Process Classification FrameworkDeveloped ByAPQC’s International Benchmarking ClearinghouseIn Partnership WithArthur Andersen & Co., SCProcess Classification Framework: OverviewThe Process Classification Framework has been developed over the past three years by the APQC International Benchmarking Clearinghouse, with the assistance of several major international corporations, and in close partnership with Arthur Andersen &Co.The intent has been to create a high-level, generic enterprise model that will encourage businesses and other organizations to see their activities from a cross-industry process viewpoint instead of a narrow functional viewpoint. Many organizations now have used the Process Classification Framework in practical ways to better understand their processes, to reach out across industry boundaries to communicate and share information, and to classify information in various forms.About the FrameworkP U R P O S EThe Process Classification Framework serves as a high-level, generic enterprise model that encourages businesses and other organizations to see their activities from a cross-industry process viewpoint instead of from a narrow functional viewpoint.All too often, organizations become bogged down by the fear of making mistakes in “apples to oranges” benchmark compar-isons. Convinced that they have unique characteristics and constraints, they have difficulty understanding how to com-pare their processes meaningfully to those of other, different organizations.However, experience shows that the potential of benchmarking to drive dramatic improvement often lies squarely in making “out of the box” comparisons and a search for insights not found within typical intra-industry paradigms.How can organizations communicate effectively across indus-try boundaries and overcome the vocabularies that obscure the underlying commonality of their business processes?The Process Classification Framework supplies a generic view of business processes often found in multiple industries and sectors—manufacturing and service, healthcare, government, education, and others.Additionally, many organizations now seek to understand their inner workings from a horizontal process viewpoint, rather than from a vertical functional viewpoint. How can they, for example, differentiate the sales process from the existing sales department?The Process Classification Framework seeks to represent major processes and subprocesses, not functions, through its struc-ture and vocabulary. The Framework does not list all processes within any specific organization. Likewise, not every process listed in the Framework is present in every organization.H I S T O R YThe Process Classification Framework was originally envisioned as a “taxonomy” of business processes during the 1991 design of the American Productivity & Quality Center’s International Benchmarking Clearinghouse.That design process involved more than 80 organizations with a strong interest in advancing the use of benchmarking in the U.S. and around the world. A primary issue was, and continues to be, how to nurture and enable process benchmarking across industry boundaries.The founding members of the Clearinghouse were convinced that a common vocabulary, not tied to any specific industry, was necessary to classify information by process and to help companies transcend the limitations of “insider” terminology.A small team, representing both industry and APQC, held the initial design meetings in early 1992. APQC published the first version of the Framework later that year.C O L L A B O R A T I O NAPQC and Arthur Andersen & Co. have collaborated closely to bring the Process Classification Framework to life and enhance it over the past three years. The Center would like to acknowl-edge the staff of Arthur Andersen for their research and numer-ous insights during this effort.Many other Clearinghouse member companies from diverse industries have also contributed to the ongoing development of the Framework.L O O K I N G F O R W A R DContinuing dialogue with Clearinghouse members has shown that the Processes Classification Framework can be a useful tool in understanding and mapping business processes. In par-ticular, a number of organizations have used the Framework to classify both internal and external information for the purpose of cross-functional and cross-divisional communication. The Process Classification Framework is an evolving docu-ment. The Center will continue to enhance and improve it on a regular basis. T o that end, we welcome your comments, sug-gestions for improvement, and any insights you gain from applying it within your organization.Additionally, other process models exist in various forms; these models might enhance the effectiveness of the Framework. We would like to learn from anyone with such information to share.R I G H T S A N D P E R M I S S I O N S© Copyright by the American Productivity & Quality Center. All rights reserved.APQC would like to see the Process Classification Framework receive wide distribution, discussion, and use. Therefore, it grants permission for copying the Framework, as long as acknowledgement is made to the American Productivity & Quality Center. Please notify and inform APQC concerning your use or application.Please direct your comments, suggestions, and questions to: APQC International Benchmarking ClearinghouseInformation Services Dept.123 North Post Oak Lane, 3rd FloorHouston, Texas 77024-7797713-681-4020 (phone)713-681-8578 (fax)Internet: apqcinfo@For updates, visit our Web site at Process Classification Framework1.UNDERSTAND MARKETS AND CUSTOMERS1.1 Determine customer needs and wants1.1.1Conduct qualitative assessments1.1.1.1 Conduct customer interviews1.1.1.2 Conduct focus groups1.1.2Conduct quantitative assessments1.1.2.1 Develop and implement surveys1.1.3Predict customer purchasing behavior1.2 Measure customer satisfaction1.2.1Monitor satisfaction with products and services1.2.2Monitor satisfaction with complaint resolution1.2.3Monitor satisfaction with communication1.3 Monitor changes in market or customer expectations1.3.1Determine weaknesses of product/service offerings1.3.2Identify new innovations that meet customer needs1.3.3Determine customer reactions to competitive offerings2.DEVELOP VISION AND STRATEGY2.1 Monitor the external environment2.1.1Analyze and understand competition2.1.2Identify economic trends2.1.3Identify political and regulatory issues2.1.4Assess new technology innovations2.1.5Understand demographics2.1.6Identify social and cultural changes2.1.7Understand ecological concerns2.2 Define the business concept and organizational strategy2.2.1Select relevant markets2.2.2Develop long-term vision2.2.3Formulate business unit strategy2.2.4Develop overall mission statement2.3 Design the organizational structure and relationships betweenorganizational units2.4 Develop and set organizational goals3.DESIGN PRODUCTS AND SERVICES3.1 Develop new product/service concept and plans3.1.1T ranslate customer wants and needs into product and/orservice requirements3.1.2Plan and deploy quality targets3.1.3Plan and deploy cost targets3.1.4Develop product life cycle and development timing targets3.1.5Develop and integrate leading technology into prod-uct/service concept3.2 Design, build, and evaluate prototype products and services3.2.1Develop product/service specifications3.2.2Conduct concurrent engineering3.2.3Implement value engineering3.2.4Document design specifications3.2.5Develop prototypes3.2.6Apply for patents3.3 Refine existing products/services3.3.1Develop product/service enhancements3.3.2Eliminate quality/reliability problems3.3.3Eliminate outdated products/services3.4 T est effectiveness of new or revised products or services3.5 Prepare for production3.5.1Develop and test prototype production process3.5.2Design and obtain necessary materials and equipment3.5.3Install and verify process or methodology3.6 Manage the product/service development process4.MARKET AND SELL4.1 Market products or services to relevant customer segments4.1.1Develop pricing strategy4.1.2Develop advertising strategy4.1.3Develop marketing messages to communicate benefits4.1.4Estimate advertising resource and capital requirements4.1.5Identify specific target customers and their needs4.1.6Develop sales forecast4.1.7Sell products and services4.1.8Negotiate terms4.2 Process customer orders4.2.1Accept orders from customers4.2.2Enter orders into production and delivery process5.PRODUCE AND DELIVER FOR MANUFACTURING-ORIENTED ORGANIZATIONS5.1 Plan for and acquire necessary resources5.1.1Select and certify suppliers5.1.2Purchase capital goods5.1.3Purchase materials and supplies5.1.4Acquire appropriate technology5.2 Convert resources or inputs into products5.2.1Develop and adjust production delivery process(for existing process)5.2.2Schedule production5.2.3Move materials and resources5.2.4Make product5.2.5Package product5.2.6Warehouse or store product5.2.7Stage products for delivery5.3 Deliver products5.3.1Arrange product shipment5.3.2Deliver products to customers5.3.3Install product5.3.4Confirm specific service requirements for individualcustomers5.3.5Identify and schedule resources to meet servicerequirements5.3.6Provide the service to specific customers5.4 Manage production and delivery process5.4.1Document and monitor order status5.4.2Manage inventories5.4.3Ensure product quality5.4.4Schedule and perform maintenance5.4.5Monitor environmental constraints6. PRODUCE AND DELIVER FOR SERVICE-ORIENTEDORGANIZATIONS6.1 Plan for and acquire necessary resources6.1.1Select and certify suppliers6.1.2Purchase materials and supplies6.1.3Acquire appropriate technology6.2 Develop human resource skills6.2.1Define skill requirements6.2.2Identify and implement training6.2.3Monitor and manage skill development6.3 Deliver service to the customer6.3.1Confirm specific service requirements for individualcustomer6.3.2Identify and schedule resources to meet servicerequirements6.3.3Provide the service to specific customers6.4 Ensure quality of service7.INVOICE AND SERVICE CUSTOMERS7.1 Bill the customer7.1.1Develop, deliver, and maintain customer billing7.1.2Invoice the customer7.1.3Respond to billing inquiries7.2 Provide after-sales service7.2.1Provide post-sales service7.2.2Handle warranties and claims7.3 Respond to customer inquiries7.3.1Respond to information requests7.3.2Manage customer complaints8.DEVELOP AND MANAGE HUMAN RESOURCES8.1 Create and manage human resource strategies8.1.1Identify organizational strategic demands8.1.2Determine human resource costs8.1.3Define human resource requirements8.1.4Define human resource’s organizational role8.2 Cascade strategy to work level8.2.1Analyze, design, or redesign work8.2.2Define and align work outputs and metrics8.2.3Define work competencies8.3 Manage deployment of personnel8.3.1Plan and forecast workforce requirements8.3.2Develop succession and career plans8.3.3Recruit, select and hire employees8.3.4Create and deploy teams8.3.5Relocate employees8.3.6Restructure and rightsize workforce8.3.7Manage employee retirement8.3.8Provide outplacement support8.4 Develop and train employees8.4.1Align employee and organization development needs8.4.2Develop and manage training programs8.4.3Develop and manage employee orientation programs8.4.4Develop functional/process competencies8.4.5Develop management/leadership competencies8.4.6Develop team competencies8.5 Manage employee performance, reward and recognition8.5.1Define performance measures8.5.2Develop performance management approaches/feedback8.5.3Manage team performance8.5.4Evaluate work for market value and internal equity8.5.5Develop and manage base and variable compensation8.5.6Manage reward and recognition programs 8.6 Ensure employee well-being and satisfaction8.6.1Manage employee satisfaction8.6.2Develop work and family support systems8.6.3Manage and administer employee benefits8.6.4Manage workplace health and safety8.6.5Manage internal communications8.6.6Manage and support workforce diversity8.7 Ensure employee involvement8.8 Manage labor-management relationships8.8.1Manage collective bargaining process8.8.2Manage labor-management partnerships8.9 Develop Human Resource Information Systems (HRIS)9.MANAGE INFORMATION RESOURCES9.1 Plan for information resource management9.1.1Derive requirements from business strategies9.1.2Define enterprise system architectures9.1.3Plan and forecast information technologies/methodologies9.1.4Establish enterprise data standards9.1.5Establish quality standards and controls9.2 Develop and deploy enterprise support systems9.2.1Conduct specific needs assessments9.2.2Select information technologies9.2.3Define data life cycles9.2.4Develop enterprise support systems9.2.5Test, evaluate, and deploy enterprise support systems 9.3 Implement systems security and controls9.3.1Establish systems security strategies and levels9.3.2Test, evaluate, and deploy systems security and controls 9.4 Manage information storage & retrieval9.4.1Establish information repositories (data bases)9.4.2Acquire & collect information9.4.3Store information9.4.4Modify and update information9.4.5Enable retrieval of information9.4.6Delete information9.5 Manage facilities and network operations9.5.1Manage centralized facilities9.5.2Manage distributed facilities9.5.3Manage network operations9.6 Manage information services9.6.1Manage libraries and information centers9.6.2Manage business records and documents9.7 Facilitate information sharing and communication9.7.1Manage external communications systems9.7.2Manage internal communications systems9.7.3Prepare and distribute publications9.8 Evaluate and audit information quality10.MANAGE FINANCIAL AND PHYSICAL RESOURCES 10.1 Manage financial resources10.1.1Develop budgets10.1.2Manage resource allocation10.1.3Design capital structure10.1.4Manage cash flow10.1.5Manage financial risk10.2 Process finance and accounting transactions10.2.1Process accounts payable10.2.2Process payroll10.2.3Process accounts receivable, credit, and collections10.2.4Close the books10.2.5Process benefits and retiree information10.2.6Manage travel and entertainment expenses10.3 Report information10.3.1Provide external financial information10.3.2Provide internal financial information10.4 Conduct internal audits10.5 Manage the tax function10.5.1Ensure tax compliance10.5.2Plan tax strategy10.5.3Employ effective technology10.5.4Manage tax controversies10.5.5Communicate tax issues to management10.5.6Manage tax administration10.6 Manage physical resources10.6.1Manage capital planning10.6.2Acquire and redeploy fixed assets10.6.3Manage facilities10.6.4Manage physical risk 11.EXECUTE ENVIRONMENTAL MANAGEMENTPROGRAM11.1 Formulate environmental management strategy11.2 Ensure compliance with regulations11.3 T rain and educate employees11.4 Implement pollution prevention program11.5 Manage remediation efforts11.6 Implement emergency response programs11.7 Manage government agency and public relations11.8 Manage acquisition/divestiture environmental issues11.9 Develop and manage environmental information system11.10 Monitor environmental management program12.MANAGE EXTERNAL RELATIONSHIPS12.1 Communicate with shareholders12.2 Manage government relationships12.3 Build lender relationships12.4 Develop public relations program12.5 Interface with board of directors12.6 Develop community relations12.7 Manage legal and ethical issues13.MANAGE IMPROVEMENT AND CHANGE13.1 Measure organizational performance13.1.1Create measurement systems13.1.2Measure product and service quality13.1.3Measure cost of quality13.1.4Measure costs13.1.5Measure cycle time13.1.6Measure productivity13.2 Conduct quality assessments13.2.1Conduct quality assessments based on external criteria13.2.2Conduct quality assessments based on internal criteria 13.3 Benchmark performance13.3.1Develop benchmarking capabilities13.3.2Conduct process benchmarking13.3.3Conduct competitive benchmarking13.4 Improve processes and systems13.4.1Create commitment for improvement13.4.2Implement continuous process improvement13.4.3Reengineer business processes and systems13.4.4Manage transition to change13.5 Implement TQM13.5.1Create commitment for TQM13.5.2Design and implement TQM systems13.5.3Manage TQM life cycle。