Level: Intermediate S. E Slack (sally@sslack.com), Author and business transformation communications consultant, Freelance writer
21 Nov 2006 Network deconstruction trends are leading to organizations that expect to be widely distributed yet still highly optimized from a departmental perspective. But departments that optimize in this way can have a detrimental effect on the organization as a whole. Learn how to identify and understand the problems and concerns that these trends create
so that you can pull the disparate elements together through effective business process
architecture.
To centralize or decentralize, that is the question
There is an ongoing debate among management consultants about whether decentralization
or centralization of various organizational functions and procedures is the best course
of action for achieving maximum efficiency and optimum profits. Lately, the pendulum
has been swinging in favor of geographic distribution of everything from computer
networks to departmental activities, with a corresponding decentralization of the
organizational structures designed to oversee them.
That's not surprising. Today, as more and more companies seek to establish a national
or global presence, organizational structures are becoming increasingly complex. Not
only are the best and the brightest recruited more aggressively than before, with
work-from-home concessions frequently made, the scale of human activity has increased
as more industries move to larger scales. Employees multitask with a vengeance, daring
computer systems not to keep up. The division of labor has broken into fragments, with
one area of a corporation handling some aspects of the business and another area
handling other aspects. Joe in the Alabama office, for example, might manage the call
center, while Sue in Colorado oversees manufacturing. Carol, who works in public
relations, works from her California home using a virtual private network (VPN).
Questions that weren't asked 20 years ago are now at the top of most management
checklists: Should we outsource? Should we build a central network with redundancies?
Should employees be allowed to work remotely, or should they be on the corporate
premises daily? Instead of optimizing business units, savvy corporations are moving
toward optimizing departmental business processes -- processes that, if integrated
correctly, optimize the entire organization. This kind of social change in how -- and
where -- we work has been the catalyst for network deconstruction trends and the
decentralization of organizational structures designed to manage nodes.
Network deconstruction and decentralization trends
Network deconstruction can be described as both the geographic distribution
of networks that companies increasingly rely upon as well as changes in the kinds
of networks companies use. At the same time, the organizational structures designed
to manage the nodes in these networks are decentralizing. The combination of these
trends, combined with a focus on organizational process optimization, is thought by
some to be the basis for a new type of organization: one that is both widely
distributed and highly optimized.
That type of organization seems to be almost fantasy, doesn't it? Most organizations
have a difficult enough time managing central networks, and it's a precious few
that have shown the ability to optimize processes effectively. But the larger a
system grows in scale, the more likely it is for wide distribution to become a
necessity -- a single node coordinating an entire system is too easy a target for
failure. With that distribution level comes the responsibility to optimize
processes as much as possible to ensure that the organization is held together
by more than wires and hardware.
Smart organizations, then, focus on process optimization even as the organization
deconstructs and redistributes itself. The ability to do both at the same time is
what will bring full organizational optimization -- separation of the two
activities leads to unwieldy, uncontrollable organizations.
"Widely distributed, yet highly organized" -- oxymoron?
The workplace is where computers have an impact on the majority of people -- and
where processes have an impact on most organizations. A customer dialing a call
center, for example, may be handled by the first operator answering the phone
instead of being routed to a specialist if the network is providing all the
necessary information. This system frees up the specialist for other work and
speeds customer service. Yet the sheer free will that the operator exercises
sets a process into motion. If he had chosen to
route the call on to the specialist, a very different
process would have been instigated.
Efficient organizations understand that detailed processes are required at every
level of operation, from marketing and sales to manufacturing and distribution.
Highly efficient organizations realize that departmental processes must be
integrated across the organization to ensure that no gaps or overlaps exist. More
organizations are recognizing that process changes can lead to even
marginal operating improvements. For example, IndustryWeek magazine surveyed
700 U.S. manufacturers in 2005 and found that nearly 80 percent were making process
improvements.
So, the concept of managing business processes within an organization is finally
being seen as a key step in organizational success -- some organizations even have
specific business process departments assigned to track all the processes and
related software and hardware across a company. This tracking is done through a
variety of matrices and road maps, which can be helpful to spotting redundancies in
software or hardware. This information is then input into detailed business process
architecture documents to further identify process problems. This kind of attention
to business processes allows a widely distributed organization to be highly
organized. Yet even these organizations can run into trouble if individual
departments become suspicious or antagonistic toward anyone who attempts to
capture their processes. Used to running with their own rules, these departments
often resist integration efforts, especially when those efforts may result in the
loss of a familiar tool.
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Radial impact: Departmental optimization at the
expense of others
Far too often, departments within an organization don't consider the impact their
isolated process changes will have on other departments. They may choose software
that specifically handles a database task for marketing, for example, but doesn't
integrate with sales databases. As a result, organizations must govern the business
processes involved -- particularly those involving software and systems development.
When performance goals are assigned from the top down, department managers will do
whatever they must to ensure that those goals are met. Missed production goals,
ineffective marketing campaigns, unmet sales targets -- any of these can mean the
loss of a manager's job or the reorganization of an entire department. Smart
managers quickly learn to optimize their own department's processes, regardless of
the impact on another area of the organization.
It's critical, then, that the optimization of business processes take these personal
and departmental issues into consideration. Anticipating the impact of a change in
one department's process on other departments helps ensure that executing Department
A's goal doesn't come at the expense of Department B's goal. The key to effectively
anticipating such impacts is to ask a question about the process change. If there is
more than one answer to the question, add supporting objectives or limits until
there is no room for confusion at the execution stage. For example, if the business
process change is intended to make it easier for sales representatives to increase
sales, continued questions might be:
- How will that be done exactly?
- Will sales of Product A increase as Product B's sales erode?
- Are discounts involved that would affect overall revenue numbers?
- Can manufacturing produce the product quickly enough to meet this goal?
- Will shipping be able to meet increased numbers of sales deadlines?
It's easy to see how a simple change in process to encourage increased sales could
have an immediate radial impact on numerous other departments. Continuing to ask
questions means that the ultimate business process change might change from
"increase sales" to "increase sales of Product A by eight percent while maintaining
sales of all other products at current levels and improving revenue by four points."
The other obvious question here is, if networks and organizational structures have
been decentralized, who is going to keep an eye on how everyone plays together? A
centralized lack of control over distributed organizations and processes is almost
certainly doomed to failure, so senior management must rely on high-level business
process architectures and related business process measures to help them track not
just specific departments but the overall picture of how the departments are working
together. Without these big-picture process views, upper management may never spot
the overlaps or gaps in processes that allow departments to run unchecked, without
regard to their overall impact on the organization.
Creating the business process architecture for
senior management
Architects who work with distributed organizations can be key to the organization's
success if they remember this: In-depth details obscure the larger business process
issues for management. While it is, of course, important that every process be
defined in considerable detail on some level, a truly useful business process
architecture outlines the high-level process view and the basic information needed
to make business decisions that will help management ensure that the organization's
goals are met. That may seem to go against every cell in an architect's body, but
useful -- not all -- information is what upper management needs as it tries to
understand the various departmental issues and concerns.
Look at it this way: When an executive outsources a business process, the primary
concern is not in how the outsourcing organization will staff or manage the process.
Instead, the concern is in whether the process is generating the required results
and can interact with and support related processes within the company. So, when
the high-level business process architecture is developed, it should be with the
idea that upper management will use it instead of organizational charts to
understand the company's operations, measure results, and make decisions for the
future.
In the old days, management decided upon a course of action, and then informed
information technology (IT) so that a plan could be implemented. With a high-level
business process architecture, architects have the power to determine an
organization's future progress, not just respond to the organization's demands.
Yet, without an architecture that management can review and quickly understand all
its implications, that power can be lost instantly. Figure 1
shows an example of a high-level business process architecture developed for
executives at a global company recently.
Figure 1. High-level business process architecture sample
See a larger version of this image.
You can see that while there are a lot of processes involved from a business
perspective, the key points for executives in this case were:
- The presentation layer. (How will the processes look from a
customer or supplier perspective?)
- The business logic execution. (Which processes have to be
implemented throughout the business for the customer or supplier?)
- Data provisioning. (Where is all the data coming from and how
many processes are involved?)
This type of high-level business process architecture makes it easy to see where
gaps and overlaps may be, which in turn allows executives to make decisions
concerning integration and optimization of processes for the good of the
organization. It may be a departmentally focused world, but the processes don't
have to be. Executives are more receptive than you might think when it comes to changing,
improving, or eliminating departmental processes that have a detrimental impact
on the organization as a whole. It's just that often, they don't realize that those
process problems exist.
Paving the way for a better architecture
As you deal with network deconstruction trends in your business, don't despair.
Widely distributed organizations are not going away anytime soon. The global
economy almost dictates that distribution and decentralization trends will continue
for the foreseeable future. It may feel sometimes as if you are fighting a losing
battle as departments refuse to play nicely together; but the more you understand
about their individual problems and concerns, the more you can design a business
process architecture that meets their needs while it pulls together disparate
elements of your organization. Make it your goal to educate your executives in a
language they can understand, and you'll find resources and support in areas you
might never have expected.
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About the author  | 
| | S. E. Slack is a freelance writer and author with more than 16 years of experience in
business writing. She has also been an executive and business transformation
communications consultant to IBM, Lenovo International, and State Farm Insurance Companies. She is currently writing CNET Do-It-Yourself Digital Home Office Projects: 24 Cool
Things You Didn't Know You Could Do (McGraw-Hill) and is the author of six
other books. Contact S.E. Slack at sally@sslack.com. |
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