Building a Process-Based Organization: The Design Roadmap at Superjet International

Knowledge and Process ManagementVolume 17 Number 2 pp 49–61 (2010)Published online in Wiley InterScience

0
(www.interscience.wiley.com) DOI: 10.1002/kpm.34
& Case Study

Building a Process-Based Organization:The Design Roadmap at SuperjetInternational

Corallo Angelo1, Margherita Alessandro1*, Scalvenzi Massimo2 andStorelli Davide1

1Euro-Mediterranean Incubator, University of Salento, Lecce, Campus Ecotekne, Via Monteroni s.n.,Lecce 73100, Italy2Alenia Aeronautica, CTO Process Improvement & Know-How Development, Turin, Italy

*CorneanMonE-ma

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The benefits of managing companies through a process-based approach are well recognized in the business literatureand in many corporate contexts. However, there is a limited discussion on how to practically design and develop anorganization based on processes. This paper aims to address this relative ‘gap’ in the literature by presenting the caseof a recent international joint venture in the regional jet industry. In the following paper, we present a story oforganization design based on the identification and description of the core process model of the company, with aspecific focus on customer service activities. Based on interviews and direct observation at the field site, this papershows themain steps undertaken to define the process taxonomy levels and to describe process elements, alongwith adiscussion of the relationships with the business model components of the company. The paper provides practicalvalue as it provides practical insights relating to the start-up of a new company driven by a process-based approach.Copyright # 2010 John Wiley & Sons, Ltd.

INTRODUCTION

The present turbulent economic landscape is forcingorganizations to quickly adapt to both existing andemerging dynamic change and find effective andefficient solutions for doing business in novelsituations. One of the areas mostly impacted bythis turbulence relates to the design of appropriateorganizational configurations. This design taskbecomes accordingly a more complex endeavourin such environments (Galbraith, 2002). Increasedcompetition on cost, quality and service, along withinefficiencies of functional structures, has necessi-tated an increased focus on the horizontal view ofbusiness activities and the alignment of organiz-ational systems towards business processes as acore management paradigm.

respondence to: Margherita Alessandro, Euro-Mediterra-Incubator, University of Salento, Campus Ecotekne, Via

teroni s.n. 73100, Lecce, Italyil: [email protected]

yright # 2010 John Wiley & Sons, Ltd.

Organizations are increasingly forced to focus ondesign, redesign and management of businessprocesses in order to better meet the risingexpectations of customers with respect to thequality, reliability and responsiveness of theirproducts and/or services. Another reason for thefocus on business processes and business processmanagement (BPM) concerns the control of coststhat are bound up in processes. Process manage-ment also demands detailed knowledge of theinternal and external aspects of business (e.g.customers, markets, environment, etc.). There isthus a need to research, develop and applyappropriate conceptual tools for analyzing pro-cesses within organizations (Wensley, 2003).

Business processes and BPM do not representnew topics of concern to management or manage-ment researchers. They have been among the mostdiscussed topics in the management literature forthe last 15 years (Davenport, 1993, 1995; Davenportand Stoddard, 1994; Hammer and Champy, 1993;Kettinger et al., 1997; Venkatraman, 1994; Zairi andSinclair, 1995). Specifically, there has been a

50 C. Angelo et al.

developing focus on business processes as drivers ofefficiency and innovation thanks to movements likeBusiness Process Reengineering (BPR), CapabilityMaturity Model Integration (CMMI) and Six Sigmaand Total Quality Management (TQM). Theseapproaches have attracted the interest of serviceindustries, such as banking and finance, as well ascomplex industrial sectors such as the automotiveand aerospace sectors.

Most of initiatives that have been discussed andanalysed in the past have addressed the reengineer-ing of current process structures in order to improvecost, time, value added and customer satisfaction.Other initiatives have aimed to convert traditionalorganizational structures into process-oriented con-figurations, based on the recognized potential ofbusiness processes to drive flexibility and respon-siveness. The adoption of Information Technology(IT) has also been extensively studied as an enablerof process development and optimization as well asfacilitating improvements in the coordination andintegration of process optimization (Short andVenkatraman, 1992; Venkatraman, 1994).

Despite such a broad range of studies, there arestill some gaps both in literature and in practice, assome relevant issues have not been fully addressedand the lack of a clear strategic roadmap still affectsmany process engineering initiatives. Indeed, creat-ing an organization based on processes turns out tobe far more challenging than redesigning activitiesor experimenting with incorporating a processmodel as an additional structure within a traditionalfunctional or divisional model. Besides structuralelements, it is crucial to discuss the alignment of allthe important organization design elements whichare likely to be relevant to the design, implementa-tion and management of business processes such asmanagement style, performance metrics, peoplepractices and organizational culture (Hernaus,2008b). The design of organizations around pro-cesses is thus a significant challenge for managersand both more research and more practicalguidelines and exemplars are needed (Kiraka andManning, 2005).

This paper investigates the topic of process-basedorganization development in the aerospace indus-try. In particular, we introduce, analyse and discussthe case of Superjet International, a new companyresulting from a partnership between AleniaAeronautica and Sukhoi Civil Aircraft Company(SCAC), focused on worldwide sales, marketingand customer service in the regional aircraftindustry.

Two factors argue for the choice of this particularindustrial context as for this study. First, aerospaceis a highly concentrated sector, with a small numberof system integrators and a large base of sub-contractors and suppliers of smaller componentsand services. System integrators are thus required tohave strong process orchestration and coordination

Copyright # 2010 John Wiley & Sons, Ltd.

capabilities in order to be able to achieve efficientand effective business operations in such complexenvironments. Second, the aerospace industry ischaracterized by complex products that must meetstringent performance and reliability requirements.Further, the declining margins on products, associ-ated to increasing margins relating to services,require that companies in the aerospace industryhave to adjust their business models through thedesign of new processes serving the needs ofworldwide customers.

Process design and management are thus at thetop of the corporate agenda in the aerospaceindustry. The need to build integration capabilitiesthrough value creation and customer orientationhas a fundamental impact on the organization and isthus the primary issue to be investigated. With thisin mind different ‘learning perspectives’ can belocated in the case we analyse, at three key levels: (a)native customer orientation of the company to drivethe process-based organization; (b) innovativeprocess description methodology and integrationwith technology systems (c) integration of theoverall business strategy with the purposefullycreated process model.

In the following section, we explore the maintheoretical foundations of our analysis. The researchstrategy and subject company are then introducedin next section. The process engineering phases andthe design framework adopted are illustrated in thesubsequent sections. A discussion and someconclusions, along with the identification of somedirections for further research, are then presented inthe final section.

THE PROCESS-BASED ORGANIZATION

For many years, both normative and positiveapproaches to the study of management have beendominated by the functional perspective. Althoughthe process perspective has begun to influencemanagement theory and practice organizations arestill primarily perceived as being functionallystructured rather than being composed of a set ofprocesses. Thus, designing structures still appearsto be the main emphasis of organization design(Simon, 1995). Nevertheless, evidence existsthat process focused design of organizations canresult in superior organizational performance. Forexample, recent research results demonstrates that‘process-complete’ departments that foster a collec-tive sense of responsibility in their workers havefaster cycle times with respect to functionaldepartments (Majchrzak and Wang, 1996).

Industry trends are also an important trigger forthe process-oriented transformation of organiz-ations. Companies in an increasing number ofindustrial sectors are rapidly transforming them-selves from firm-centric to network-centric models

Know. Process Mgmt. 17, 49–61 (2010)DOI: 10.1002/kpm

Building a Process-Based Organization 51

where corporations can be seen as portfolios ofcapabilities and relationships within and acrossorganizational boundaries (Venkatraman, 2006).The increasing importance of the ‘platform archi-tect’ or ‘orchestrator’ business model for organiz-ations inmany sectors is clear evidence of this trend,with examples in the automotive industry (e.g. GMand Ford), computer industry (e.g. Intel, Microsoftand Cisco) and many other sectors includingaerospace and IT. In these cases, the systems ofvalue adding intra- and inter-organizational pro-cesses thus represent key focal elements of analysis.Companies should thus move from a paradigm of‘strategy, structure and system’ to a ‘people,purpose and process’ perspective (Ghoshal andBartlett, 1997) and redesign management roles tofacilitate frontline entrepreneurship and cross-unitlearning.

The process-based organization has been pro-posed in literature as a ‘natural organizationstrategy’ (Crosetto and Macazaga, 2005) and thehorizontal process management structure has alsobeen considered as a specific type of networkorganizational structure (Harrington and Harring-ton, 1994). Building on these assumptions, thetraditional perspective which sees processes asderived from the overall corporate strategy, accord-ing to a ‘process follows strategy’ path, evolves to anew ‘strategy follows processes’ where the processbecomes a cornerstone of organizational design.There is a mutual inter-relationship between afirm’s strategy and processes (Schmidt and Treich-ler, 1998) and it is important to articulate theorganizational context of which critical processesare part, and then adopt a holistic approach toprocess design (Edwards et al., 2000; Short andVenkatraman, 1992).

The process-based organization is not a uniqueconcept and is better characterized as a family oforganizations evidencing different levels of matur-ity depending on which the organization isconsidered to be a process-focused, process-basedand process-oriented. Often, the process maturityconcept is offered as providing a path to businessimprovement and success (McCormack, 2007) andits basic notion is that there are different levels ofprocess orientation that companies strive to reach.The differences between the maturity levels can beinvestigated at different levels both inside andoutside the organization. To support a clearrepresentation and analysis of driving forces andcomponents relating to process analysis, a compre-hensive framework has been proposed (Kiraka andManning, 2005) which includes, beside processes,the internal organizational context (with strategyand structure) and external environment (withmacro-environment and external stakeholders).

A process-based model is thus different from oneorganization to another since there are contingentaspects to consider such as management practices,


performance measurement systems, reward sys-tems, people competencies, career paths andorganizational culture (Hernaus, 2008b). It is oftenthe case that the customer perspective is one of thecentral foci relating to the design, management andmeasurement of core processes. Thus, processes aimat adding value to the stakeholders of an organiz-ation and this implies that activities constitute aprocess which must be linked explicitly to stake-holders’ expectations (Braganza and Lambert,2000). Hence, the (internal and external) ‘customer’of one company is thus a key stakeholder to satisfyand the process perspective is conducive to thisobjective.

The most valuable characteristic of the process-based organization is that it can significantlyenhance the coordination among people andactivities and increase the company’s flexibilityallowing it to respond to market changes andcustomer needs efficiently and effectively. Theprocess structure allows attention to be directedtoward the customer. Attention thus directed leadsto greater satisfaction as well as improvements inproductivity, speed and efficiency. In addition,employees are able to take a broader view oforganizational goals rather than being focused onthe goals of a single department because there areno boundaries among functional areas (Daft, 2006).

Process-based organizations have a completelydifferent organizational shape when compared toother organizational structures. Two key ideasunderpin the organization configuration: (a) organ-ization units are organized under core processes; (b)other processes are added to these units minimizingthe necessity of coordination between units(Sepehri, 2004).

However, processes cannot be the only basis fororganizational structure since functional and pro-duct skills and knowledge remain important. Infact, the difficulty of designing and implementingprocess-based organization partially arises becauseof the need for horizontal and vertical managementstructures to co-exist and indeed be co-ordinatedwith each other. With this in mind, a multidimen-sional structure has been suggested with processownership as a dominant dimension (Vanhaver-beke and Torremans, 1999). Vertical managementsystems may also need to be reworked, but theycannot be altogether dismantled (Hammer andStanton, 1999). It is important to note, however, thatmany companies have engaged in setting up aprocess-based model simply by imposing processmanagement as an additional dimension on top ofthe existing functional or product dimension.

Process-based organizations can be seen repre-senting a later stage of process orientation in whichprocess thinking has become more pervasive in theorganization and the responsibilities for managingprocesses are diffused throughout lower manage-ment levels (Brown and Ross, 2003). It is thus


52 C. Angelo et al.

evident that the implementation of a process-basedorganization necessitates a large-scale transitionwhich can be particularly challenging because: (a) itis pervasive and includes changes of almost allaspects of the organization; (b) it involves the wholeorganization rather than particular units and (c) it isdeep and requires fundamental changes in assump-tions, beliefs and values (Hernaus, 2008a).

Throughout the 1990s, some organizations trans-formed themselves from functionally oriented toprocess-based entities. An extended research studyat Xerox Ltd showed the importance of coordinatingeffectively information management, strategy andstructure within the context of a process-focusedenterprise. The research shows that a holisticapproach to management by process is possible ifit is facilitated by the appropriate organization ofinformation management (Seltsikas, 2001). Othersignificant cases of process-based (re)organizationsare Barclays Bank, Duke Power, General Electric,IBM,Motorola, Quantum and Texas Instruments. Inthe aerospace industry, important experiences havebeen realized at Boeing Airlift Tanker and NorthropGrumman Space Technology.

The extensive research literature which addressesprocess innovation can be utilized to identify thecritical issues relating to transforming organizationsinto process-based organizations. Thus, it has beenargued that in an extensive innovation initiative, itis crucial to analyse the complex dynamics ofchange by addressing issues such as feasibility,sequence and stakeholders’ evaluation (Brynjolfs-son et al., 1997). The task of getting people to processand accept change and reengineering is difficult andpainful and requires a change in the culture of thecompany (Garvin, 1995). As organizations attemptto deal with important changes, critical successfactors include the need for a comprehensive actionplan and clear understanding of aspirations andgoals of people (Chrusciel and Field, 2006). Changesin the environment should also be evaluated toidentify realistically whether to redesign existingprocesses or develop new ones (Edwards et al.,2000). Some researchers highlight the importance ofsustaining change from the bottom-up and to ‘startsmall’ with pilot initiatives (Caron et al., 1994).Considering the integrated nature of an organiz-ation, it is important to consider the interactinginfluences of content, context, process and individ-ual differences on change efforts (Walker et al.,2007). Further, the effective introduction of changerequires addressing the nature and interaction ofstrategy, people, process and relevant enablers. Asystems view of these components and theirrelationships is also a key to streamlining ICTadoption and process redesign (Margherita andPetti, 2010).

One of the main difficulties in building anorganization based on processes is the identificationof processes because their boundaries are not


always clearly defined. In fact, processes areselected portions of larger streams of activity andprocess boundariesmust be set or established in thislarger context, before they can be adequatelyidentified (Nickols, 1998). The MIT Process Hand-book repository represents an interesting approachto ‘taxonomization’ and the creative exploration ofprocess models (Klein et al., 2003). A relatedapproach involves the application of coordinationprinciples to improve flow, fit and share depen-dencies and come up with more robust andinnovative business processes based on the identi-fication of a set of key process metrics (Margheritaet al., 2007).

Process orientation and business process practicehave an influence on job characteristics and peoples’existing and required future competencies. Theyshape job designs, accountabilities and skill require-ments, all of which significantly impact culture andcompetencies (Gardner, 2004). There is thus theneed to define methods, roadmaps and guidelinesto streamline the introduction of a process mindsetand structure within the organization. The analysisof practical examples of companies attempting tocreate a process-based structure can also provideinteresting contributions to our understanding.

RESEARCH SITE AND METHOD

The research described in this paper leverages anongoing collaboration between the authors and theFinmeccanica Group, and in particular with AleniaAeronautica. The direct interaction with companymanagers and other key individuals allowed theresearchers to obtain insights and informationwhich would not have been accessible otherwise.In the following paragraphs, an initial description ofthe subject company, the study plan and itsexecution are reported, along with the mainfindings obtained.

The subject company: Superjet International

Superjet International (SJI) was established in July2007 and started operations in February 2009. Thecompany, headquartered in Venice (Italy), wascreated as a joint venture between the Italian AleniaAeronautica and SCAC, the civil aviation branch ofSukhoi which is one of the most renowned Russianaviation companies. Alenia Aeronautica, a com-pany totally owned by the Finmeccanica Group,owns ‘25%þ 1’ of shares in SCAC whereas Sukhoiholding owns the remaining ‘75%� 1’ shares. Thus,Alenia controls the majority of shares (51%) in SJLand the remaining part is owned by SCAC. Figure 1shows the ownership structure of SJI.

The motivation to create SJI resulted from acommon interest of SCAC and Alenia Aeronauticain entering the market for regional jets. This interest


Figure 1 Ownership structure of Superjet International


reflects the current market realities where aircraftproducers are converging on producing 80/100-seataircraft, due to factors such as the increase of oilprice, cost-per-seat and total cost of ownership.Companies which previously produced 30/50-seatjets (e.g. Embraer and Bombardier) have begun toproduce 100 and 110-seat versions. Boeing andAirbus are also adapting some of their aircraft inorder to enter the market for this type of regional jet.

SCAC developed the SJI 100 which is a state-of-the-art aircraft which is the result of a joint effortinvolving leading players such as Boeing (super-vision), Thales (Avionics) and Powerjet (engines).The aircraft is distinguished by a full fly-by-wiresystem, optimal wing-engine combination thatguarantees fuel savings and reduction of pollutingand acoustic emissions, and better comfortparameters (e.g. space per seat and baggage vane)with respect to competitors. Figure 2 shows themain features of the SJI 100 series and the companiesinvolved in the creation of the aircraft.

SCAC needed a partner in order to enter the civilmarket, particularly the market segments involvingWestern countries. In contrast, Alenia Aeronauticahas strong competencies in flight certification andrelationships with key certification institutions suchas EASA (European Aviation Safety Agency) andthe FAA (Federal Aviation Administration) but thecompany lacked a suitable product with which toenter the regional jet segment. The two companies,therefore, represented a natural ‘fit’. The sub-

Figure 2 SJI 100 features a


sequent agreement between the companies thusallowed for the identification of complementaryroles: SCAC designs and produces aircraft andsells to the Russian, Chinese and other easternmarkets whereas SJI buys the aircraft from SCAC,conducts marketing activities and sells to westernmarkets and Japan. Thanks to its central role (andmajority shareholding) of Alenia Aeronautica SJIalso provides after-sales support and servicesworldwide. SJI also provides training and thedesign and development of customized ‘VIP’ andcargo versions of the Superjet 100 family.

SJI is thus ‘native’ in the regional jet segment andthis can be a competitive advantage with respect toother players. Besides, the company has thepossibility to create de novo an organizationaccording to a set of high-level standards. However,challenges are presented due to the lack of a set ofconsolidated rules to follow and the need to developa unique corporate identity when the two partnershave very different management styles, expec-tations and organizational models.

Case study plan and interviews

The primary focus of this research on one singleorganization and the peculiar industrial setting ledus to apply a qualitative investigation methodologyin order to address the needs of the specific contextof analysis. In particular, a case study approachsuch as the one utilized in this research is generallyappropriate in the study of contemporary eventsand non-controllable units of analysis (Stake, 1995;Yin, 2003). This study relied on different sources ofevidence. Beside the company website and otherweb sources, most of the information was collectedthrough a set of interviews involving AleniaAeronautica and SJI employees. Following a ‘snow-ball’ approach (Bryman and Bell, 2007), theresearchers firstly contacted a project managerand this key informant provided an extensiveoverview of topics and helped the research teamto identify other people to interview. Interviewsutilized semi-structured and open-ended questions,

nd partnership network


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with the objective of obtaining more diverseperspectives, views and opinions sharing (Creswell,2003).

Ten persons were interviewed in Venice (SJIheadquarters), Rome (Finmeccanica Group head-quarters) and Turin (one of the Alenia Aeronauticaplants), divided as follows: (a) the CEO of SJI; (b)four persons in the ICT area; (c) two persons in theCTO and Know-How Improvement; (d) one personin the Operations; (e) one person in the CorporateStrategy and (f) one person in the Customer Service.The composition of the sample wasmade in order tosatisfy two criteria: (1) involve all the core nucleusof persons who had a direct role in the creation ofSJI; (2) define an ‘interdisciplinary’ group tocapture the integrated technological, strategicand organizational perspectives of the experiencemade.

The research was divided into three main phases:(a) focus identification and questionnaire design(March 2009); (b) interview and data collection(April 2009) and (c) draft case creation andvalidation (May–September 2009) based on amember-checking approach (Creswell, 2003) andthe use of key informants to review the findingsobtained.

Two main research questions have oriented thestudy: (1) which approach, methods and activitieshave been defined and executed at SJI to design theprocess-based business model? (2) In which wayhas the process model been used in the frame of theoverall organizational design?

This focus, along with the main issues identifiedin the literature with the creation of a process-basedorganization, determined a particular focus on thefollowing areas investigated through the interviewsand the overall study: (1) industry and marketpositioning of SJI; (2) key phases and actors in thestart-up; (3) process design andmodelling approachand methods; (4) process management, perform-ance monitoring and IT platforms; (5) informationflows management and privacy security policy; (6)company network structure and dynamics; (7)partnership strategy and development (8) compe-tence management approach, systems and pro-grams.

Whereas the first two areas are necessary in orderto frame the organization background, the third andfourth areas represent the core aspects of processanalysis. Besides, information flows, networkdevelopment and partnership strategy are particu-larly relevant for the case in point given the mixedItalian–Russian management. Finally, competencemanagement is a critical aspect of the study in orderto identify the distinguishing skills required inprocess-oriented organizations as distinct fromthose present in traditional companies. The nextsection illustrates how the process design andmodelling work were realized at SJI, with a detailedanalysis of the roadmap of activities implemented.


PROCESS DESIGN ROADMAP AT SJI

The strong commitment to the creation of SJI by topmanagement of the partner companies allowed forthe new company to be created with an initialorientation towards business processes. It alsoallowed the design of an innovative organizationthrough applying the experiences accumulated as aresult of the prior professional experience of theparticipants. The first step (August/December2007) involved the creation of a core team ofprofessionals with the objective of designing andoperationalizing the process and organizationalmodel of the new company.

The complete start-up and process design phaseinvolved a variety of different stakeholders such as:Bain&Company, a consulting company involved inthe initial interviews and process model definition;KPMG, for the definition of low-level processmodels and implementation of SAP systems; Ernst& Young, to support the ICT area and themanagement of technical data; Elsag Datamat (aFinmeccanica company), for technical training andoperative support in process analysis and design;Alenia Aeronautica, with a major role in interviews,process modelling and deployment of the Com-ponent Business Model (CBM) methodology; Fin-meccanica Group Services (FGS), providing thestandard methodology for BPM and the BPM2CBMmethodology (this methodology and the CBMapproach will be analysed in the following section).

In addition to these ‘external’ parties, SJI person-nel were fully involved in the start-up team so thatthey could bring their professional experience as acritical asset in the definition of the organization andprocess model. The resulting team was character-ized by a high level of diversity in terms of culture(15 different countries of origin) and professionalbackground (e.g. people coming from airlines wererecruited to simultaneously bring both a producerand a customer perspective).

Experiences and ideas were translated intoactivity flows, organizational roles and otherprocess details, thus, obtaining a holistic descriptionof the company. The initial scope of the analysis wasconsidered to be the enterprise as a whole in orderto obtain a set of high-level models related to all theorganizational areas. However, most attention wasfocused on those areas that, for strategic or urgencyreasons, required an early detailed analysis. Areassuch as ‘Sales and Accounting’ and ‘CustomerServices’ were focused on. Absolute priority wasgiven tomodelling the processes and organizationalstructure of Customer Services, for three mainreasons: (1) marketing and customer services are atthe core of the mission of SJI and the company mustbe ready from the very beginning to support anysale and after-sales need; (2) after-sales is aparticularly complex area which deserves a specialfocus and early design effort; (3) SJI employees were


Figure 3 Phases of process engineering at SJI


likely to have a potential gap of competencies incustomer services since they mostly come fromorganizations (such as Alenia Aeronautica andAlenia Aeronavali) which are more skilled onmanufacturing rather than commercial aspects.

For Customer Services and other key processareas which were initially focused on, the processengineering activities were organized in four phases(see Figure 3): (1) process identification andsegmentation (December 2007/March 2008); (2)process flow modelling and tool identification(March 2008/May 2008); (3) process modelling inthe BPM suite adopted, i.e. ARIS (produced by IDSSheer) (April 2008/June 2008); (4) detailed activitiesand tool description (May 2008/June 2008).

The official Technical Convention on ‘BusinessArchitecture Modelling’ provided by FGS and theARIS system (in particular, the ‘Business Architect’and ‘Business Publisher’ modules) provided thecore methodological and software platform. ARIS

Figure 4 Process m


was also chosen because it is the standard BPM toolused in Finmeccanica and it is perfectly interoper-able with SAP systems. The four phases led to themodelling of business processes on five levels (plusa level ‘0’) of detail, as showed in Figure 4.

The starting point for modelling is represented bya high-level definition (level 0) of the businessprocess areas of the company, i.e. core processes,management processes and support processes. Thefirst level of detail is then obtained by creatingthe taxonomy of process areas and this resulted inthe identification of four core processes (e.g.product design and manufacturing), two manage-ment processes (e.g. quality systems management)and five support processes (e.g. budget, planningand control). Each core process is then decomposedat the second level to obtain a set of value chaindiagrams, i.e. sequences of value adding activitieswhich compose the different first-level processes.The third-level analysis aims to define Event-driven

odelling levels


Table 1 Mapping of process taxonomy levels and process phases

Level Process taxonomy elements Phase Project phases

0 High-level business areas 1 Process identification and segmentation1 Basic process classification2 Process value chain3 Event-driven process chains 2 Process flow modelling and tools identification4 Functions 3 Process modelling in the BPM suite5 Function allocation diagrams 4 Detailed activities and tools description

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Process Chain (EPC) diagrams, i.e. specific types offlow chart describing the processes detailed at theprevious level in terms of functions and events, i.e.circumstances under which the function or processworks (e.g. ‘requirement captured’ or ‘material onstock’). EPC diagrams are then expanded torepresent functions (fourth level) and finallythe fifth level contains Functional AllocationDiagrams (FAD), i.e. detailed descriptions aboutwho performs functions and how they are per-formed, with information such as data, documen-tation, application systems (e.g. SAP systems),organizational units, types of responsibility, inputsand output.

These five levels of process description have beenobtained throughout the four phases of the road-map applied at Superjet International in order tobuild the core process model of the company, asshown in Table 1.

The first phase of the roadmap—‘Process identi-fication and segmentation’—had the objective ofdefining an initial process classification along witha core organizational chart and description of jobs.The approach adopted was based both on thestandard American Productivity and QualityCenter (APQC) process classification frameworkfor the aerospace (www.apqc.org) and on previousexperiences of SJI managers and process analysts.As already highlighted, the focus was immediatelyplaced on classifying customer service activitieswhich had goals described by one the managersinterviewed as follows:

[T]he goal of Customer Services is provide superiorservice respect to competitors, support SuperJet 100

Figure 5 Customer service activities of SJI (


worldwide sales, and exceed customer expectations. Toachieve this goal, SJI is building a structured andefficient organization gathering experienced pro-fessionals from the aviation world resulting in atruly international team.

The basic structure of customer service processesof the company have been identified and isillustrated in Figure 5.

With respect to the organizational chart forCustomer Services, the four key areas of responsi-bility identified are: (1) spare and logistics; (2)technical support; (3) commercial services and (4)training/flight operations.

The second phase of the roadmap—‘Process flowmodelling and tools identification’—was aimed atobtaining a logical process flow and high-levelprocess model. Process analysts at SJI realized thedifficulties of mapping the taxonomy tree with EPCdiagrams. In fact, starting from the taxonomy, it ispossible to identify process activities but it is quitehard to define sequences and connections amongactivities. The reason for this derives from the factthat taxonomies are much less structured thanbusiness processes and they just define connectionsamong macro-processes. The second phase startedwith information obtained from a set of unstruc-tured interviews conducted with process ownersand brainstorming sessions which led to thecreation of a number of process diagrams. Duringthis phase, some process analysts used the ARISBPM suite to directly transform the informationcaptured into EPC diagrams. Other analysts, whohad no expertise with ARIS and EPC, used PowerPoint slides to design flow charts, trying to ensure

source: www.superjetinternational.com)



that they were as compliant as possible with theEPC notation. The modelling of flows was basicallyaimed at representing, for each process analysed,elements like events, tasks, logical connections,gateways, etc.

The ‘misalignment’ in the modelling approachcaused some difficulties in the third phase—‘Processmodelling in the BPM suite’—aimed at bringing allthe organizational and process modelling workwithin the process management system. In fact, thePower Point diagrams obtained in the previousphase had to be translated into EPC flows to obtain astandardized knowledge base about third-levelprocesses. This translation activity, mainly doneby people skilled on ARIS, was error prone and timeconsuming as a result of two kinds of problems: (1)EPC diagrams have a specific focus on events andrequire a different modelling approach with respectto traditional flow charts; and (2) some members inthe core project nucleus did not participate in theinterviews and the absence of ‘transcripts’ causedsome problems in the interpretation of Power Pointdiagrams.

The fourth phase of the process engineeringroadmap—‘Detailed activities and tools description’—was aimed to provide a detailed description ofactivities and to integrate within ARIS the infor-mation about supporting tools and documentation.The last modelling level of ARIS (fifth level) allowsfor the specification for each activity, of informationsuch as resources, input/output and supportingtechnology systems. This level of detail has beenobtained for a limited sub-set of processes, inparticular for those already enabled by the employ-ees and systems.

An important stimulus for process definitioncame from the commitment of the company toobtain quality certification. SJI was required to becertified according to the ISO 9001 standard whichrequired a focus on business processes. Thesystematic process modelling effort undertakenwith ARIS was an important enabler of thecertification procedures. ISO 9001 does not provideprecise indications about process taxonomies andmodelling approaches and it just requires theenterprise to be organized by processes and todescribe product-related activities (e.g. design,production, customer service, etc.). ISO 9001 ismore explicit in terms of specific process definition.For example, in the aeronautic sector, it requiresthe accurate description of processes related toConfiguration Management. The most relevantprocesses of SJI are directly translated intospecific procedures whereas smaller or ‘support’processes are aggregated within a single procedure.In particular, about 70 second-level processes aremapped on 60 procedures. Process analysts are alsoplanning to use the BPM system for the automaticgeneration of documentation starting from processdefinition.


When this study was formalized, 11 macro-processes (first level) and 70 second-level modelswere defined. At the third level, there are more than600 activities, whereas the fourth level still needs asignificant effort for completion. Several fifth-levelmodels are available, providing an integrationinterface with SAP systems.

COMPONENT BUSINESS MODEL:STRATEGY FOLLOWS PROCESSES

The identification, analysis and representation ofbusiness processes are important to create moreeffective and efficient enterprise activities. Amanager of the company noted that:

the start-up activities of SJI have suggested differentscenarios for process approach application: 1) work-flow, resources and IT modelling; 2) guidelines,procedures and reporting for knowledge management;3) software development (e.g. ERP and CRM); 4)compliance with quality certification (e.g. ISO 9001);5) support for component business model analysis (e.g.make-or-buy or budget allocation); 6) performancemeasurement (e.g. KPI and balanced scorecardmodels); 7) support for business processes reengineer-ing and benchmarking.

A limitation of process models and flows couldbe/is that they can be too complex to be understoodby people not directly involved (e.g. top managers)and the link with the overall business strategy is notalways easy to identify. The information providedby this research into SJI provides insight into therelationship that the company has tried to establishbetween processes and strategy, in a ‘strategyfollows processes’ view (Schmidt and Treichler,1998) where the process becomes a driver oforganizational design.

After having identified and modelled the keyprocesses, the company adopted the CBM, aframework developed by IBM (IBM BusinessConsulting Services, 2005) to model and analysean enterprise through a logical representation ormap of business components or ‘building blocks’.CBM supports a set of strategic operations (e.g.mergers and acquisitions, gap analysis, make or buyanalysis) which can be hardly accomplishedthrough a pure process-based approach.

In the CBM model, each component is like a sub-organization with its own objectives, resources andactivities and provides/consumes specific businessservices. Components can be internal or external tothe organization and are organized by competencyand accountability. Competencies are different foreach enterprise and represent a high-level view ofcomponents according to the type of business valueprovided. They are typically aggregated undermacro-families like ‘manage’, ‘design’, ‘buy’, ‘make’and ‘sell’. Accountability is defined at three levels,


58 C. Angelo et al.

i.e. direct, for components providing strategicguidance and policy; control, bridging the gapbetween the other two levels by monitoringperformance and handling exceptions and execute,providing actual activities and services that drivevalue creation. Figure 6 shows the core structure of ageneral CBM map.

The creation of a CBM map for SJI began with ahigh-level framework defined by the corporatestrategy area of Finmeccanica, based on a standardCBM map for the aeronautic sector. Each com-ponent groups the activities (derived from processmodels present in ARIS) which are under its‘responsibility’. Activities are thus core elementsboth in process perspective and in the CBM viewand the only substantial difference stays in thecriteria used to aggregate and visualize content.

In order to fully integrate the CBM analysis withthe BPM approach, FGS created a methodologynamed ‘BPM2CBM’. At the beginning of the CBMstudy of SJI, an Excel spreadsheet was used torepresent the information about process activitiesextracted from third-level models. This approachcaused significant difficulties in that all the changesto process models had to be manually reported inthe Excel file, with the accompanying loss of timeand risk of inconsistencies. To solve this problem,the CBM approach was integrated directly into theARIS BPM suite through the use of UML classdiagrams (since CBM is not natively supported byARIS). The customization of the system allowedanalysts to manage both processes and businesscomponents in a single design environment, thusenabling a coherent implementation of theCBM2BPM methodology. In fact, third-level pro-cesses included in business components are auto-

Figure 6 Business components in the C


matically related to those used in ARIS EPCdiagrams in this approach.

However, some issues need still to be managed:(a) there is no control ensuring the allocation of athird-level process to CBM components and thus, incase of deletion or creation of a new third-levelprocess, a misalignment with the CBM map canoccur; (b) the one-to-one association of a third-levelprocess to a single CBM component is not verifiedand it is thus possible to mistakenly create differentoccurrences of the same process in different CBMcomponents; (c) there is no formal verification thatthe process level allocated in the component iscorrect (i.e. a third level).

The BPM2CBM approach in SJI was firstlyapplied to support make-or-buy decisions basedon the assessment of strategic competencies (to keep‘in-house’) and non-strategic competencies (to out-source). This analysis is complex since the companyworks as an open system where many partnershave different roles and the dependencies amongthe activities of each partner strongly influence thestrategic choices. Another element of complexity isrepresented by the payback period which couldpostpone some investments with respect to others(concept of as late as possible (ALAP)). As anexample, the creation of a spare parts warehousecan be postponed until the first aircraft are actuallysold to customers.

Cost analysis is of fundamental importance formany company decisions. The CBM approach isalso being used in SJI to perform a ‘quick and dirty’and high-level analysis of costs aimed at sub-dividing the overall company budget amongdifferent business components or functions. Themethodology enables a precise evaluation of costs

BM approach (adapted from IBM)



for each CBM component. Each component has aset of activities and each activity is a part of abusiness process. If a cost model is associated withactivities and a simulation is conducted for theprocesses concerned, it is then possible to collectthe results of the simulation and estimate in areliable way the costs of components (as addition ofcosts of its activities). It is thus possible to undertakean initial rough analysis (dry run) to understand themacro-situation and then use simulations to gomore in detail and refine process optimization. CBManalysis can be applied to a start-up but it can alsobe used in merger and acquisition operations wherethe comparison among processes can be even morecomplicated. The development and implementationof the BPM2CBM approach in SJI has fostered newapplications in other Finmeccanica companies suchas Selex Communications.

At this stage, no Key Performance Indicators(KPI) or metrics have been defined for processes butCBM components have been analysed with respectto parameters or evaluation axes which haveallowed the identification of ‘hot’ components.Such axes (some of them have been adopted fromprevious Finmeccanica and Alenia projects such asALENET) relate to factors such as businessrelevance, cost, competence gap, ICT maturity,centrality for the company mission and interfacewith suppliers. After the categorization of such axes

Figure 7 Customer service compo


with respect to two synthetic indicators (i.e. qualityand business), it was possible to represent businesscomponents in the CBMmap for SJI. Figure 7 showsthe map, and in particular the components relatedwith Customer Services. Hot areas are indicated indarker boxes and represent the most urgent andstrategic components for which make or buy andother strategic decisions have been needed since thefirst day of existence of the company.

CONCLUSIONS AND FUTURERESEARCH DIRECTIONS

Process-based approaches can be utilized to stream-line company activities and enhance a company’sability to respond to customer needs. However, thedevelopment of a process-based organization is acomplex and multifaceted task which shouldaddress different factors at strategic, structuraland external environment level. A process-basedmodel thus differs from one organization to anothersince there are contingences to consider likemanagement practices, people competencies andculture and the network of stakeholders.

The experience at SJI showed how crucial it is toobtain the full commitment of top management tocreate a new process-based organization. Thecreation of competitive advantage based on efficient

nents in the CBM map of SJI


60 C. Angelo et al.

and effective services to customers typicallyrequires a process-based orientation. Therefore,since the very beginning the company has tried tolink corporate strategy with everyday activity. Theexperience of SJI shows it is necessary to identifyand define the core process model of the company.Beside the creation of a robust process taxonomy,process analysis should be enriched by elementsrelating to the organizational functions and rolesinvolved, inter-process links, input, output,resources used and enabling technology systems.In addition, the relationships of processes with theoverall business model of the company should beidentified.

SJI was conceived from the beginning as a‘process-complete’ company in order to foster acollective customer mindset and sense of respon-sibility among its employees, resulting in fastercycle times, enhanced coordination and customerresponsiveness with respect to functional depart-ments. The process structure of SJI directs attentiontowards the customer, which leads to greatercustomer satisfaction as well as improvements inproductivity, speed and efficiency. In addition,employees develop a broader view of organiz-ational goals rather than being focused on narrow,departmental goals. In the process-based organiz-ation, organization units are organized under coreprocesses and other processes are then added tothese units minimizing the necessity of cross-unitcoordination. Finally, process orientation shapes jobdesigns, culture, competencies and skill require-ments.

From an operational point of view, some lessonslearned have emerged throughout the experiencemade at SJI: (a) the starting point for creating theprocess-based organization should be the identifi-cation and modelling of those core processes thatmostly contribute to the business model of thecompany; (b) the process represents the corenucleus around which to define the organizationalmodel and other key elements; (c) processes shouldbe defined and analysed at different levels of detaillike flows, interactions, functions, etc.; (d) the‘translation’ of the basic process taxonomy into alogical flow of activities is not immediate; (e) theconsolidation of process models described withdifferent methods (i.e. Power Point charts versusEPC charts) can be time consuming and causepossible inconsistencies, resulting in a slow down ofthe overall modelling activity; (f) the diffusion andknowledge of the modelling methodology and toolsthroughout the company is a critical factor for thesuccess of the initiative; (g) BPM systems arefundamental to systematize the knowledge base,automate activities and establish links with otherenterprise systems (e.g. ERP, SCM); (h) the coreprocess model of the company can support theidentification of ‘hot’ components in the businessmodelling perspective.


With an aircraft which combines deep techno-logical expertise and innovative, customer-focusedfeatures, a workforce with a truly internationalmindset and a customer which is a real partner inthe design and delivery process, SJI is graduallybecoming a key player in the civil aviation field.More than 100 orders have been placed with thecompany and the first deliveries should occur in2010. This study provides interesting insights intothe creation of new companies with an organiz-ational mindset beyond a functional model.

One limitation of this paper concerns the lack ofidentification or application of performanceindicators such as process consistency, cost andlead time and customer value. Future research willthus be dedicated to investigate the evolution ofoperations of SJI and to measure the overallperformance and effects of the process-basedapproach that has been implemented. In addition,the experience provided by SJI will represent astarting point to identify a set of things ‘to-do’ and‘not-to-do’ and also allow the identification ofguidelines for defining a roadmap to streamlinethe creation of a successful process-based organiz-ation.

ACKNOWLEDGEMENTS

The authors are grateful to all the persons of AleniaAeronautica, Finmeccanica Group and Superjet Inter-national who provided a fundamental support in theinterview and information collection phase as well as inthe validation of findings obtained.

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Building a Process-Based Organization: The Design Roadmap at Superjet International

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