APQC Process Classification Framework

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Many businesses are turning to making do with the limited resources at their disposal. Organizations persistently improve business agility and operational performance to remain competitive.  There are several ways of achieving this objective, such as:

  • Exploring the use of new technologies to reduce costs;
  • Simplifying business operations/processes by reducing waste;
  • Lowering production and administration costs; and
  • Developing new approaches and products to provide a strategic advantage over their competitors.

Ultimately, process management enables organisation to understand their processes in more detail to implement the above scenarios.

It may seem hectic and daunting for many Small to Medium Sized Businesses compared to larger businesses and corporations, but learning to document business process and the availability of simple tools to achieve it are well within the reach of all businesses and companies, regardless of size. Knowing how to get started, however, is often seen as the hardest problem.

The principles outlined in this paper are relevant to businesses and organisations of all sizes.

There are many methodologies that may be used to scope business processes. Frameworks are becoming very common and there are process frameworks that can be used. A process framework is a means of grouping processes into appropriately related categories. Process frameworks provide:

  • The foundation structure for the business process.
  • A list of the core processes to include
  • A starting point for what to include and what is important
  • Visibility of processes to the wider organisation
  • A basis to determine process ownership and assignment of tasks.

There are several process frameworks available. As everything else, some are widely known while others not so much.  The four of the most well-known process frameworks include:

  • APQC PCF – The APQC Process Classification Framework (PCF) is arguably the most well-known and widely adopted process framework. The framework contains a generic cross industry framework and 11 industry specific frameworks.
  • eTOM – The Enhanced Telecommunications Operations Map (eTOM) is a framework for the analysis and improvement of telecommunications processes, with a focus on customer support and customer satisfaction.
  • SCOR – Developed by the Supply Chain Council, the Supply Chain Operations Reference (SCOR) is used mostly for industries in supply chain management. The model is structured around five management processes: plan, source, make, deliver and return.
  • VRM – Also developed using a supply chain approach, the Value Reference Model (VRM) is a very comprehensive model that can be adapted to any business.

How do I choose which one to use?

Each of the process frameworks has its own strengths and weaknesses; the APQC’s Process Classification Framework (PCF) is probably the best known as well as the most easily accessible process framework. APQC provide open access to all versions of the PCF as well as information documents that describe each of the many Processes and Key Performance Indicators within the PCF.

It is important to select the right PCF for your organisation. The Cross-Industry model is the best one to use for most organisations, unless your industry has its own version, as it is the most up-to-date and complete.

The most common reason why people use Process frameworks is to help them classify processes into a classification structure in order to better understand how the processes relate to each other and how they are a part of getting things done. We will be focusing on the APQC’s Process Classification Framework (PCF), which is probably the most well-known and commonly used framework.

We will discuss the APQC Process Classification Framework by outlining:

  • Who the APQC are;
  • What the APQC Process Classification Framework is; and
  • How you can use the APQC PCF:
    • When Scoping a Process Project
    • In a Process Documentation project; or
    • To structure your Process Repository

Who are APQC?

APQC started as the American Productivity Centre (APC) in 1977 and was founded to improve productivity in the US. It became well known as a source of resources on productivity, quality, improvement methodologies, training, and advisory services. Over time, its name was changed to the American Productivity & Quality Centre and then simply APQC.

APQC’s Process Classification Framework® (PCF) is a naming convention of business processes that allows organisations to objectively track and compare their performance internally and externally with organisations from any industry.

APQC’s PCF was developed in the early 1990s by APQC and a group of members from a number of industries and countries with a strong interest in advancing the use of benchmarking throughout the world. Originally envisioned as a tool to aid in performance improvement projects, the framework evolved into the broad taxonomy that it is today. Since its inception in 1992, the PCF has seen updates to most of its content. These updates keep the framework current with the ways that organizations do business around the world. Organisations can use the PCF’s common terminology to name, organise, and map their processes. It is also helpful as a tool for explaining a business in terms of horizontal processes rather than vertical functions.

It is designed as a framework and global standard to be customised for use in any organisation  regardless of industry, size, or geography. Thus, the PCF does not list all processes within a specific organisation, and every process listed in the framework does not exist in all organizations.

APQC’s PCF organizes operating and management processes into 13 enterprise-level categories:

  • Develop Vision and Strategy
  • Develop and Manage Products and Services
  • Market and Sell Products and Services
  • Deliver Physical Products
  • Deliver Services
  • Manage Customer Service
  • Develop and Manage Human Capital
  • Manage Information Technology (IT)
  • Manage Financial Resources
  • Acquire, Construct, and Manage Assets
  • Manage Enterprise Risk, Compliance, Remediation, and Resiliency
  • Manage External Relationships
  • Develop and Manage Business Capabilities

For my role as a BPM Consultant to some degree all the process above apply to my role, some of the processes have greater impact than others. The processes that have the greatest impact on my role are:

  • Develop and Manage Products and Services
  • Deliver Services
  • Manage Customer Service
  • Manage Information Technology (IT)
  • Manage Enterprise Risk, Compliance, Remediation, and Resiliency
  • Manage External Relationships

When considered as a whole, they collectively represent the operation of any business or organization. The APQC PCF is structured into 4 Levels:

  • Category: The highest level of process in the enterprise, e.g. “Manage Supply Chain” or “Manage Customer Service”.
  • Process Group: Indicates the next level of processes as a group of processes, e.g. “Perform After Sales Repairs” or “Develop Sales Strategy”.
  • Process: A series of activities converting inputs into outcomes, e.g. “Develop sales forecast” or “Create materials plan”.
  • Activity: Indicates key events performed when executing a process, e.g. “Receive Customer Requests” or Resolve Customer Complaints”.

In addition to the PCF, the APQC has also begun publishing definitions and key measures for the processes.

Applying the APQC’s PCF – Overview

There are many practical ways of utilising the APQC’s PCF. For example the PCF can be used to provide:

  • The framework and checklist of processes to use when you are scoping Process-related projects;
  • The basis of your process repository structure, whether you using a sophisticated tool such as SharePoint, or a simple set of folders on a shared network drive; and
  • The starting point for a Process Documentation Project by giving a detailed list of processes.

Applying the APQC’s PCF – Example 1 – Scoping a Process Project

The comprehensive coverage of APQC’s PCF makes it quick and easy to scope a process project, simply by stepping through each process, identifying whether it is either in or out of scope (or maybe unclear).

In our example, we are scoping a project to review how well a HR Management System supports our existing business processes.

Step 1: Identify which of the categories are going to be of interest to the Project.

Step 2: For each of the Process Groups within the “in scope” categories, review each of the Processes to determine whether they are within the scope of the project. It is useful to visually show the results of your analysis. Depending on the purpose of your project, it may also be appropriate to indicate whether there is a gap in meeting requirements of the current processes.

Step 3: This last step is an optional one, particularly if speed is of the essence, but it is of great benefit because it provides detail for additional planning. Distinguish the strategic importance of the Activities that are contained within the Processes shown to be in scope are using colour.

Applying the APQC’s PCF – Example 2 – Process Documentation Project

When documenting processes, the PCF is a useful starting point; it helps:

  • Define the scope of your Project;
  • Define each of the processes being documented; and
  • Create an anchor structure for all processes within the organization.

The following steps are a guide to documenting your processes using the PCF:

  • Select the PCF version that best fits your business. Use the Cross-Industry PCF if nothing else fits.
  • Prepare a list of processes to be covered. Match your processes against those in the PCF by comparing the processes in the PCF against what happens in your business. Continually ask yourself what is missing – the PCF may have processes you may have not even considered.
  • Define the scope of each of your processes, in terms of:
    • What is the purpose of the Process?
    • How does it start and how does it end?
    • What Activities / Tasks does it include?
    • What happens next?
  • You can now map each of your processes, starting with the important ones first. Whether you are using IBM Blueworks or just Visio, you can link each Process Map to the list of Processes customised from the PCF.

It is recommended that you consider adopting:

  • The Business Process Modelling Notation (BPMN); and
  • A “Verb Qualifier Object” approach to naming your processes and activities

Finally…

As we have seen, the APQC’s PCF provides a useful starting point for many types of process related projects within your business, such as:

  • Assisting you to scope the processes in your project;
  • Helping you to identify and define the processes covered by your project;
  • Structuring the repository for your process documentation; and
  • Benchmarking the performance of your processes inside and outside your business.

So, if you’re unsure where to start your process related project or unfamiliar with documenting processes, then remember the APQC’s PCF is a good place to start! So, what are you waiting for?

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