Function (Business Function)                                                           Work in Progress

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From Ron B Palmer's Wiki     Home > ITSM > Definitions > Function

 

Introduction

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The term business function is widely used in business literature but rarely defined.  In fact it is almost impossible to find a clear definition of a business function through a current google search.  ITIL provides a specific definition of the term but then often confuses the term with process in its text.  This creates some fundamental problems when discussing the differences between a functional organization model and a process organization model.

 

Rummler & Brache (1995) say this about functions:

"... we have used 'department,' 'unit,' and 'function' as synonnous, which they are, in common parlance.  In the field of Organization Design, 'function' refers to a grouping of similar work.  So, the human resource and distribution departments are functions: the plastics business unit and the European division are not."  They discuss the idea that functions are examples of vertical organization. 

 

In the business world the term function is best understood in relation to functional departmentalization (FD) as an element of organizational design or organizational strategy.

 

Wikipedia defines different types of departmentalization with functional departmentalization being one of them:

Functional departmentalization - Grouping activities by functions performed. Activities can be grouped according to function (work being done) to pursue economies of scale by placing employees with shared skills and knowledge into departments for example human resources, IT, accounting, manufacturing, logistics, marketing, and engineering. Functional departmentalization can be used in all types of organizations.

 

 

 

Understanding Business Functions

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Functions in business terms are units or departments of the business that have been organized primarily based on specialization of labor, knowledge, and equipment.  Business functions tend to have the following characteristics:

• have outputs related to their specialization
• organize around skill sets
• organize around specialization of labor, knowledge, and equipment
• organize resources, e.g. people, equipment, facilities
• define who reports to whom
• provide for deep technical or operational expertise
• promotes full utilization of current technical skills
• enhances operating efficiency where tasks are routine and repetitive
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Disadvantages or functional organization:

• creates communication barriers
• functional goals override business goals
• turf wars, conflict
• inflexibility
• functional efficiency over business efficiency
• poor strategic coordination across functions
• strong functional loyalties
• communication funneled through higher management
• tunnel vision, overspecialization
• discourages crosfunctional management experience
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Functional departmentalization (FD) is one of several methods for organizing business activities.  As with any type of departmentalization FD has many advantages and many disadvantages.  Organizations should not expect to function efficiently if they rely purely on FD to meet business goals.  One commonly accepted method for overcoming some of the limitations of FD is Project Management.  Large projects tend to require skills, communication, and resources that span functions.  Establishing project management structures and assigning project managers enables organizations to more successfully implement projects that span functions.

 

IT processes in support of business processes span business functions as well as internal IT functions.  Typically, IT departments have not been very good at identifying strategic processes and ensuring that they are prioritized appropriately.  The result has been wide variability (poor quality) in IT strategic process outputs and the resulting business dissatisfaction with the IT function.  Beginning in the early nineties companies began to understand the importance of defining and manageing strategic processes in addition to maintaining their traditional form of departmentalization.  It is high time for the IT department to get with the program and begin actively managing strategic processes.

 

Processes are as distinct from functions as are projects.  Functions should be thougt of as organizing who does the work, reporting structures, maintenance of specialized knowledge and skills required to perform the work.  Processes are a way to describe how the work gets done by identifying the entire sequence of steps required to produce the desired output and where the specific functional resources fit into the flow of work.

 

A process based organization will maintain departmentalization while also focusing on how the work gets done.  While departmentalization by process can be done, it has its own limitations that must be addressed.

 

Outputs of functions are related to the skill sets that define the function.  Functions are not necessarily defined based on their outputs. (processes are defined based on outputs)

 

 

ITIL's definition

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A team or group of people and the tools they use to carry out one or more Processes or Activities. For example the Service Desk.

 

 

The term Function also has two other meanings

·         An intended purpose of a Configuration Item, Person, Team, Process, or IT Service. For example one Function of an Email Service may be to store and forward outgoing mails, one Function of a Business Process may be to dispatch goods to Customers.

To perform the intended purpose correctly, "The computer is Functioning" 

 

 

 

See Also

Process

Functional Departmentalization

 

 

 

 

 

References

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Rummler, Geary A., Brache, Alan P. (1995), Improving Performance: How to Manage the White Space on the Organization Chart, ISBN: 0-7879-0090-7

 

 

Working notes

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purposeful function - public safety, fire, IT

"building core competencies and organizational capabilities that rivals can't match is one of the best ways to outexecute them"

-- Thompson & Strickland, (1992) Strategic Management: Concepts and cases, sixth edition