1. IS 788 3.21 IS 788 [Process] Change Management  Wednesday, September 9  Pacific Bell Case – Ricky Medina  Lecture: Modeling Organizations (2 of 2)

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.)

3. IS 788 3.23 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!

4. IS 788 3.24 The alignment cycle

5. IS 788 3.25 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”

6. IS 788 3.26 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.

7. IS 788 3.27 Contrast with a ‘systems view’ of an organization  Simple as it is it shows: customers, work, product and services, suppliers

8. IS 788 3.28 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.

9. IS 788 3.29 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).

10. IS 788 3.210 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

11. IS 788 3.211 What more familiar notation does this resemble?

12. IS 788 3.212 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)

13. IS 788 3.213 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

14. IS 788 3.214

15. IS 788 3.215 The Augmented Organization diagram is simply a detailed version of the Porter’s Environmental analysis model from the prior class

16. IS 788 3.216 Superimpose an org diagram into the ‘black box’ (the box labeled ‘An Organization’) from the ‘augmented org model)  The lines indicate ‘delegation’ relations

17. IS 788 3.217 Redrawn to indicate specific relationships between departments and external entities Again, note the similarity to leveled DFD’s

18. IS 788 3.218 Organization Diagram (another example)

19. IS 788 3.219 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

20. IS 788 3.220 This is an excellent diagram because it shows Multiple levels and the functional-process relationship. (Recall, there will ALWAYS be functional groups.)

21. IS 788 3.221 For positioning key processes in a strategic context – add value chains

22. IS 788 3.222 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

23. IS 788 3.223 Org diagram with limited process detail

24. Defining processes in detail (see ppt 18)

25. IS 788 3.225 Drilling down to the activity level

26. IS 788 3.226 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

27. IS 788 3.227 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

28. IS 788 3.228 Process Categories

29. A multi-organizational value chain. We’ll see BAM management techniques in the Western Digital case. Inter-organizational Processes

30. IS 788 3.230 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

31. IS 788 3.231 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’.