Modern Enterprise: Processes, the Software of Business

In business, and in many different areas of the universe, one finds two patterns which repeat ad infinitum: Structures and Processes. There are two areas of study in business which explore these subjects in detail. Organizational Structure is a field of study which shows the academic how to create organizations for effectiveness. The other is Business Process Optimization, a field of study that focuses on how to optimize a business by understanding and analyzing the internal processes that make it operate. The subject of Structure was covered very lightly when we discussed People in the last article.

Each structure or organization is made of people. The people all have different roles and each individual and sub-organization has processes that it follows. The “People” were covered in the last article in this series. “Processes” will be covered in this article in the context of a Service-Based Modern Enterprise.

Processes

Processes

The complexity of processes that a Service Business has to undertake depends on the service it offers and the number of people it deals with.

Just as People can be categorized to define function, so can processes. In addition to being categorized by function, processes can be organized by the level upon which they take effect.

The following levels and categories are to be used as guides and are not indicative of every business.

Organization

Organization-level processes are big-picture items that the CEO or owner if the company needs to be on top of to ensure compliance with the law of the land. Business runs on top of the government as software runs on top of an operating system.

  • Government – The processes that define how the organization works with the government. This includes the process of incorporation, yearly incorporation fees, paying taxes and financial reports which are due to the government.
  • Financial – The processes that define how the organization deals with banks, investment funds, retirement funds and other external financial organizations.
  • Society – The processes which define how the organization interacts with the society at large, whether it involves civic involvement or lobbying.

Department

Departmental processes are what make up the organization’s internal operation. This is the “software” of the company. Just as software has different modules that have different functions, a business has different departments which run in conjunction.

As defined before in the “people” article, a service business can be split amongst the people that provide the services and those that support them. The distinction is simple. The processes that produce money can be classified as “Service” where as those that help get the work and get paid for the work or help run the company can be classified as “Support.”

Support

  • Sales – Processes that help get business through the doors, or that convert prospects into accounts.
  • Marketing – Processes that build awareness of the organization, through Public Relations, advertisement, email marketing, etc.
  • Accounting – Processes that ensure proper bookkeeping, expense management, billing, invoicing and accounting.
  • Customer Service – Processes that ensure that customers are happy and have an outlet for complaints or a way to request service.

Service

Each type of service business can have its own process for delivering its service. The following processes are part of what a web design, development or internet strategy company – like Anant – might use.

  • Planning & Discovery – The processes for understanding what the client needs.
  • Design & Architecture – The process which defines what work needs to be done for a client.
  • Development & Delivery – The process of creating and delivering to the client what they agreed to.

Roles

Eventually, all organizational and departmental processes need to be executed by people, namely people that have certain roles within an organization. Smaller companies have the same person wearing many of these “hats” and may even have different people sharing these “hats.” Here are some roles and the processes that they are responsible for:

Chief Executive Officer

  1. Execute Business Processes
  2. Build alliances with Partners
  3. Increase Profitability
  4. Acquire competitors for growth
  5. Support Sales Staff

Sales Person

  1. Lead Collection
  2. Prospect Qualification
  3. Cold Calls
  4. Sales Meetings
  5. Close Sales

Internet Architect

  1. Analyze business processes
  2. Analyze internal and external systems
  3. Draft architecture diagrams and documents
  4. Draft functional requirements
  5. Draft specifications documents

Each business is different and hence each set of departmental, or role-based, procedures will be different. What is the use of creating departmental structures and processes? Having a map of an organization, its departments, the roles within and the responsibilities of each person has many benefits. Here are some:

  1. Business continuity – new people can be introduced into the processes easier because the work is documented.
  2. Ownership of responsibilities – by defining departments, roles and responsibilities, each part of the business can have business owners that can be held accountable for their work.
  3. Compartmentalized functionality – compartmentalizing parts of a business follows the principles of the division of labor and encourages efficiency from within. By having segmented processes, a business owner can decide to outsource part of the company or replace a vendor with an in-house group.

Business processes are defined for the same reason that constitutions are written for countries. They are written to let the organization and all of its people know what the organization does, who does it and who is held accountable. If processes are defined, the organization and its people have a baseline to perform to. Process mapping reduces the gray areas of performance measurement. Unlike a constitution, a business process document or manual won’t ensure people’s rights – but it will firmly establish how an organization operates.

In business, and in many different areas of the universe, one finds two patterns which repeat ad infinitum: Structures and Processes. There are two areas of study in business which explore these subjects in detail. Organizational Structure is a field of study which shows the academic how to create organizations for effectiveness. The other is Business Processes.

Each structure or organization is made of people.  The people all have different roles and each individual and sub organization has processes that it follows. The "People" were covered in the last article in this series. "Processes" will be covered in this article in the context of a Service Based Modern Business.

Processes

The complexity of processes that a Service Business has to undertake depends on the service it offers and the e number of people it deals with. A very complex service could be delivered by a 5 person company and it would take the same amount of time as a service delivered by 50 people in half the time.

Just as People can be categorized to define function, so can processes. In addition to being categorized by function, processes can be organized by the level upon which they take effect.

The following levels and categories are to be used as guides and are not indicative of every business.

Organization

Organization level processes are big picture items that the CEO or owner if the company needs to be on top of to ensure compliancy with the law of the land. Business runs on top of the Government as software runs on top of an operating system.

- Government - the processes that define how the organization works with the government. This includes the process of incorporation, yearly incorporation fees, paying taxes, financial reports.

- Financial - the processes that define how the organization deals with banks, investment funds, retirement funds, etc.

- Society - the processes which define how the organization interacts with the society at large , whether it involves civic involvement or lobbying.

Department
Departmental processes are what make up the organizations internal operation. This is the "software" of the company. Just has software has different modules that have different functions, a business has different departments which run in conjunction.

As defined before in the "people" article, a service business can be split amongst the people that provide the services and those that support them. The distinction is simple. The processes that produce money can be classified as "Service" where as those that help get the work and get paid for the work or help run the company can be classified as "Support."

- Support
-- Sales - processes that help get business
-- Marketing - processes that build awareness of the organization
-- Accounting - processes that ensure proper book keeping, billing, invoicing, etc.
-- Customer Service - processes that ensure that customers are happy

- Service

Each type of service business can have it's own process for delivering it's service. The following processes are part of what a web design, development, or internet strategy company might use.

-- Planning & Discovery
-- Design & Architecture
-- Development & Delivery
-- Launch & Marketing

Roles

Eventually, all organizational and departmental processes need to be executed by people, namely people that have certain roles within an organization. Smaller companies have the same person wearing many of these "hats" and may even have different people sharing these "hats."

Here are some roles and their jobs.

Chief Executive Officer - The CEO is responsible for the following processes.

1. Execute Business Processes
2. Build alliances with Partners
3. Increase Profitability
4. Acquire competitors for growth
5. Support Sales Staff

Sales Person - The sales person is responsible for the following processes.

1. Lead Collection
2. Prospect Qualification
3. Cold Calls
4. Sales Meetings
5. Close Sales

Internet Architect

1. Analyze business processes
2. Analyze internal and external systems
3. Draft architecture diagrams and documents
4. Draft functional requirements
5. Draft specifications documents

Each business is different and hence each set of departmental, or role based procedures will be different. What is the use of creating departmental structures and processes?

Having a map of an organization, it's departments, the roles within, the responsibilities of each person has many benefits.  Here are some:

1. Business continuity - new people can be introduced into the processes easier because the work is documented.
2. Ownership of responsibilities - by defining departments, roles, and responsibilities, each part of the business can have business owners that can be held accountable for their work.
3. Compartmentalized functionality - compartmentalizing parts of a business follows the principles of the division of labor and encourages efficiency from within. By having segmented processes, a business owner can decide to outsource part of the company, or replace a vendor with an in house group.

Business processes are defined for the same reason that constitutions are written for countries. They are written to let the organization and all of it's people know what the organization does, who does it, and who is held accountable. If processes are defined, the organization and it's people have a baseline to perform to. It reduces the gray areas of performance measurement and what a person's job. Unlike a constitution, a business process document or manual won't ensure the rights of the people (it may) but it will memorialize the operation of an organization for years to come.
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