Digital transformation for chiefs and owners. Volume 2. Systems thinking. Dzhimsher Chelidze

      SIPOC

      Approach to the description of business processes, which is a tool in lean production. The title reflects the whole essence of the approach, which focuses on five components:

      – Supplier (supplier) – person or company that supply resources for the execution of the business process (production, money, materials, data);

      – Input (input) – resources for business process: materials, money, production capacity, data);

      – Process (process) – all those tasks that allow the result of the work to convert the raw material into the final product;

      – Output (output) – products of business process activity;

      – Customer (customer) – recipients of services, those who use the product of the business process.

      The SIPOC business process is described from the end:

      – Identify the customer of the business process;

      – Describe the final product (output) that the customer needs;

      – Highlight 5—7 key business process operations;

      – Identify the necessary resources (input) for the business process;

      – Identify the providers of these resources

      The key advantage is the speed of description, the ability to identify unnecessary steps that do not create value. This approach is somewhat similar to VAD and is a top-level description. Allows to identify the most obvious losses.

      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

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