Generic Types of Business Processes and IT Systems

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Business process management is a critical research discipline in modern business. It examines the idea of a business process as an entity that can be analyzed, developed, and designed. The design of business processes generally involves all levels of an organization, and significant exchange of information between them. Using information technology (IT) can facilitate or enable this exchange of information, as well as assist in the decision making related to process management. Such decisions require a significant understanding of the process management background, the distinctions between different types of processes, and the dimensions in which processes can vary.

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Organizational Levels

Organizations can be broadly divided into three levels: strategic, tactical, and operational. These levels correspond to the severity of decisions made at each particular level. Some models include a portfolio level between the strategic and tactical levels (Globocnik, 2020). At the strategic level, the organization’s top management makes decisions that define its long-term functioning and development (Globocnik, 2020). At the portfolio level, if it is distinct, these strategic choices are converted into business models and plans (Globocnik, 2020).

The tactical level management is concerned with creating specific plans and ensuring the chosen business model’s effectiveness (Globocnik, 2020). Finally, these plans are implemented at the operational level, where the specifics of their working process are adapted to the environment (Globocnik, 2020). As all these levels rely on one another to maintain an organization’s effectiveness and efficiency, a reliable flow of information between them is critical.

An organization can be viewed as a series of processes that span between its levels. Individual processes are sequences of events; however, a business process can be designed or engineered. This involves significant information that must be gathered and analyzed in a two-way exchange between organizational levels (Srinivasan & Swink, 2018). Information is generally collected at the lower, operational level, then analyzed and used in decision making at higher levels.

Generic Types of Business Processes

Several competing definitions exist for processes within an organization. Davenport (1993) defines a process as “a specific ordering of work activities across time and place;… a structure of action” (p. 8). Under this definition, processes focus on the ways in which the organization delivers products and services to customers, rather than which products and services these are (Davenport, 1993).

Three key generic types of processes are offered: “product development, customer order fulfillment, and financial asset management” (Davenport, 1993, p. 7). Such a division emphasizes the operational nature of these processes and the focus on providing goods and services to the customers. This model views customers as the ultimate goal for any business process.

A competing view of an organization’s processes views them as evolutionary. Dickson (2003) argues that the system that drives change in these processes or routines is akin to biological evolution, where new processes emerge as imperfect copies of existing ones and replace older processes if they are more effective or efficient. In this view, a top-down hierarchy of nested processes exists, divided into organization learning processes, resource deployment processes, system control processes, and operational processes (Dickson, 2003). This definition underlines the direction in which processes change in response to shifts in the environment. Dickson’s model emphasizes business processes need to change, as well as the gradual nature of these changes.

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Interorganizational and Interfunctional Processes

Regardless of definition or particular model used, organizational processes can be divided into interorganizational and interfunctional ones. Interorganizational processes take place between two or more organizations (Davenport & Short, 1990). These processes commonly involve the buying and selling transactions, such as procurement (Davenport & Short, 1990). Interfunctional processes, on the other hand, cross functional or divisional boundaries within an organization (Davenport & Short, 1990).

Management processes tend to be interfunctional as they concern more than one division (Davenport & Short, 1990). As business become more interdependent and shift towards performing more specialized tasks, the importance of interorganizational processes increases. While these processes are generally beneficial to firms, designing them brings additional challenges, particularly in coordination and information exchange between organizations (Nandy & Seetharaman, 2019). However, as organizations grow larger and their divisions more complex, similar principles apply to interfunctional processes, particularly in regards to coordination and cooperation (Glas, Lipka, & Essig, 2019). In addition to its definition in terms of whether it occurs between organizations or functions, a business process can vary in its general properties that are relevant to its design.

Task Difficulty and Variability

Individual tasks, as well as entire processes, can be viewed in terms of two dimensions: difficulty and variability. Difficulty refers to the complexity, knowledge, and time required to perform the task (Van de Ven & Delbecq, 1974). Variability, describes the amount of exceptional cases in the work process that require unique solutions (Van de Ven & Delbecq, 1974).

Although these dimensions might seem related, in Van de Ven & Delbecq’s (1974) model, they are viewed as completely independent. A task’s variability and difficulty have a significant effect on the structure of a work unit undertaking it (Van de Ven & Delbecq, 1974). Therefore, they are significant factors in designing a business process, and should be considered in the decision making.

Decision Making and IT

Decisions are divided into two categories: primary and secondary decisions. Primary decisions are ones that concern the entire organization’s functioning in regards to its stakeholder (Wijnberg et al., 2002). These strategic decisions are generally taken at higher organizational levels (Wijnberg et al., 2002). Secondary decisions, conversely, are made in the context of the priary decisions, but they generally consider specific operating procedures rather than the whole organization’s functioning (Wijnberg et al., 2002).

An organization’s top management level is generally concerned with primary decisions, its operational or work floor level is generally concerned with secondary decisions (Wijnberg et al., 2002). Although the precise point in the hierarchy at which the emphasis shifts from primary to secondary decisions varies between organizations, it generally falls within the level of middle management; thus, this level makes both primary and secondary decisions (Wijnberg et al, 2002). Due to the exchange of information between the organizational levels required for these decisions to be effective and efficient, information technology (IT) is critical in facilitating or enabling them.

Since its introduction to business environments, information technology (IT) has allowed swifter, more accurate and reliable transmission of data between the levels of an organization. The use of IT allows information to be collected and analyzed with less possibility of human error (Wijnberg et al., 2002). Furthermore, it allows relevant information to be delivered to upper organizational levels sooner, enabling them to make primary decisions to quickly respond to changes in the business environment (Wijnberg et al., 2002).

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The increased availability of relevant organizational information to its employees additionally increases the accountability and homogeneity of lower and middle management for their secondary decisions (Wijnberg et al., 2002). Finally, information systems can be utilized for more in-depth analysis of data (Kitsios & Kamariotou, 2018). By formalizing and improving information streams, IT can make decision makers more accountable before their stakeholders or upper levels of management (Wijnberg et al., 2002). IT is, therefore, critical to modern business and project management.

Business Process Components

Finally, business processes can be viewed as consisting of five components. These components include the people and other entities that perform the process; considerations describing the steps of a process; the relationships between these elements; links to other processes; and finally, any resources involved in the above considerations (Mackenzie, 2000). All of these components are important in defining a process from a business process reengineering point of view. As this point of view relies on structuring and formulating processes, clearly established relationships between the entities involved in the process, its steps or stages, are critical.

Furthermore, processes or activities have inputs and outputs, which often connect them together (Kim & Jang, 2002). Thus, the removal of any one of these components can disrupt the process or render it impossible to perform. This, in turn, affects other processes to which it is connected via its inputs or outputs. From a project engineering perspective, such an incomplete process will not be able to function as it will lack either the means of performing, the method of performing, or the inputs, outputs, and controls that must be connected to other processes.

References

Kitsios, F., & Kamariotou, M. (2018). Decision support systems and strategic planning: information technology and SMEs’ performance. International Journal of Decision Support Systems, 3(1/2), 53-70. Web.

Davenport, T. H. (1993). Process innovation. Harvard Business School Press.

Davenport, T. H., & Short, J. E. (1990). The new industrial engineering: Information technology and business process redesign. MIT Sloan Management Review. Web.

Dickson, P. (2003). The pigeon breeders’ cup: A selection on selection theory of economic evolution. Journal of Evolutionary Economics, 13(3), 259-280.

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Glas, A. H., Lipka, P., & Essig, M. (2019). Misperceptions in inter-functional supply management: Work-share coordination vs. integrated cooperation. Supply Chain Forum: An International Journal, 20(2), 89-103. Web.

Globocnik, D., Faullant, R., & Parastuty, Z. (2019). Bridging strategic planning and business model management – a formal control framework to manage business model portfolios and dynamics. European Management Journal, 38(2), 231-243. Web.

Kim, S. & Jang, K. (2002). Designing performance analysis and IDEF0 for enterprise modelling in BPR. International Journal of Production Economics, 76(2),110-125.

Nandy, M., & Seetharaman, P. (2020). Interorganizational processes in buyer–supplier dyads: An information intensity perspective. Journal of Organizational Computing and Electronic Commerce, 29(2), 96-114. Web.

Srinivasan, R., & Swink, M. (2018). An investigation of visibility and flexibility as complements to supply chain analytics: An organizational information processing theory perspective. Production and Operations Management, 27(10), 1849-1867. Web.

Van de Ven, A. H., & Delbecq, A. L. (1974). A task contingent model of work-unit structure. Administrative Science Quarterly, 19(2), 183-197.

Wijnberg, N.M., Van Den Ende, J., De Wit, O. (2002). Decision making at different levels of the organization and the impact of new information technology. Group and organization management, 27(3), 408-429.

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