Implementing an intelligent enterprise usually begins with a few core processes (e.g., customer management, distribution management, etc.), encompasses transactional processes (sales, procurement, accounts payable), and eventually includes unique and distinguishing business capabilities.
Building an intelligent enterprise doesn’t focus only on competitively distinctive capabilities—it also requires rationalizing and digitizing the mundane, everyday processes that a company has to get right to stay in business.
To build an intelligent enterprise, it’s essential to understand the relationship between Business capability and relevant Business Processes.
A capability is defined as “an ability to do something.”
According to Ulrich Homann: “A business capability is a particular ability or capacity that a business may possess or exchange to achieve a specific purpose or outcome.”
It defines what a business does without explaining how, why, or where the company uses the capability.
Business capabilities are grouped using stratification (e.g. Strategic, Core, Support). Each stratification tier provides a different perspective or focal point.
Figure 1 - Example Level 1 Business Capability Model
Business capabilities can also be grouped using leveling. Leveling is the process of decomposing each top-level (Level 1) business capability into lower levels (typically not more than three) to communicate more detail at a level appropriate for heat mapping and roadmap planning.
A business process is a series of steps performed by stakeholders using information and technology to achieve business outcomes. Business Process defines “how do we do?”. How well these processes are standardized, integrated and executed will define the enterprises’ excellence in delivering the outcomes.
Processes are dynamic and continuously evolve based on changes in technology innovations and organizational changes.
Figure 2 - Elements of Business Process
There are three components of a business process:
1. People
2. Process steps / Activities
3. Solution Capabilities
3.1 Information
3.2 Technology
Notes on types of Business processes:
There are three pillars of implementing intelligent enterprise.
The following represents a typical ‘Source to Pay” process in traditional ERP
Process maturity scale = 2 Legacy systems are used for transactions with limited automation. No automated integration with suppliers
Figure 3 -Business Process elements in traditional ERP
“Source to Pay” business process is enhanced by implementing business networks, process automation and advanced analytics tools. This will result in a better outcome for the business capability “Procurement management.”
Process maturity scale = 5 End-to-end integrations with suppliers. Leverage predictive analytics and process automation to improve decision-making and efficiency
Figure 4 - Business Process elements in intelligent ERP
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