So now that we have talked about business process, let as switch gears slightly and take a look inside the company itself. So here's a quick view of the different departments that might exists in a typical company. First of all, we have the sales and marketing department and what they are in charge of, as you might have guess, would be to handle sales orders coming in from customers at the same time, they are in charge of marketing which is to make customers aware of the products and its features that they are selling. The next department that most companies will have is a human resource department, and a human resource department is largely in charge of the hiring of employees, the training of these employees, and also more importantly, the tasking of this employees on different responsibilities. The third common function that a company has, is a production team and what a production team is responsible for doing, is basically to manufacture and to produce the goods. Every company would also have a finance and accounting department and what the finance and accounting department does, is to ensure that the company is in good financial health. They are also in charge of reporting the revenue and also the expenses that has been incurred by the company. Finally, we have the procurement department and what the procurement department does in a company, is to buy and purchase raw materials so that the company is able to produce goods. At the same time, the procurement department would also be buying daily supply so that the offices could run. For instance, they might be looking at buying paper, they could be buying computers for employees. A very common thing that businesses face is this issue of a silo effect and what a silo effect means is that each of these departments, they tend not to talk to each other very much. Some of the things that we might think of why a silo effect happens, is as follows. As a company gets larger and larger, there might be more and more different small business units. In order for a company to function well, each of these business units has to specialize on a particular area that the business is involving. As a result of this specialization, employees within a department tends to know what they are supposed to do very well, but they do not quite know what others are doing. At the same time, there's this issue of different incentive schemes given to different departments. Let me give an example of how this might happen. For instance, in the sales manager of Apple, he might be very much driven to sell as much iPhones as possible because his bonus is tied to that. So as a result, the forecast of sales he might be giving these order to his sales team saying that, "In the next quarter, let's try to secure a 100,000 new iPhone sales to our customers." However, the production manager that is in charge of producing and manufacturing these iPhones have a very different goal altogether. He might be pretty much responsible for the smooth production of high-quality phones. He has to be sure that his workers are not overwork, his machines and his factory are able to operate on a day-to-day basis. Knowing that this factory could only produce at the maximum 50,000 units of iPhones in a particular quarter, he might have a very different goal from what a sales manager have. As a result of this different goals, they might be, if they were to do different things at the same time, this would cause the business process to collapse. Right? So in order to solve issues of the silo effect, one major solution would be to have the company to have a process oriented view of the organization. In this case here, the sales department needs to know what are the goals and what are the strategies utilized by the distribution department and similarly, the folks working in the distribution department needs to know what are the goals and milestones that the sales department has. At the same time, all of this activity has to make sense in the financial perspective. That is, all of these activities have to be profitable. So a process oriented view of the organization simply means that information between these different department has to be flowing seamlessly. So that everyone knows exactly what our departments are doing.
