What is a Functional Approach?
Organizations (companies) are complex systems that must somehow be decomposed in order to be manageable. A common way to decompose a company is to divide it hierarchically into functional departments (e.g. sales and production). Such an approach is “functional” (Figure 1).
In the case of a functional approach, a company is actually hierarchically divided into “sub-companies”, each performing a specific function (e.g. sales and production). This offers several benefits, since it divides a big system into smaller systems that are specialized and easier to manage (since they are less complex).
The major drawback of a functional approach is that a company needs to perform as a whole when producing a specific outcome, which means that different functional departments have to communicate and collaborate in an efficient and effective way. However, since each organizational department is usually managed vertically (top-down) responsibilities will be non-transparently divided amongst separate functional units.
Consequently, problems that occur at the interfaces between departments are often given less priority than the short-term goals of the departments. This leads to little or no improvement to the customer, as actions are usually focused on the departmental functions, rather than overall benefit to the organization.
In addition, end customers and their requirements are not always visible to all departments (i.e. sales has contact with customers where production does not).
What is a Process Approach?
In contrast to a functional approach, a process approach does not divide a company ‘top-down’ into a smaller concepts, but defines the ways (i.e. processes) in which particular services or products are developed. This means that a process approach interrelates different organizational functions to produce a specific outcome. Graphically, a process approach is most commonly represented as a horizontal cross-section of organizational functions (Figure 2).
Each organization runs many processes, which are commonly divided into managerial, production and supporting processes. The application of a system of organizational processes together with the identification and interactions of these processes, and their management, can be referred to as a “process approach”.
The processes are managed as a “system”, by creating and understanding a network of processes and their interactions. The consistent operation of this network is commonly referred to as “system approach” to management.
A process approach is a common way of improving the performance of an organization.
What Benefits Does a Process Approach Provide?
A process approach offers several benefits when compared to the traditional, functional approach:
- It focuses on integrating, aligning and linking processes and organizational functions effectively to achieve planned goals and objectives.
- It allows an organization to focus on improving its effectiveness and efficiency by focusing on end-products and customers.
- It enables and facilitates consistent performance through well- defined workflows, which in turn provide assurance to customers about the organization’s quality and capability.
- It promotes the smooth and transparent flow of operations and information within the organization.
- It treats processes as valuable assets and focuses on continual improvement of process execution and process outcomes.
- It contributes to lower costs and shorter cycle times, through continual improvement and the effective use of resources.
- It facilitates the involvement and empowerment of people, the clarification of their responsibilities and minimizes the risk of potential conflicts.
The Role of BPMN in a Process Approach
BPMN plays a central role in a process approach, because it enables us to visually represent business processes in a standardized way. It does this by linking different types of organizational assets into a flow of activities that fulfill a common objective – usually a product or a service for a customer.
Finally, BPMN is executable, meaning that defined business processes can be executed on process engines, enabling the automation organizational processes.
This article explained the term “process approach” and compared it to the more traditional, ‘functional’ approach for organizational management.
Both approaches (functional and process), offer several benefits for organizational management, Whilst a process approach is more customer and product oriented, a functional approach is based on the well-proven principle of “divide and conquer” used to decompose complex systems (i.e. organizations, companies) into simpler ones.
An organization can decide to implement a functional approach, a process approach, or a combination of both.