The Overview Of Process Oriented Companies

Published Date: 02 Nov 2017

Companies operate in an increasingly competitive environment with flexible and market oriented structures. Therefore process oriented or process based companies organize themselves focused on their business processes. According to Mathias Kirchmer (1999) these processes are designed, implemented and managed based on the companies ERP or SCM software.

According to Michael Hammer, James Champy and Sheer (1993) ?the operations of process oriented organizations are based on object oriented views. These views do not recognize individual functions, but rather a series of functions that carry out an overriding task by providing the customer with a meaningful result. An example would be order processing, starting from the entry of the customer order, right up to the delivery of the appropriate item. In reengineering process orientation is beginning to take the place of the hitherto prevailing function concept. Complete business processes rather than individual functions, are now the center of discussion.? (Business process oriented implementation of standard software: how to achieve competitive advantage efficiently and effectively, Mathias Kirchmer, 1999)

According to KELLER 1993 and SCHEER 1993 ?optimizing activities individual departments leads to the optimization of entire business processes in business process oriented organizational structures. When a single entity is in charge of the entire business processes. When a single

BCM porgam management

Understanding the organization

Determining BCM strategy

Developing and implementing BCM response

Exercising, maintaning and reviewing

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entity is in charge of the entire scope of tasks, this simplifies and accelerates a comprehensive reaction of individual organizational units (e.g. every department in a company) to the requirements of the procurement market.? (WOMACLK, 1992)

On the contrast in functionally oriented organizational structures, the corporate mission of an enterprise is broken up into the functions to be carried out (FRESE, 1993; KIESER, KUBICEK, 1992; PROBST, 1992) thus, individual areas of the company contain identical single functions that they execute for the whole enterprise (the sales function working all the products of the organization).

?A process perspective necessarily entails cross-functional and cross-organizational change. Yet,

in most companies no one is in charge of processes because the organization is divided into

functional or product departments in which work is not organized around processes but around

tasks. On the contrary, a process perspective is customer oriented and implies a horizontal view

of the business that cuts across the organizational departments. Process owners have full responsibility for the effective and efficient running of a process. He or she guides the process team that can operate largely on its own. Consequently, management roles have to change drastically from budget planning and control to guidance and support for operational units. One of the major factors inhibiting these change and reengineering efforts is the existing organization structure. However, the literature is silent about what the implications for the organization structure might be if a company migrates towards a more process oriented organization.? (Wim Vanhaverbeke and Huub Torremans, 1998)

2.7 BUSINESS CONTINUITY PLAN

According to Stuart Hotchkiss ?a Business continuity Plan is the documented procedures defining what happens when risk scenarios materialize. The plan should cover all scenario�s and procedures and act as guide when disruption occurs. The business continuity plan is updated and maintained via the BCM process defined in the previous paragraph. A continuity plan is a collection of things that should be done when an incident occurs that disrupts operations. For each potential risk there should be a procedure (or a plan) to be executed that will reduce the impact or even prevent the impact from occurring. Note that the measure is impact, not the loss of the asset. For example a small disc crash on a computer which costs nothing to repair can cause immeasurable impact and damage if the data it hold is important and there is no mitigation for its

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loss (mitigation could be some form of backup, for example). Small impact events can also cause damage in terms of time to repair. A small part failing when there are no spares in stock can cause a fairly impact on business but can cost a lot of money to repair because of a lack of planning. This means that you need to consider the impact and the damage as well as the recovery cost to come to a reasonable idea of the cost of not having a continuity plan.? (Business Continuity Management: In Practice, Stuart Hotchkiss, 2010)

A business continuity plan is simply a document which breaks down (or should) into all the little sub-plans (or procedures) to execute when things go wrong. Often reference is made to =continuity plans� (plural) � in this book they are called procedures and the collection of procedures plus supporting data is the business continuity plan. A continuity plan can be a specific plan for the failure of either an individual part of a business (such as a product line or service) or a physical area (site) where the impact affects many lines of business. The site failure is the most common view of what a business continuity plan should be but this is erroneous because it leads to the idea that continuity plan is only about site failure and moving to alternative sites or using alternative sites. Site failure represents a small part of the outages which cause business impact. When writing a BCP it is important to determine the maximum tolerable period of disruption which is according to the British standards ?the duration after which an organization�s viability will be irrevocably threatened if product and service delivery cannot be resumed. Also the recovery time objective should be determined. This is the target time set for:

? Resumption of product or service delivery after an incident; or

? Resumption of performance of an activity after an incident; or

? Recovery of an IT system or application after an incident.

The recovery time objective has to be less than the maximum tolerable period of disruption.? (British Standards Institution BS 25999-1, 2006)

2.8 BUSINESS IMPACT ANALYSIS (BIA)

According to BSI, 2006) BIA is ?the determination and documentation of the impact of a disruption to the activities that support an organization�s key products and services.? (British Standards Institution BS 25999-1, 2006) And according to Stuart Hotchkiss (2010) this is ?the process of determining which areas of a business have potential losses requiring mitigation and what controls are needed. Controls can reduce, or occasionally, eliminate risk and loss. Controls cost

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money and, in BIA, the objective is also to balance the cost of these with risk appetite. Risk appetite is simply the tolerance for risk - some companies accept high risks, others don�t. The output of a BIA should give sufficient information to company management to enable them to protect the critical resources needed to protect their revenues. The primary goal is to prioritize the revenue streams: this will automatically exclude some revenue streams and business processes from further analysis. (Here =revenue� refers to real revenue or potential losses due to, for example, intangible factors like damaged reputations.) Senior management should have the information to decide:

? Which business units, operations and processes are absolutely essential to the survival of the organization;

? How quickly essential business units or processes have to be back in operation (i.e. at what point the impact is no longer tolerable);

? Which recovery alternatives are the most plausible for meeting the recovery times;

? Which resources are needed to resume operations at a survival level for the business;

? Which elements must be implanted in advance in order to meet the recovery times;

? How much money to spend on risk mitigation.? (Stuart Hotchkiss, 2010)

?For each activity supporting the delivery of key products and services within the scope of its BCM program, the organization should:

1. assess over time the impacts that would occur if the activity was disrupted;

2. establish the maximum tolerable period of disruption of each activity by identifying:

a. the maximum time period after the start of a disruption within which the activity needs to be resumed,

b. the minimum level at which the activity needs to be performed on its resumption, �

c. the length of time within which normal levels of operation need to be resumed;

identify any inter-dependent activities, assets, supporting infrastructure or resources that have also to be maintained continuously or recovered over time.? (British Standards Institution BS 25999-1, 2006)

?When assessing impacts, the organization should consider those that relate to its business aims and objectives and its stakeholders. These may include:

1. the impact on staff or public wellbeing;

2. the impact of damage to, or loss of, premises, technology or information;

3. the impact of breaches of statutory duties or regulatory requirements;