Article 2: Understand Your Corporate Strategy & Your Business Processes
Understand Your Corporate Strategy
In order to better understand your corporate strategy – and how you can map the usage of SharePoint to that strategy, you need a basic understanding of the Value Chain. The Value Chain was first described and popularized by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.
Dr. Porter states every company has a Value Chain – how you create and sustain value as a company. Every firm is a collection of activities that are performed to design, produce, market, deliver and support its product. All these activities can be represented using a value chain (pictured below).
A firm’s value chain and the way it performs individual activities are a reflection of its history, its strategy, its approach to implementing its strategy, and the underlying economics of the activities themselves. The value chain is the basic tool for diagnosing competitive advantage and finding ways to enhance it.1
The corporate strategy is a very high level message, usually communicated to employees via a few key priorities, such as:
- Grow the Business 35% in the next 5 years
- Differentiate our Products & Services from our Competitors
- Achieve Best in Class Customer Service
- Lean our Business Processes
Executives in charge of each major department in the company have more detailed goals that would map to the 4 example points above. The value chain is a tool that can be used to better understand the business processes that are performed to support the corporate strategy.
These business processes are what we map the usage of SharePoint to. Why? You must be able to show how the usage of SharePoint is helping to support the corporate strategy – and how it is adding value to the company and eventually your customers. If you can not provide this information to your bosses – why should they invest in the technology?
Understand the Business Processes the Company Performs
Philip Kotler and Kevin Lane Keller expand on the concept of the Value Chain in their business text book, Marketing Management 12e. The Value Chain shows the firms’ success depends not only on how well each department performs it work, but also on how well the various departmental activities are coordinated to conduct core business processes.
Strong companies develop superior capabilities in managing and linking their core business processes. Strong companies are also reengineering the work flows and building cross-functional teams responsible for each process. Winning companies are those that excel at managing core business processes through cross-functional teams. 2
Coordinating department activities, and better managing core business processes through cross-functional teams speaks directly to collaboration. Collaboration can be defined as a way to improve the productivity of people and teams and accelerate the flow of information throughout the company.3
Accelerating the flow of information via your processes is where SharePoint can add a lot of value to your company.
- SharePoint provides a platform to help manage and link core business processes by enabling cross-functional teams to collaborate in an efficient manner.
- SharePoint provides a tool to empower business users with a way to quickly improve core business processes.
- SharePoint is unique in that it enables business users to create their own solutions and control their own permission & access models without having to rely upon IT.
- In addition, SharePoint is a web-based platform, so end users simply need a web browser to interact with it.
The 5 Core Business Processes
The Value Chain identifies 5 core business activities that involve the work of cross-functional teams:
- The market sensing process. All the activities involved in gathering market intelligence, disseminating it within the organization, and acting on the information.
- The new offering realization process. All the activities involved in researching, developing, and launching new high-quality offerings quickly and within budget.
- The customer acquisition process. All the activities involved in defining target markets and prospecting for new customers.
- The customer relationship management process. All the activities involved in building deeper understanding, relationships, and offerings to individual customers.
- The fulfillment management process. All the activities involved in receiving and approving orders, shipping the goods on time, and collecting payment.
In addition to the 5 cross-functional core processes, the value chain identifies nine strategically relevant activities that create value and cost in a specific business. These nine value-creating activities consist of five primary activities and four support activities.
The primary and support activities are the department specific business processes your company performs on a daily basis. The people within the specific departments will know the most important processes they perform on a daily basis – and these are the processes that you will create a process map of.
The Value Chain provides the tool for you to get a better understanding of the general business processes a company must perform to deliver value to its customers. With this basic understanding, you should have the ability to think about your company from a wider perspective – which is where SharePoint can play a critical role.
Looking at your business from a wider view will enable you to identify areas where SharePoint can help support the corporate strategy and add value by improving cross-functional processes through improved collaboration and visibility.
In our next article, we will walk through creating a process map.
- Michael E. Porter, Competitive Advantage: Creating and Sustaining Superior Performance (New York:The Free Press, 1985)
- Philip Kotler and Kevin Lane Keller, Marketing Management 12e (New Jersey:Pearson Prentice Hall, 2006)
- Josh Bernoff and Ted Schadler, Empowered: Unleash Your Employees, Energize Your Customers, and Transform Your Business (Harvard Business Press, 2010