michael Hammer’s 1997 book “Beyond Reengineering – How the process} centered organization is changing our work and our lives” Dr. Hammer discusses several case studies relating to the evolution of the process centered enterprise, including the introduction of centers of excellence.