[2] An important early (1776) description of processes was that of economist Adam Smith in his famous example of a pin factory.
Inspired by an article in Diderot's Encyclopédie, Smith described the production of a pin in the following way:[8] One man draws out the wire; another straights it; a third cuts it; a fourth points it; a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on is a peculiar business; to whiten the pins is another ... and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands, though in others the same man will sometimes perform two or three of them.
Following his ideas, the division of labor was adopted widely, while the integration of tasks into a functional, or cross-functional, process was not considered as an alternative option until much later.
[9] American engineer Frederick Winslow Taylor greatly influenced and improved the quality of industrial processes in the early twentieth century.
[3] His methods were widely adopted in the United States, Russia and parts of Europe and led to further developments such as "time and motion study" and visual task optimization techniques, such as Gantt charts.
In the latter part of the twentieth century, management guru Peter Drucker focused much of his work on the simplification and decentralization of processes, which led to the concept of outsourcing.
[10][11] Davenport (1993)[12] defines a (business) process as: a structured, measured set of activities designed to produce a specific output for a particular customer or market.
A process is thus a specific ordering of work activities across time and space, with a beginning and an end, and clearly defined inputs and outputs: a structure for action.
These characteristics are achieved by focusing on the business logic of the process (how work is done) instead of taking a product perspective (what is done).
As we can note, Hammer & Champy have a more transformation-oriented perception and put less emphasis on the structural component – process boundaries and the order of activities in time and space.
Rummler & Brache (1995)[14] use a definition that clearly encompasses a focus on the organization's external customers, when stating that a business process is a series of steps designed to produce a product or service.
Other processes produce products that are invisible to the external customer but essential to the effective management of the business.
In this sense, Rummler and Brache's definition follows Porter's value chain model, which also builds on a division of primary and secondary activities.
Ideally, the transformation that occurs in the process should add value to the input and create an output that is more useful and effective to the recipient either upstream or downstream.
[16] Business process re-engineering (BPR) was originally conceptualized by Hammer and Davenport as a means to improve organizational effectiveness and productivity.
Duhon and the Gartner Group have defined it as "a discipline that promotes an integrated approach to identifying, capturing, evaluating, retrieving, and sharing all of an enterprise's information assets.
These assets may include databases, documents, policies, procedures, and previously un-captured expertise and experience in individual workers.
Six Sigma consists of statistical methods to improve business processes and thus reduce defects in outputs.
The "lean approach" to quality management was introduced by the Toyota Motor Company in the 1990s and focused on customer needs and reducing of wastage.
[2][3][4] The Business Modeling and Integration Domain Task Force (BMI DTF) is a consortium of vendors and user companies that continues to work together to develop standards and specifications to promote collaboration and integration of people, systems, processes and information within and across enterprises.
Social media, websites and smart phones are the newest channels through which organizations reach and support their customers.
[28] Business processes comprise a set of sequential sub-processes or tasks with alternative paths, depending on certain conditions as applicable, performed to achieve a given objective or produce given outputs.
[30] An example of this is the availability of purchase order status reports for supplier delivery follow-up as described in the section on effectiveness above.
With this understanding would hopefully come the willingness to invest time and other resources in business process improvement by introduction of useful and relevant reporting systems.
Introducing a business process concept has a considerable impact on the structural elements of the organization and, thus also on the span of control.