An organization should always work to integrate its business processes with value chain. Each business process needs to be integrated with value chain which focuses on executing specific strategy that enables the organization achieve competitive advantage.
Porter defines value chain as those activities and processes that enable an organization achieve competitive advantage by adding value at every stage of the organization’s business processes (Recklies 2001, 1). On the other hand business process is a set of related, structured activities which are designed or employed to achieve a certain goal. This can be producing particular product(s) or service. This means that Value Chain defines the actual business processes which have been undertaken by an organization (Callarman, Feller & Shunk 2006, 1).
Business processes are categorized as management, operational, as well as, supporting processes. Operational processes comprise the core business and include activities such as manufacturing, marketing, sales, purchasing among others (Anderson 2009). The aim of organizations is to create the key value stream in each of these business processes as well as in strategic management, corporate governance and other support services.
Value chain ensures that the organization optimizes each business processes along the chain of activities to achieve efficiency by implementing a strategy in a way that gives the organization competitive advantage.
Even though business processes could be the same across competing companies, value chain ensures that the company adopts strategies which enable it add value to its products at every stage of production in a way that the competitors can not easily duplicate. The term operational effectives as used by Porter implies that each individual business process has to be made as efficient as possible.
Business processes defines each stage of production, management or organizational processes. It defines the internal control processes or tasks and technologies adopted by the organization in its business activities. Value Chains on the other hand allow an organization to measure the results of its chains, and as a result, use the measure to assess the results against its internal business processes.
Both business processes and value chains employ technologies in each process to achieve competitive advantage. Organizations refine their Value Chains in each business process by use of new technologies such as ERP so as to satisfy the changing customer demands and to keep pace with the trends in the market.
Companies conceptualize their organizations as places of competition, and therefore refining their business processes by applying Value Chains has become very important in satisfying customer needs (Brache & Rummler 1995, 68). Thus, both Value Chains and business processes identify the customer as the target for the products or services offered by an organization.
Value Chains enable organizations to standardize their business processes. The aim of each business process is to achieve an overall effectiveness in obtaining the outputs at that level of production. New technologies adopted at every level of Value Chain can produce outputs within the shortest time possible and improve the quality of the products (Davenport 1993, 126).
Business processes and Value chains although different, have close relationship as they are employed to enable organizations conduct its activities in such a way that enable them satisfy customer needs, and achieve competitive edge.
Reference List
Anderson, C., 2009, What are the top ten core business processes?, Bizmanualz. Web.
Brache, A. P., & Rummler, G. A., 1995, Improving performance: How to manage the white space on the organizational chart. San-Francisco: Jossey-Bass. p. 68.
Callarman, T., Feller, D., & Shunk, D., 2006, Value chains versus supply chain. BPT Trends, 1-7. Web.
Davenport, T., 1993, Process innovation: Reengineering work through information technology. Boston: Harvard Business School Press. p. 126.
Recklies, D., 2001, Value chain. Web.