As Sandy Kimsley pointed out in her links; Ken Swensen responded to the question, is BPM Dead? In all of our discussions of technology, business processes, business rules, business events, it is easy to lose focus on the basic meaning of business process management.
So, it is useful to review the differences between function- and process-orientation within organizations. Most organizations that use BPM intend to become process-centric. Organizations with a strong process focus are distinguished by having a pervasive, cultural process orientation. Big, complex organizations consider the process focus as very important, and this structure is very common in insurance, healthcare, and financial services. A functional organization orientation, on the other hand, is more prevalent in small enterprises and is well-suited to the way they operate business.
A functional organization is an organization that delivers a deep capability in a limited number of functions. These might include highly specialized product and skills where expertise or availability is limited. Obviously, a functional focus works for them,
Each of these focuses-functional versus process-centricity-has its advantages and disadvantages. In his commendable work on business process management, James Chang created the table below that summarizes the differences between organizations adopting each focus. A functional organization allows an easier balance of work among workers with functional excellence because they all have similar skills. This organizational style outlines simple, comprehensible ways that each task should be performed and assigns this to the appropriate proponent.
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Functional Organization
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Process Organization
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Work Unit
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Department
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Team
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Key Figure
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Functional Executive
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Process Owner
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Benefits
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Functional excellence
Easier work balancing because workers have similar skills
Clear management direction on how work should be performed
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Responsive to market requirements
Improved communication and collaboration between different functional tasks
Performance measurements aligned with process goals
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Weaknesses
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Barrier to communication between different functions
Poor handover between functions that affects customer service
Lack of end-to-end focus to optimize organizational performance
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Duplication of functional expertise
Inconsistency of functional performance between processes
Increased operational complexity
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Strategic Value
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Supports cost leadership strategy
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Supports differentiation strategy,
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Work Management
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Functional Quality Focus
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Cross Functional Coordination
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Table 1 Benefits and Drawbacks of the Functional Versus Process orientation in organizations (Business Process Management Systems, Chang ).
Conversely, a process organization enjoys improved communication and collaboration and may thus be extremely responsive to market requirements. Further, performance is easily measured across the process organization, as it is stated in terms of process goals. However, process organizations suffer from lack of or poorer quality communication between the different functions relative to their functional counterparts. There is reduced end-to-end focus, as opposed to the functional structure. Moreover, there may be considerable duplication of functional expertise, inconsistent functional performance between processes, and increased operational complexity. This may make the structure of the process-based organization redundant and bulky.
- Tom Debevoise