Process Event Chain (EPC)
This approach describes business processes in the form of individual stages/steps of the process and events that initiate these steps, that is, the structure of the «event – function – event» is obtained. This method is well suited for standardizing business processes and analysing the flow of documents and necessary information throughout the business process.
Main elements of the description:
– An event is something that creates the need for action.
– Function is an action to get the desired result, in response to an event.
– Performers are those who perform the function, including approving, coordinating, etc.
– Resources are all that are necessary for the implementation of the function: money, information systems or individual modules, documents, operational risks.
Unlike the previous approach, where the beginning was on the left and the finish on the right, everything starts from the top and goes down.
Description algorithm:
– Determine what we have and what we want – boundary events.
– Describe intermediate events that are inside this process and what tasks need to be performed / to implement functions.
– We add all the necessary information on implementers and resources.
– Analysis of the completeness and quality of the scheme, whether it takes into account all variations and sub-processes. If necessary, make additional schemes for sub-processes. However, here I recommend always remember the rule from the first book – one scheme, one sheet or screen.
Plus, the approach – the ability to then create clear rules in the form of text or table. This notation is quite common, especially in large organizations, because on the one hand it standardizes the description and on the other it is quite flexible. For example, it is often used to configure ERP systems.
BPMN 2.0 (Business Process Model and Notation 2.0)
BPMN – today a de facto standard in the description of business processes with a wide set of graphical elements for modelling. If for ordinary users and managers this is not the most convenient approach, then for business analysts it is a mandatory tool: to describe within this approach a fairly large process on one sheet will be difficult, in addition, the approach is quite strict, However, this is more detailed and it is easier to identify local errors.
An example of the description in this notation below.
An example of a simplified BPMN scheme
What I observe in life and apply myself
Unfortunately, in 99% of companies or no description of business processes, no top-level or even more detailed, or it is formally and made to tick, and in life everything works differently. Additionally, as long as the organization is small, 5—10 people, it is not scary. But after it begins to grow, chaos becomes more expensive pleasure.
In my life I adjust to the task, the level of maturity of the company and employees. It is mainly a hybrid of EPC and Notation Procedure (more on QR code at the beginning of a section), and sometimes a simple flowchart.
Summary 1 of the chapter and recommendations
More importantly: organizational structure or business processes described? Where to start? This is a perennial discussion. My personal opinion: as long as the company is small, it is becoming or restructuring, the selection of the business model that will give a result, you can do without business processes. If you have an organizational structure, clearly defined functions, a key product and, preferably, metrics (I do not make this a must, because I have seen isolated cases of a qualitatively developed system of key indicators), then you will not drown in chaos. People will be able to communicate and negotiate among themselves, which is a key element. I would even say that it is a useful exercise to first teach people to work together, sharing power, responsibility and resources, and then to implement process management. As a result, the work with the Org. structure will create a skeleton of the management system, including:
– ensure efficient use of resources;
– increase productivity;
– minimize the need for regulations, rules, detailed descriptions of each business process, in general, in the work with paper;
– minimize risks to the company, especially those related to dependence on individuals;
– reduce people’s congestion and turnover. Instead of one or two universal «working horses» there will be a distribution of tasks, the uncertainty that causes stress and burnout will be reduced;
– unload yourself as a leader: you do not have to often interfere with processes and understand conflicts, as the system will become transparent, everyone will understand their area of responsibility. It’ll be easier to pick up people and prepare job descriptions.
In addition, in the early stages, including the start of digitalization, your business processes will change too often, and constantly change and update them – too expensive a pleasure. Additionally, if you describe and «freeze», you lose the main advantage of the young team – its flexibility. The exception is critical processes with high risks and back-office processes, they are often stable and better dealt with initially.
However, after the initial stage is completed, it is necessary to engage in business processes. It is not necessary to fix everything and detail, but the most critical processes, where the risks are high, where problems begin to occur, should be described at least at the upper levels. Top-level approaches have the main advantage – speed and simplicity. And this will have an effect, and therefore, resources and motivation for in-depth work.
For grown-up companies there is another problem – bureaucracy. There is already a reverse approach – simplification of business processes. In general, as always, the search for a balance between chaos and entrepreneurship and order with bureaucracy.
As I said earlier, the right org is important. structure, proper distribution of authority, resources, responsibility and people, taking into account their psychology, system and personality balance. Additionally, if you listen to the classic science of Peter Drucker’s administration, you have to initially describe who you need, and then you have to choose the person for these tasks. This is the key message of his work «Effective Leader». But I have a slightly different opinion here.
This approach in a pure form is viable in an already mature company, where the requirements for candidacy are grounded, and the structure is balanced. In addition, such a company is attractive in the market due to the decent payment and the established reputation. If you are still young, you do not have a balanced system and/or you do not have a queue of applicants, then a certain flexibility is required. Yes, it is better to base on the principle of Peter Drucker, but the organizational structure needs to be adapted to the available resources and people, their psychological qualities, soft skills and competencies. That is, as usual, remember how to, but seek balance with what is.
This is basically the basic rule of life, and there is no ideal solution or methodology for either organizational structures, business processes, or project management approaches and so on. It is impossible to get rid of the psychology of people and technologies or tools to solve all problems, but to strive for an effective and autonomous system is necessary.
If you decide to approach the search for a new employee systematically: describe the functionality, requirements, its KPI, what characteristics should have, it does not mean that you will find the ideal, but it means that you are likely to find someone who will be useful to the company, will be suitable for its culture, although in some details will differ from the image of the ideal candidate.
How to build a suitable organizational structure? And how often to revise it?
I recommend the following algorithm:
– Define the goals of the company, its strategy: rapid growth, smooth, holding positions, scaling to new markets. It also determines which areas of the organization to focus on.
– Evaluate a company: what industry and its potential, what product, what technology lies at the core, and how often will have to implement projects, what markets.
– Assess available technologies and resources, including digital ones.
– Choose a structure and describe for each unit and position 4—6 key functions, target product, required competencies (professional, personal) and, where possible, available resources.
– Describe the main business processes, starting with the VAD-approach. Here you need to see the main stages of product creation, understand which of the participants in the process creates value and what.
– Assess: Do all these people and units create value? Where are the losses? What can be abandoned with digital technology or outsourced? If you only build a company, it will provide minimal costs, and if you transform, you will release resources to priorities.
Another recommendation: When goals are achieved or after the introduction and mastery of new technologies, revise your organization. structure. Or make it a rule every 6 to 12 months.
With regard to business processes, I can make the following recommendations:
– initially make a VAD-scheme throughout the company;
– prepare a process registry (first, second and third level processes, process owner, process participants);
– then take advantage of product management and system restriction theory to select priority business processes;
– it is also important to describe those business processes that are stable and are the best practice for others. Or, conversely, useful description of problematic business processes;
