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Enterprise Modelling and Process Orientation

In addition to developments in software architecture, business administration also contributed to the rise of business process management. There were two major factors that fuelled workflow management and business process management. Value chains as a means to functionally break down the activities a company performs and to analyze their contribution to the commercial success of the company, and process orientation as the way to organize the activities of enterprises.

Value Chains

Value chains are a well-known approach in business administration to organize the work that a company conducts to achieve its business goals. Value chains were developed by Michael Porter to organize high-level business functions and to relate them to each other, providing an understanding of how a company operates.

Advantage

Porter states that “the configuration of each activity embodies the way that activity is performed, including the types of human and physical assets employed and the associated organizational arrangements” and he continues to look at the enterprise and its ecology by stating that “gaining and sustaining competitive advantage depends on understanding not only a firm’s value chain but how the firm fits in the overall value system.”

Business goal

In order to fulfill their business goals, companies cooperate with each other, that is, the value chains of these companies are related to each other. The ecology of the value chains of cooperating enterprises is called value system. Each value system consists of a number of value chains, each of which is associated with one enterprise.

Concluding remark

The value chain of a company has a rich internal structure, which is represented by a set of coarse-grained business functions. These high-level business functions, for instance, order management and human resources, can be broken down into smaller functional units, spanning a hierarchical structure of business functions of different granularity.

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