Over the last 10 years or so, we have been witnessing a major paradigm shift from the information age to the relationship age (see Table 1). According to Galbreath (2002), the relationship age is truly about the value of the relationships a firm maintains and manages. Customers, employees, suppliers and partners all contribute synergistically to the economic output of the firm. Ashkenas, Ulrich, Todd, and Kerr (1995) put it more formally by saying that many organizations were faced with a rate of change that exceeded their capability to respond, and that they had to attempt to retool their organization in order to meet an entirely new set of criteria for success. Hence, a firm carrying out business in the Relationship Age is essentially focusing on improving one or more of the success factors such as speed of execution, process and product flexibility, knowledge integration, and ability to innovate new and profitable processes, products, or services (Ashkenas et al., 1995).
Key Terms in this Chapter
Performance Management: The process of establishing objective criteria against which unit and individual performance can be measured, providing performance feedback, managing performance problems, rewarding and recognizing outstanding performance, and enhancing performance continuously (P-CMM v2.00, 2001; Curtis et al., 2001).
Continuous (Business) Process Improvement (CPI): “Involves explicit measurements, reconsideration, and redesign of the business process…CPI may be performed after BPR and before information systems and computers are used for automating a process” (Georgakopoulos & Tsalgatidou, 1998).
Process Performance Baseline: A documented characterization of the actual results achieved by following a process, which is used as a benchmark for comparing actual process performance against expected process performance.
Business Process Reengineering (BPR): “Is the activity of capturing business processes starting from a blank sheet of paper, a blank computerized model, document, or repository. Once an organization captures its business in terms of business processes, it can measure each process to improve it or adapt it to changing requirements” (Georgakopoulos & Tsalgatidou, 1998).
Process Improvement: A program of activities designed to improve the performance and maturity of the organization’s processes, and the results of such a program.
Process Lifecycle: The lifecycle of a business process involves everything from capturing the process in a computerized representation to automating the process. This typically includes specific steps for measuring, evaluating, and improving the process.
Organizational Maturity: The extent to which an organization has explicitly and consistently deployed practices or processes that are documented, managed, measured, controlled, and continually improved. Organizational process maturity may be measured via a process appraisal. [P-CMM v2.00, July 2001]
Business Objectives: Strategies devised by executive management to ensure an organization’s continued existence and to enhance its profitability, market share, and other factors influencing the organization’s success.
Performance Alignment: The congruence of performance objectives and the consistency of performance results across the individuals, workgroups, units, and organization.
Relationships (Network Of): Includes customers, employees, partners, suppliers, and even investors.
Best Practice: A practice contained in a process area that describes an essential activity to, in part or in whole, accomplish a goal of the process area.