Business Process and Operational Tasks - Essay Example

(www.wikipedia.com/business_process) s that "Business Process is a series of inter-related tasks that gives the final product in the form of good or service. That is after all of these tasks have been completed you get the final product. These inter-related tasks can be further divided into three broad categories: Management tasks are the first category tasks. These tasks design, decide and control the other tasks to achieve the final product. It involves the day to day management of controlling workers or it can be a strategic task of making long term goals. The second category is of Operational Tasks. These steps are the primary steps that start the process of physical manufacturing of good or starting a service. It involves purchasing of raw material, advertising etc. Then there are supporting tasks. These tasks support the manufacturing of the final product and help to establish accountability of the operation tasks to the management. It involves accounting, recruitment of labor which will use its mental and physical effort to produce the goods and services".1 An example of Process can be taken from the following paragraph: Richard L. Daft in his book "Management" 4th Edition defines a business process, when pentagon moves thousand of tons of humanitarian aid; it needs hundreds of approvals from the government. It has to first prepare the list of things needed to be sent. It then estimates the cost of these things. Then it has to identify the source of funding for this process i-e Where are they going to get the money to pay for this aid , either it is going to be through a government grant or through some private charity'. After this has been decided again needs the approval from the government. And if it's a government grant it has to wait till they get the required budget. Then after getting the budget they again need to have approving official's signature. Then they have to wait till finance office sends the cheque or Bank Draft. Then have to pay the travel expenses to the departments responsible for traveling such as US Air Force. The traveling group has to make traveling arrangements and obtain travel advance i-e advance money. Then they have to obtain the traveling tickets from the concerned department. And after these thirteen cumbersome steps only, the concerned people can travel and send the humanitarian aid. These steps in the flow-chart form are shown below: Fig 1a: The figure shows the number of processes Pentagon has to go through before the final action is taken. Source: Richard L Daft "Management" Fourth Edition p.355 published by The Dryden Press. 2As already discussed all these steps were cumbersome and there was a lot of red-tape involved the entire process take too much, As a result that aids value to the recipient was less than if it was achieved immediately. For example suppose after the Tsunami, Pentagon decided to send aid to those who lost their homes in the disaster. If the above process is being followed, it will take atleast a week for this aid to reach the people. The value of this aid for the consumer would now be less or in other words it would not be as important as if it would have been received the next day. The reason behind this loss of value for the recipients is that by the time they would have gotten the aid from the neighboring countries. They would have been able to console themselves as time is the best healer and due to diminishing marginal utility. That is if you have something then another unit of the same thing gives you less satisfaction. After Tsunamis victims received the aid from neighboring countries then the Pentagon's aid will not give these people the same utility or same value as before. Same happens with the consumer, the more time businesses take to satisfy there needs and wants the less value that thing (product or service) gives to the consumers. This is because the consumer demands are ever changing. If they demand something and if a business takes too much time in producing that thing, then by the time the business produces that thing consumers might be asking for something else. If business takes too much time it might be dangerous, as there's always a danger of competitors presenting that thing before to the consumers and the business would lose competitive advantage. As now consumers might not shift to the business's product because of two reasons. They have already consumed the product (competitors) and more consumption might lead to diminishing marginal utility. As it was the case with XBOX 360 and PS3. Since XBOX 360 was released first most of the consumers bought it and didn't wait for Sony to come up with PS3. Now when PS3 was released the demand for the product was low and the product failed despite being good. The reason was that consumers already had XBOX and they didn't want to waste their money on a very close substitute. PS3 could not lure the consumers into buying because prices were higher than what the value it was giving to the consumers, this value was very low because most of them XBOX 360. The new concept that has been evolved is Business Process re-engineering which focuses on reducing the time between when the product is demanded and when it is given out to consumer. This can be done by reducing the number of processes that a business usually takes before the final action or production takes place. For e-g in our above pentagon example there were thirteen cumbersome processes before the final action is taken as a result the process was taking too much time and the value of the aid it was giving was less to the recipients. As a result a task force was established to re-engineer the process and the new process had only four steps rather than thirteen. The new process eliminated red-tape approval and few approval were needed after which advance for travel was given. The new process was like this: Fig 1b: The figure shows the re-engineered process which is quicker. Source: Richard L Daft "Management" Fourth Edition p.355 published by The Dryden Press. The process was simpler and much shorter and aid had more value now since the gap between the need for aid and the aid given is shortened. As we have already established the more time business process takes and the later the product reaches the consumer the less value it has as establish in the XBOX PS3 discussion. Therefore businesses usually focus on reducing or shortening the business process so that the product they are producing has more value and so they could command a higher price. Rational consumers only buy the good when the value which they are getting from the product is higher or equal to the price. So, the higher valued product can be sold at higher price. Businesses usually take various steps to reduce the business process and to lessen the time between demand and production. Some of the steps that they take are: By creating a taskforce and giving them the specific task of solving problems and producing the product swiftly. In other words, task forces are set up to avoid wastages and eliminate hindrances in production. For e.g. F.W Taylor established a team to count out how quickly a product can be produced and based on this estimate, bonuses were dispatched to employees if they produced the product in the required time. Daft (1997, p.357) states "another way can be by employing integrating manager that coordinate the workings of various departments to complete specific projects on time. For e.g. P&G employs production manager to each production line and given specific targets to achieve. It is his job how he coordinates the working of all department to achieve his targets." Daft (1997, p.358) states "a way of reducing the gap between demand and production to increase value of product for the consumer is by being a loose organization. This involves organizing work in projects. After organizing the work in projects, tell the groups to complete the specific projects within a given time period. Now, they can complete the project as they want to. They do not have to go by thumb rule and can complete these projects by new innovative method". Thus we can conclude in the end, that you can give maximum value to the consumer if you produce a product quickly i-e there's a short time period involved between when they demand a product and when a product is in their hands. This involves looking ahead and planning ahead of time. This can be done by extensive market research and producing products as soon as demanded by consumers. This can also be done by using the techniques used above. Thus, the more value your product has for the consumer, the higher price your company will be to command. Higher price will mean higher profit. So, the choice is yours either lengthen your business process and go out of business or shorten your business process and thrive. References List Wikipedia.com/business_process Daft, Richard L., 1997, Management, 4th Ed, The Dryden press, London. Read More