Five Interesting Uses for Modeling - 2 - Global vs Local Processes


The next scenario that we'll consider is the perennial problem that large organizations face. Which is, very simply, that large organizations do a lot of things. So they have many, many processes. Some are documented, some not so much. And these organizations, sensibly, document their processes and attempt to improve them.

But unfortunately, these same organizations do tend to operate in a large number of jurisdictions. Most modeling vendors have less than 100 employees, and yet all of them have offices and people living in multiple continents. Most multinationals have people in more than 100 different countries.

Why is this a problem? Because of regulation.

In the European Union, each country has its own value added tax. Meaning, you must charge a premium to your customer, but you can claim against your payment, for the amount that your suppliers paid. Sounds great, but what if your supplier was in a country with a different rate? And don't get me started on interacting with countries with final tax rates (like the USA) who have different final tax rates depending on the state (like the USA).

Oh dear. Well, at least that's just finance, right? Um, no. How long is maternity leave? What about paternity leave? So, Poland has 26 weeks of maternity leave and 2 weeks of paternity leave, while Italy just has 5 months of maternity leave. Um.

Okay, but I'm in operations, so I'm okay, right? Until I need to ship a consignment of electronic components to the Middle East... and then I have to work to show compliance with various export regulations. Oh dear.

Alas, there are few parts of business that don't have to cope with multiple jurisdictions these days, so while it’s true that almost all business processes have to take account of applicable regulations, in practice an organization will often have to operate multiple business processes to take account of the multiple jurisdictions that they deal with.

With this in mind, it can seem like any attempt at standardizing operations becomes futile. But it turns out that this is any area where process modeling can deliver some very real benefits.

First of all, there is the concept of process leveling. Breaking processes down into a hierarchy of ever more detailed processes is a standard technique in business process mapping, but in our specific scenario allows the organization to separate out jurisdiction-specific process areas into lower-level processes. In other words the modularity implied in process leveling allows commonality in some areas of a top-level process, combined with flexibility to adjust to local conditions.

The second area where formal process modeling can assist with the challenges of multiple jurisdictions comes from the process repository itself – specifically, the ability to search and select processes, based

on attributes or tags of some kind. I've seen one organization (in the chemical industry) that had almost 3000 different fulfillment processes based on the interaction of different jurisdictions – this organization managed to keep things running by implementing a tagging system enabling staff to locate the correct process to follow immediately by searching their process repository.

Jurisdictional issues are messy, and this might seem like a strange business case to make for modeling – but the tangle of red tape that exists these days means that process modeling can deliver real benefits in this regard.