| An enterprise's infrastructure consists of a set of | | | | subdivides into research and development, and sales |
| processes, functions, facilities, and equipment. | | | | and production micro processes. |
| In order for the enterprise to create the most value, | | | | Macro processes cross functions and decompose into |
| the infrastructure must be "well architected." "Well | | | | micro processes within functions. These terms are |
| architected" means that there is no unnecessary | | | | relative because a micro process at the enterprise |
| duplication or redundancy of assets or effort, and | | | | level, is a macro process at the function level. |
| that the activities fit together systematically. | | | | Because functions decompose into subfunctions, |
| Architecting the infrastructure | | | | there are "ladders" of macro and micro processes |
| Architecting the infrastructure begins by developing | | | | from the top of the enterprise down to the simplest |
| the "enterprise process model." This model describes | | | | activities on the "floor." |
| the highest level activities within the enterprise that | | | | The terms "macro" and "micro" are common in |
| deliver value to either external or internal customers, | | | | engineering-related industries, such as information |
| or both. If an activity does not deliver value, then it | | | | technology and manufacturing. For example, Microsoft |
| is not part of the enterprise process model. | | | | Corporation began as a developer of software for |
| The "value chain" is the set of all activities that earn | | | | microprocessors, when mainframe computers were |
| and add value to materials and supplies, resulting in | | | | considered to be macroprocessors. Microchip |
| finished products and/or services. A finished product | | | | Technology, Inc. is a manufacturer of small electronic |
| and/or service from one enterprise, may be raw | | | | controllers used in cars and electronic devices. |
| material or supplies, or a subassembly to another. | | | | For example, the sales macro process embraces |
| Management must ensure that not only do processes | | | | everything that is required to deliver a product to a |
| in the chain add value, but that they do so in an | | | | customer, including the supporting services. The sales |
| effective and efficient manner, thus increasing the | | | | macro process crosses three functions: marketing, |
| value earned. | | | | sales, and service. However, each function has its |
| A process is the intersection of people and products | | | | own set of distinct micro processes. The micro |
| and/or services. The people include external and | | | | processes within the sales function itself are just one |
| internal suppliers who provide the inputs, the | | | | set in the entire sales macro process because the |
| employees who execute the procedures, and internal | | | | marketing and service functions are also heavily |
| and external customers to whom the resulting | | | | involved. |
| outputs are delivered. In effect, the employees apply | | | | For example, the marketing function deploys |
| their knowledge and skills to the procedures to the | | | | processes to create awareness of products and/or |
| benefit of the customers. Management must ensure | | | | services, whereas the sales function deploys |
| that the "tribal knowledge" in the heads of the | | | | processes to close a transaction with a customer. |
| employees of how the processes really work is | | | | Although micro processes to the enterprise, the |
| adequately documented, or else they can be held | | | | macro processes within the marketing function |
| hostage. | | | | include promotion, pricing, packaging, and placement, |
| The more tightly coupled the processes are in the | | | | and are very important to generating business that |
| value chain, the more sustainable the enterprise will | | | | can ultimately be closed by people in the sales |
| be, provided that changes in strategy can be | | | | function. |
| accommodated. | | | | For example, the production macro process |
| As changes in strategy cause market entrances and | | | | embraces everything that is required to transform |
| exits, product and/or service introductions and | | | | raw materials into finished products. The inputs are |
| withdrawals, and organizational changes over time, | | | | raw materials and supplies; the outputs are either |
| the infrastructure becomes unarchitected. If so, value | | | | end-products, or subassemblies, which become inputs |
| leaks and performance degrades, and consequently | | | | to further processes "downstream." |
| the infrastructure has to be reengineered. | | | | The production macro process crosses three |
| Changes in strategy may require an infrastructure | | | | functions: procurement, manufacturing, and |
| upgrade or replacement, as is common when new | | | | distribution. Although micro processes to the |
| systems are implemented. | | | | enterprise, the macro processes within the |
| Successful franchise business system operators are | | | | manufacturing function include fabrication, assembly, |
| grand masters at designing architected | | | | and packaging. The fabrication macro process |
| infrastructures. The tightness of the infrastructure is | | | | decomposes into cutting, molding, machining, and |
| a distinguishing factor from "mom and pop" | | | | welding micro processes. |
| enterprises, especially in the fast food industry. | | | | Process mapping |
| In fast food franchises, the branding blends with the | | | | Without an overall map, it is very easy for the |
| service delivery. There is a tight fit between the | | | | processes to become fragmented and fit together |
| menu items offered and the equipment used to | | | | haphazardly, especially when changes are made on an |
| prepare them. There is no redundant equipment, and | | | | "ad-hoc" basis to accommodate short-term needs |
| only items that can be prepared using the installed | | | | and "quick fixes." |
| equipment can be offered for sale. Facilities design is | | | | To architect the infrastructure effectively and |
| standardized, not just for effectiveness and | | | | efficiently, the processes in the value chain should be |
| efficiency, but also to make the experience easier | | | | mapped periodically to determine where there are |
| for employees, customers, and suppliers. | | | | opportunities to improve workflows, or to eliminate |
| For example, in a hypothetical fast food | | | | duplication and redundancy altogether. |
| establishment, fries are on the left and shakes are on | | | | "Reengineering" is the process of improving the |
| the right. However, only chocolate and vanilla shakes | | | | effectiveness and efficiency of infrastructure, and |
| are offered, because there is no equipment to | | | | transforming it from unarchitected to architected. |
| prepare fruit. | | | | When architecting an infrastructure, processes should |
| From macro to micro | | | | be designed so that their results are predictable and |
| An enterprise has tens, if not hundreds, if not | | | | measurable, and are trainable and repeatable. Where |
| thousands of processes. The "enterprise process | | | | possible, closed systems should be developed where |
| model" represents the highest level "macro" | | | | feedback loops enable actual results to be compared |
| processes. | | | | to planned. |
| The model starts with just three macro processes: | | | | Architecting infrastructures is an enterpriship |
| planning and policy development, deployment, and | | | | (entrepreneurship, leadership, and management) |
| performance measurement. The deployment process | | | | competency that is essential to earning value. |