IS 788 3.2 1

IS 788 [Process] Change Management

Wednesday, September 9

Pacific Bell Case – Ricky Medina Lecture: Modeling Organizations (2 of

2)

Determining Value Chains

Surprisingly, Harmon through extensive consulting engagement states that many companies have trouble with this.

Who belongs to which value chain Harmon suggests this is frequently

decided by locking high level managers in a room until consensus is reached. (Discuss socially created reality.)

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Process and Organization Modeling in Practice

Resembles a “facilitated” JAD session Architecture committee and “domain

experts” work with a ‘process analyst’ who facilitates the explication

May have a modeling software specialist in addition

Frequently neither the business analyst or the modeler are IT personnel!

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The alignment cycle

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Organizational Modeling

What do you get when you ask a manager to “describe their organization”?

That’s right – an org chart – which provides no information on Customers Products Services Work flows

Most managers have never modeled (or taken a detailed look at) the work that they “supervise”

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The ‘Org chart mentality’ Org charts depict ‘silos’ Each silo is a functional ‘fiefdom’ Each manager works to ‘better’ his

department even at the expense of the organization

This is because this is how compensation is traditionally arranged

Managers (like doctors and IT folk) think in terms of their mental models – what you see is what you’re prepared to see.

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Contrast with a ‘systems view’ of an organization

Simple as it is it shows: customers, work, product and services, suppliers

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Two types of systems diagrams:

Organization diagrams and Process diagrams In a sense, process diagrams emerge from

‘drilling down’ into entities in organization diagrams

It takes multiple diagrams to model an organization

Note: in the class and in the text model and diagram are synonyms. In many other contexts, models are much more formal than diagrams.

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UML vs. BPMN

Lots of academics and even a few consultants use UML for business modeling

Most practicing vendors and consultants have found UML too complex for easy communication with a managerial audience

BPMN, which the BizAgi software uses, is a less complex notation in very wide usage (most US BPM software).

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Organization Diagrams

At its most basic (Fig. 4.3) the organization is a black box

Interactions with the environment are stressed

Similar to a context level DFD, but with much more information

Flows not limited (as DFD) to information to/from and IT system

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What more familiarnotation does this resemble?

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High Level Org Diagram It is generic – I challenge you to find

something that can’t be modeled In UML it would be called a class

diagram – can be instantiated for multiple actual objects

Yet very useful for strategy discussions

Note ‘nested’ (composite) classes (Market/customers entity)

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Augmented Org Diagram

Many strategic concerns take place at the level of interaction with external stakeholders

Use text narrative to add explicit concerns to the generic model

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The Augmented Organization diagram is simply a detailed version of the Porter’s Environmental analysis model from the prior class

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Superimpose an org diagram into the ‘black box’ (the box labeled ‘An Organization’) from the ‘augmented org model)

The lines indicate ‘delegation’ relations

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Redrawn to indicate specific relationships between departments and external entities

Again, note thesimilarity to leveled DFD’s

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Organization Diagram (another example)

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The diagram (or model) hierarchy

Eventually each of the ‘departmental’ boxes in figure 4.6 can be expanded, frequently to processes or subprocesses

Figure 4.7 shows the decomposition hierarchy

IS 788 3.2 20This is an excellent diagram because it shows Multiple levels and the functional-process relationship. (Recall, there will ALWAYS be functional groups.)

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For positioning key processes in a strategic context – add value chains

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Value chains in context

A very good tool for management audiences

Note the numeric designator for the value chain process in the Finance department in Fig. 4.8

This indicates the process level model for that value chain subprocess

In some tools, a diagram at this level is hyper-linked to lower level diagrams

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Org diagram with limited process detail

Defining processes in detail (see ppt 18)

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Drilling down to the activity level

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Types of processes

It is frequently helpful to classify processes to assist in ranking candidates for improvement

Are there production related issues? These are ‘core’ processes

Is managing the processes the larger issue These are management processes

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Types of processes (2)

Are their problems with outsourced or other external support functions – or issues with material suppliers? These are ‘support’ processes

Usually all three are present in broad view of a single core process

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Process Categories

A multi-organizationalvalue chain. We’ll see BAM management techniques in the Western Digital case.

Inter-organizational Processes

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Accounting and process thinking

Most accounting systems, even Activity Based Costing, can not give a full profitability analysis of a value chain

Diagrams such as 4.7, 4.8 or 4.9 are very useful in illustrating the large number of actual processes – from customer acquisition through delivery – that must be evaluated to give accurate product line costs and profitability

Manufacturing just doesn’t tell enough of the story any more

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More on the shift to process thinking As noted, we see what our cognitive models

prepare us to see When we model processes, we see

processes and they become significant Process thinking is also know as “systems

thinking” A very influential book by Peter Senge,

“The Fifth Discipline” has promoted process /systems thinking among managers

You might want to read this book and be prepared to recommend it (or discuss it with) your management ‘clients’.