Business Process Analysis
The analysis of business processes uses basically the same methodology that i. described earlier in this chapter with respect to process. analysis . In addition, however. a noted above, business process analysis recognizes that the business process being analyzed is dependent on the outputs If other business processes (or processe: ) and similarly. other business processes (or processes) are dependent on the output of the business process under evaluation. The analysis of a business process involves benchmarking and recngineering. both of which are explained in detail in the following sections, Likewise, the performance measures for business processes are similar to those used to evaluate processes, In addition to the operational-oriented measures described earlier in this chapter, there are often additional measures of performance that are specific to each business process, Examples of these business process-specific measures are presented in Exhibit 5.11. The first step in analyzing a business process is to define the process boundaries, It is extremely important to clearly establish (a) where the process begins and ends. (b) the inputs and outputs of the process, and (c) the other processes in the organization that either impact on or are impacted by the process under evaluation, In determining the process boundaries, the scope of the process is defined, which is critical. Process analyses that have too wide a scope are often too complex to analyze properly. and therefore become unmanageable, The resulting analysis, in these cases, is very often difficult to understand, measure. and ultimately change. On the other hand. procesess that are too narrow in scope only have the potential for limited improvement. Business process analysis can take place at various levels within an organization, The degree of detail that is used in the analysis is often referred to as granularity. Business process analysis that is conducted at a high level but does not get into a great amount of detail is said to be of large granularity, whereas an analysis that is done in greater detail is referred to as being of small granularity. Once the boundaries of the business process being analyzed are established, the firm must then link its overall corporate strategies to the process ' In other words, the firm must clearly understand how the process under evaluation contribute to its competitive advantage. For example. if a company competes by being low co-t and providing fast delivery, the process must be analyzed with respect to how the process contributes to 10 cost and
ast delivery. By linking strategy to the business process, the firm can more easily identify the key measures that it will use to evaluate the process. The third step is mapping the process. Here a process flow chart is developed. providing a visual context for analyzing the process. This chart provides both the analyst and the process owner with a clear understanding of the boundaries of the process and the various steps that are involved. When mapping the process, it 'is important to understand the specific order in which the steps are performed, how long each step takes, and the resources
that are required. As part of the mapping process, the various steps that are required are often grouped by functional area to more clearly illustrate the cross functionality of the process. as shown in Exhibit 5.12. As stated above, the firm's strategies provide a basis for determining which key measures are to be used to evaluate the process. After the process is evaluated, it is benchmarked to determine how it compares with similar processes both internally within the firm and externaly with those of other firms. The combination of performance measures and benchmarking provides management with some clear insights for identifying the major
problems with the process that need to be corrected. In the last step, the process is improved through reengineering, which identifies and addresses the root causes of the problem. However, determining how the process is to be reengineered is not sufficient. The successful implementation of the necessary process changes is just as important as the changes themselves. As a final note. these process evaluations should be conducted on a periodic basis to ensure that the process continues to perform in the desired manner.