The Business Book

(Joyce) #1



W H E R E Y O U A R E ,

A M A P W O N ’ T H E L P



usiness processes are a
series of actions taken to
achieve an outcome. The
objective might be to produce a
product, to pay an invoice, or to
serve a customer, for example. Adam
Smith was one of the first people
to describe business processes,
when he dissected the many
manufacturing processes used in
an 18th-century pin factory. From
describing the different actions, he
developed the idea of division of
labor, where work can be divided
into a set of simple tasks performed
by specialized workers, in sequence.

Continuous improvement
The sequence of steps in a process
can often be visualized as a flow
chart. As Watts Humphrey, inventor
of the capability maturity model
(CMM), pointed out, it is always
“good to know where you are” in
the process. Humphrey developed
the idea that continuous process
improvement is based on many
small evolutionary steps, rather than
large, revolutionary innovations.
His CMM provides a framework for
organizing these evolutionary steps
into five levels of development,
each of which prepares the way for
the next. The CMM was developed


Business processes

1899 US engineer and
management consultant Henry
Gantt develops the Gantt chart
to illustrate a project schedule.

1970s Data-flow diagrams are
developed to allow structured
analysis of how data moves
from one process to another.

1979 Philip B. Crosby develops
a quality-management
maturity grid in his book
Quality is Free.

1988 The Capability Maturity
Model (CMM) is described by
Watts S. Humphrey in an
article published in the journal
IEEE Software.

2003 In Business Process
Management is a Team Sport,
Andrew Spanyi claims that
strategy should drive business
process design, which, in
turn, should drive
organizational design.

In level 1 of the Capability
Maturity Model, initial
processes are ad hoc
and poorly controlled.

In level 2, processes start
to be applied to projects
and are repeatable.

In level 3, processes become
defined and can be
proactively implemented.

In level 4, processes are
measurable and can be

By the time level 5 is reached,
processes can be optimized
through careful monitoring.
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