Abstract
The main purpose of the chapter is to represent practical approach on the empirically-evaluated business process orientation (BPO) based on the research of the Slovenian power supply business. Within the empirical investigation, the level of BPO maturity was measured in the 19 organizations. The survey was focused on the top, middle, and lower managers. As a measuring instrument, a questionnaire for the extended concept of process orientation was used. The results of the BPO measurement shows that, despite this long-standing engagement with processes, quality management system and the IT portfolio management (PoM) of operations, process orientation, and appurtenant IT PoM maturity is not very high. Results suggested the opportunities for improvement, particularly for better use and to take advantage of IT. One important reason for performing the research in the power supply business is the importance of its activities for the socio-economic and environmental impact of the whole society and therefore better understanding of the recognized “soft factors.”
TopIntroduction
Owing to constantly changing business requirements and challenges, such as decreasing product life cycles, international competition and increasing cost pressure (e.g. due to the demand to apply latest state-of-the-art technology), companies are forced to improve their processes in order to keep pace with fast-changing market requirements. As a consequence, business process management (BPM) is among the most important managerial topics because it allows companies an agile adaptation to changing business requirements (Neubauer, 2009). Choong’s (2013) literature review indicate that BPM is a holistic management philosophy that uses a systematic approach and information technology (IT) to improve processes that focus on aligning all aspects of an organization with the wants and needs of customers. Ravesteyn and Batenburg (2010) claim, that BPM-systems are the typical result of developments in both the business and IT-domain.
The definition of the business process orientation (BPO) construct has a somewhat intangible nature, which represents a barrier to its conceptualization. Many studies into process management use proxy variables (e.g. ISO 9001 certification) as an indicator for BPO (Kohlbacher & Gruenwald, 2011; Peršič, Markič, & Peršič, 2016; Xiaofen, 2013). BPO is extremely important for the success of business process management (BPM) efforts within organizations. McCormack and Johnson (2001) research results indicate a surprisingly strong relationship between BPO and overall performance (Hammer & Champy 1993 as cited in Reijers, 2006; Sikdar & Payyazhi 2014; Škrinjar, Bosilj-Vukšić, & Indihar-Štemberger, 2008). Since both concepts are closely intertwined, surveys focusing on BPM and BPO are considered in the literature review (Roeser & Kern, 2015; Škrinjar & Trkman, 2013; Nadarajah & Kadir, 2016).
The Neubauer’s (2009) survey showed that only a small number of the participating organizations can be determined as process focused organizations (PFOs) according to the criteria taken from the literature. The vast majority of organizations are still on their way towards a PFO that includes the design of end-to-end business processes and measuring and managing of process level results (Işik, Mertens, & Van den Bergh, 2013). Business processes are the core building blocks of an organization’s operations and provide a plethora of information that can be tapped into. However, today business process analytics is often only the second step of consideration in BPM. Likewise, near real-time insight into processes is rare or almost non-existent in practice (Janiesch, Matzner, & Müller, 2012).
Among the reasons for struggling to evolve and expand BPM practices across the organization are the lack of positive organizational culture (Wilson, 2015), lack of support among senior management, the absence of clear roles and responsibilities (Sikdar & Payyazhi, 2014; Young, Young, & Zapata, 2014) in implementing the BPM methodology, and insufficient budget and available resources.
The majority of academic work on BPM, but also its practical implementation across several industries, is focused on tools, systems and techniques, and less on the managerial, organizational, strategic or cultural challenges of BPM (Adamides, 2015; Gębczyńska, 2016). Because the BPM community is doing this extremely well, to the extent that the ability to eliminate problems within an operational process has become a commodity, as a consequence, massively streamlined processes, rather than highly innovative processes have been encountered (Kohlborn, Mueller, Poeppelbuss, & Roeglinger, 2014).
Key Terms in this Chapter
Business Process Management (BPM): Is a discipline dealing with the management of business processes (BPs) for the achievement of continuous improvement in organizations. BPM refers to a collection of tools and methods for achieving an understanding of and then for managing and improving an organization’s process portfolio.
IT Knowledge: Describes the degree to which the organization understands the capabilities of existing and emerging IT. An awareness of IT ‘possibilities’ exposes the universe of digital options available to the organization, providing the flexibility to quickly adapt to emerging market(s) opportunities.
Business Process Orientation Maturity Model (BPOMM): The McCormack and Johnson’s BPOMM is the most disseminated model based on the number of studies that report on its testing in a business environment and provides a ‘big picture’ overview, composed of small elements, and thus comprehensively explains how to implement the development of a product or a process.
Business Process Orientation (BPO): BPO construct has a somehow intangible nature because the BP is included by BPM, which is further embraced by BPO.
Maturity Model: A maturity model is a conceptual model that consists of a sequence of discrete maturity levels for a class of processes in one or more business domains, and represents an anticipated, desired, or typical evolutionary path for these processes.
IT Infrastructure: IT infrastructure refers to artifacts, tools and resources that contribute to the acquisition, processing, storage, dissemination and use of information. According to this definition, the IT infrastructure includes elements such as hardware, software and employees.
Information Technology (IT) or Information Communication Technology (ICT): Is a generic term fundamentally used to refer to programs, computers and telecommunications.
IT Operations: This concept refers to the IT-related methods, processes and techniques that may be needed if these technologies are to create value. IT operations can be defined as the extent to which the firm uses IT to improve its effectiveness, agility and decision-making.