Business Process Orientation - The Definition of BPO

The Definition of BPO

To establish a more solid foundation, I would like to propose a definition and an approach to measuring BPO. The BPO concept has sufficient practitioners and researchers and has been implemented in enough companies that we now have the information we need to develop a testable statistical model. The trick, of course, is getting at that broad range of experience and boiling it down in scientifically acceptable ways to a point where practitioners can use it easily in the field.

Our approach to building this foundation began with an extensive literature review, interviews with experts both in the U.S. and Europe and testing with experienced practitioners and experts to determine the key definition and variables within BPO. Using various statistical techniques (domain sampling, coefficient alpha testing, and factor analysis), we both determined the validity of various BPO variables and condensed those variables into a simpler composite list (survey instrument) that offered easy use in measuring BPO within an organization (McCormack 1999).

Our research found that the practitioners and experts said a Business Process Oriented Organization comes down to this:

"An organization that emphasizes process as opposed to hierarchies, a process oriented way of thinking, outcomes and customers."

We also found that BPO also breaks into three elements:

• Process Management and Measurement – measures that include aspects of the process like output quality, cycle time, process cost and variability compared to the traditional accounting measures.
• Process Jobs – "product development process owner" rather than "research manager".
• Process View – thorough documentation from top to bottom and beginning to end of a process.

Recent research extends the elements of McCormack (1999) and concludes that the concept of BPO consists of the following components :

• Design and documentation of business processes
• Management commitment towards process orientation
• Process ownership (see process owner)
• Process performance measurement
• Corporate culture in line with the process approach
• Application of continuous process improvement methodologies (see continuous improvement process or business process improvement), and
• Pocess-oriented organizational structure.