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Archive of posts tagged IT

Main Characteristics of a Process-Oriented Organization

According to (Hammer, 2007; Harmon, 2007; Hinterhuber, 1995; Melan, 1989; Reijers, 2006), an organization which has adopted the process-view exhibits the following characteristics:

First, a prerequisite for managing an organization based on its processes is to know which business processes are performed within the organization and how they are related to each other. Hence, a process-oriented firm explicitly designs and documents its business processes.

Second, management needs to support the process program. Without the support of senior executives, the process idea cannot unfold its full potential.

Third, the existence of process owners is the most visible difference between a process enterprise and a traditional organization. A business process needs to have a manager who has end to end responsibility of the process.

Fourth, a process-oriented organization comprehensively applies the concept of process performance measurement. By focusing measurement on processes rather than functions, alignment and common focus across separate organizational units can be achieved. Implementing measures and taking corrective actions are operating precepts of process management.

Finally, there are other characteristics a process-oriented organization exhibits, including a process-oriented corporate culture (e.g. teamwork, readiness to change, and customer focus), IT systems which seamlessly support business processes, a process-oriented organizational structure, people and expertise (e.g. existence of process redesign and change management experts), process-oriented HR systems (e.g. existence of an incentive system emphasizing the process’ needs) and the existence of a BPM office coordinating and integrating process projects.

Further information on the characteristics of process orientation can be found in this blog post: The Components of Business Process Management.

Information on which process management components are important for improving firm performance can be found here: The Effects of Process-Oriented Organizational Design on Firm Performance.

Process Performance Measurement in Outpatient Clinics

This article is a brief summary of the paper “An ERP-Based Process Performance Measurement Approach in an Outpatient Clinic” by Kohlbacher M., Gautsch A., Zenz H. and Leodolter W., published in Academy of Health Care Management Journal, Vol.4, No.2, 2008.

Process orientation does not only work for process industry, but can be applied to service industries as well (Davenport, 1993). There is empirical evidence that hospitals with a high degree of process orientation are moderately but significantly more efficient (Vera and Kuntz, 2007). There is no doubt that health care institutions need to become high performers. In order to gain high performance, the organization has to determine its performance indicators, measure its performance, derive the performance gap and initiate actions to close the gap (Jennings and Westfall, 1994).  Assessing processes by means of performance indicators is a prerequisite for process control and serves as a basis for process optimization. Sometimes business processes are fully supported by an operative system like an enterprise resource planning (ERP) system collecting data from which process performance information can be extracted – automatically and free of additional cost.

The paper shows an efficient way for continuous performance measurement of the outpatient treatment process (from a patient perspective) as realized in an Austrian hospital. Performance measurement focuses on time and efficiency of the process. In this hospital the outpatient treatment process is supported by an ERP system which already collects process data of every patient going through the process, primarily for reasons of accounting and invoicing. The process performance measurement approach introduced in this paper uses the data of the ERP system, defines performance indicators, calculates and visualizes the resulting process performance. The paper also compares the ERP approach for collection process performance data with other data collection techniques (client flow analysis, patient surveys, and sensor networks).

With the ERP approach introduced, peak times can be located and reduced which results in shorter patient waiting time; appointments and resources (personnel, facilities) can be better planned and benchmarking between departments can be performed. In general, the impact of any organizational change on process performance can be shown almost in real-time. Although automatically collecting performance data represents a great advantage (there are almost no additional operating costs), the ERP approach does not come without problems. For example, ERP systems are primarily designed to support business processes; collecting detailed process performance data is not their main purpose. Hence, they do not record all desired process performance data.