Business functions are fundamental processes that allow your business to create products or services for its customers. These core operations allow your company to generate revenue and ensure that the business’s processes are efficient.
You know who you should be rewarding when a particular department within your organization performs at an exceptional level. If a mistake occurs within a clearly defined function, you can easily identify the person accountable. This type of clarity does not exist when the definition of the function is unclear, which can result in accidental overlap and confusion among departments.
It is important to understand the distinction between business processes and business functions to avoid confusion. A process involves tightly related tasks with a goal while a business process encompasses broader tasks that are often interconnected. For instance HR’s business functions could be involved in disciplinary procedures, hiring policies, and training programs.
Developing the right structure for your business processes is dependent on many aspects such as your goals, challenges that have emerged and projects that are in demand. To maximize the value of your business, you should take three steps. It is essential to align your organization with an overall value creation narrative, implement a BU back approach to design functions and identify a corporate function archetype.
It might seem difficult however, focusing on the concept of value creation by using a BU back approach to function development and establishing an archetype for corporate functions will save your business time and frustration. This will not only prevent inadvertent overlap and unnecessary duplication, but also provide your team a clearer idea of what they are doing to contribute to the success of your business.
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