Page 31 -

Business Processes 13

payroll administration. In our brief discussion of processes in this chapter, we
focused on tasks and the functional areas where they are completed. Clearly,
however, it is the people in the functional areas who actually perform the tasks.
Consequently, HCM touches every process in the organization. Moreover, it
is not uncommon for people in different functional areas to complete many
of the tasks in HCM processes. For example, the trigger for recruitment and
hiring is a need for people with the requisite skills to complete process tasks.
Consequently, the functional area in need of new employees will be involved
in this process.

PROJECT MANAGEMENT—PROJECTS
Most business processes are ongoing or repetitive. For example, the lifecycle
data management process spans the life of a product, and the procurement and
fulfi llment processes are repeated frequently. In contrast, a project is temporary
in nature and is typically associated with large, complex activities, such as the
construction of a factory or an aircraft. As we discussed earlier, project manage-
ment refers to the processes a company uses to plan and execute large-scale proj-
ects. It involves the use of tools and techniques for managing complex projects.
Projects can be internal or external depending on the recipient of the
fi nal outcome. For internal projects, such as constructing a plant, project man-
agement is concerned primarily with costs. This is because the outcome of the
project benefi ts the organization and is not sold to a customer. Because no
sales are involved, no revenues are created. In contrast, external projects such
as building an aircraft for a customer generate both costs and revenues.
Projects rely on resources and capabilities available in other processes.
For example, building an aircraft involves purchasing materials (procurement
process), making components from these materials (production), supervising
people (HCM), and so on. External projects are also integrated with selling
to customers (fulfi llment). Figure 1-10 illustrates a simplifi ed project manage-
ment process. The diagram does not identify the specifi c functional areas in
which the work needed to complete the project is performed because this will
vary depending on which other processes are involved.
In the planning phase the scope of the project is defi ned, and the mile-
stones and deadlines are set. The budgeting phase triggers the accounting pro-
cesses to calculate and allocate the resources needed to execute the project.
The project is not executed until management approves the budget. During

Figure 1-10: A project management process

31/01/11 1:03 PM
CH001.indd 13 31/01/11 1:03 PM
CH001.indd 13