Overview
Nicholas G. Carr
An earlier version of this chapter appeared as N. Carr (1999), A new way to manage process knowledge, Harvard Business Review, September. © 1999 Harvard Business Review Press.
Reprinted by permission.
The products of an ambitious MIT study could help you reshape your business. For most of the past decade, a team of researchers at the MIT Sloan School of Management has been quietly laboring on a Herculean task: to document, in meticulous detail, every major business process. The Process Handbook project, as the effort is called, has succeeded in creating an electronic repository of information on more than 5,000 processes and activities, together with a suite of sophisticated software programs for navigating and manipulating the data.
Now MIT is making the process repository and software available to companies everywhere by licensing them to start-up firm Phios Corporation. Phios plans to commercialize the research in two ways. First, it will help individual companies develop their own proprietary versions of the repository, providing an easy way to store, organize, and share diverse information such as process maps, procedure manuals, images, software programs, and Web links. Second, it will put the general process repository on the World Wide Web, giving managers access to a wealth of knowledge on process design.
Thomas W. Malone, professor at the Sloan School and cofounder and chairman of Phios, believes that process management tools are becoming increasingly important. ''Electronic commerce, outsourcing, and enterprise software systems are all forcing companies to rethink the way they organize work,''he says. ''Companies need to be more creative and flexible in managing their processes and that requires a much more systematic approach to capturing and disseminating process knowledge.''
One company that's already using the software to manage its process knowledge is Dow Corning. The company found, in the course of installing an SAP system, that it lacked a consistent way to document all its process designs and share that information throughout its organization. It is using the Phios software to create interlinked maps of its key processes, which have proved invaluable in designing and rolling out the new system. The company is also moving ahead with plans to store its process repository on its intranet. Anyone in the company will be able to quickly learn the steps involved in any process, find links to detailed process guidebooks and policy statements, check measures of process performance, and share ideas for improving process designs. (See figure 15.3 for Dow Corning's process repository.)
Much of the power of the Phios process repository lies in its unique two-dimensional
structure, which organizes information according to both process parts and process types. A user exploring the general process of selling a product, for example, can move vertically through the database to gain more detailed information about the process's component parts or subactivities (see figure 15.1).
Figure 15.1: Process parts
Figure 15.2: Process types
Figure 15.3: Dow Corning's process repository. Dow Corning is putting its process repository on its corporate Intranet. Here, in a sample window, we see a portion of Dow's requisition procedure. Employees can click on any process step for more detailed information on policies and practices. The ''process compass'' in the upper left corner makes navigating the repository easy.
The user can also move horizontally to study more specialized types of the process, such as selling over the Internet or selling financial services (figure 15.2). By making it easy for users to move in both directions through the process repository, Phios's software can spur creative thinking about new ways to do work. (To see how the repository works, visit
www.phios.com/hbr.)
One large services company, for example, used the repository to generate fresh ideas for restructuring its hiring processes. The company was growing rapidly in a tightening labor market, and it was having trouble bringing qualified new people on board. So it used the repository to explore the hiring processes of other companies, both inside and outside its industry. When it discovered that Marriott used an automated telephone system to screen job applicants, it realized that it could use a similar process for certain entry-level positions. The company also looked at analogues to the hiring process. In the repository's classification scheme, ''hiring''is a specialized form of the more general process of ''buying.''(Hiring, after all, is the purchase of a person's time.) When exploring different buying processes, the company found a description of General Electric's Internet-based purchasing system, which enables buyers to effciently find and compare different suppliers. The services company realized that a similar electronic clearinghouse might be a productive way of locating and evaluating potential employees. It also considered the possibility of setting up an on-line bidding system for jobs, as electronic auction houses like Onsale have done for products.
The value of well-managed process information will only grow in the future, according to Malone. ''As the boundaries between functions and companies crumble, the old
organizational chart loses its usefulness as a management tool,''he says. ''In tomorrow's companies, executives will likely depend on richly detailed process maps to guide their managerial and strategic decision making.''