process architecture

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Process architecture encompasses all the business model elements associated with the process aspect of the business organization. These elements are the activities of the business organization. All activities of the business organization fit the following process classification --

  • throughput processes - these are the processes which generate and distribute wealth for the business organization
    • demand creation -- branding, advertising, placement, image management
    • sell -- calls, problems solving, contracts, negotiation
    • order -- order taking, offering configuration, order configuration, order processing
    • plan -- plan capacity, plan orders, plan delivery
    • source -- supply base development, supplier selection, resource acquisition, inbound logistics
    • make -- value add processes, material conversion
    • deliver -- channel development, offering delivery, outbound logistics
    • service -- post-delivery servicing, remote support, on site support
    • return -- return mistakes, warranty, end of life
  • organizational processes - these are the processes of organization itself, which manage the resources of the firm. These processes enable the throughput and creation of future potential processes.
    • measurement -- generate truth; the generation and dissemination of information, understanding, and knowledge
    • decision -- making choices; creating power-to-do; development and duplication of power, authority, and responsibility; provide governance
    • membership -- create commitment; provide meaningfulness and excitement of what is done
    • conflict management -- formation and institutionalization of values for regulation of behaviors and decisions
  • creation of future potential - processes to develop new capabilities, offerings, and businesses
    • skills development -- development of the capabilities of the members of the organization
    • innovation producing processes (see types of innovation) --
      • research -- search for new technologies
      • process development -- development of new process capability
      • offering development -- development of new offerings
      • business innovation -- business model innovation to improve value provided and the efficiency in delivering that value
      • business startup -- the creation of whole new business models
      • management innovation -- a marked departure from traditional management principles, processes, and practices, or, a departure from customary organizational forms that significantly alters the way the work of management is performed (Hamel, 2006).
    • strategic management -- at its core, strategic management is about producing the ongoing innovation needed to evolve the business organization, sustaining its competitive advantage.
  • competencies --
    • What are the competencies required to conduct business?
    • Which of those are core to the business, as in critical to the value provided by the business and its strategic success?
    • Of those, which ones are distinctive, unique and critical to a competitive advantage?
    • What is your business better at than anyone else in the world?
    • What could your business be better at than anyone else in the world?
  • value system processes --
    • What are the processes from the origination of the value system to the end customer and the end of the product life cycle?
    • What are the costs and value added by process?
    • What is the performance by process?

These process elements have architectural aspects to be considered as part of the business design. How modular vs. integrated these elements are will drive their costs, effectiveness, modifiability, extendibility, and customizability. See modularity and configuration. The degree of alignment of each element and the purpose of the business determines overall value in the customer's eyes and in the fulfillment of purpose. The designs of these elements are driven by the demands of the functions and accommodate the availability of the resources of the structure of the business. Degree of compatibility between the function, process, and structure architectures determines the effectiveness of the business.

Competencies --
Competencies are embedded within and made up from the processes of the business. The architecture of the processes, their nature and the network of processes, form the competencies of the business organization. Processes contain the know how of the organization. Processes designed and developed to produce unique capabilities are the basis for a distinctive competency. A distinctive competency is essential to achieving a competitive advantage. See competency for more information.

Value system --
The value system is the comprehensive network of processes producing the function to the end customer of the value system. The make-up, or architecture, of the value system plays a critical role in the value produced for the end customers and whether any or all of the entities owning the processes of the value system have a competitive advantage. An organization's process architecture fits within the overall architecture of the value system.