BPTF Architecture Overview - Value Chain Group

Copyright©2010ValueChainGroupallrightsreserved|PartIBusinessProcessTransformationFramework4Thiscomplete,threedimensionalviewoftransformationdefineswhatparticularvaluestreammustundergotransformation,whatactionableitems(functions)areaffectedbyinthetransformation,andhow,overtime,thetransformedvaluestreamsmustevolve.Thefirstpartofthisthreepartarticleseriesdefineseachofthetransformationdimensionsandprovidesinsightsintohowtocompileacompleteandeffectiverepresentationofthetransformedbusinessprocess.ValueChainSegmentationThisBPTFdimensiondefinesbusinessprocessesasconnectedvaluestreams.Valuestreamsincludeactivityflowwithexplicitinformationflow(calledinputsandoutputs),businessmetricsandtimelineassociatedwiththeflowinexecution(e.g.,durationoftheprocessfromonepointofI/Ohandofftoanotherpointinthesamevaluestream).Anexampleofavaluestreamis“ordertocash”,witheachactivityclearlydefined,theirI/Oconnectivitydefinedalongwithmetricsandtimelinessofeachtransactionwithintheprocess.BPTFDefinition:ValueStream–anendtoendsetofactivities.Orderfulfillment,forexample,isavaluestreamforwhichtheinputistheorder,andtheresultisthedeliveryoforderedgoods.Orderentryisoneactivityinthecollectionofactivitiesthatconstitutetheorderfulfillmentvaluestream.Segmentation,bothoftheexternalmarketplaceandofanorganization’sinternalvaluestreams,isessentialtomaximizingtheefficiency,effectiveness,profitabilityandcustomersatisfactionratingsofmostorganizations.Therearemanyunfortunateandsometimesterminalexamplesoftheoppositeoutcomefororganizationsthathavenotunderstoodtheimportanceofsegmentation.Essentially,segmentationmeansthatonesizerarelyfitsall.Allcustomersarenotthesame(e.g.,businesscustomerversusconsumer),notallcustomersbuyinthesameway(e.g.,retailoutletversusInternetpurchasesite)andnotallproductsorservicescanbeprovidedusingthesameassetsinthesamefacility(e.g.,youdon’tmakenutsandboltsinachocolatefactorythatmixesnutsandnougat)!Thedifferentiateddemandsofthemarketplaceforproductsandserviceshasimplicationsforhowanorganizationsells,produces,deliversandsupportsthoseproductsandservices.Atypicalglobalcompanyencompassesdifferingbusinessesandmultiplestrategicbusinessunits(SBUs).Fromahighlevelperspective,allSBUshavesimilarities.Forexample,theyallperformfinance,sales,marketing,andotherbasicfunctionalactivities.ButamoredetailedexaminationwillrevealthatsomeofthosefunctionalactivitiesdifferbySBUdependinguponthemarketeachSBUservesandthebusinessobjectivesofeach.Valuestreamsegmentationsimplytranslatesexternalmarketrequirementsintokeyinternaloperatingprocessrequirements.Theseprocessrequirementsmanifestthemselvesasphysicalorvirtualdifferencesinsitelocations,processes,systems,productionlayouts,leadtimes,qualityattributesandskillrequirements.Aneffectiveorganizationdevelopsamarketsegmentationmodelthatmeetsthespecificneedsofitsmarkets,customers,channels,productsandservices.Disciplinedvaluechainsegmentationenablescompaniestounderstandandspecifymorefullywhatexternallyfacingprocessesareneededintheprocessmodelingofthenextstepinthebusinessarchitectureroadmap.