Question

Classify following processes according to the Porter’s classification of processes (management processes, core processes, etc.). Explain the rationale behind the choice.
1. The process for handling requests from employees to take their annual vacation
2. The process for reimbursing travel expenditures to employees when returning from a business travel
3.The process for handling customer complaints (complaint-to-resolution)
4. The process for producing the annual report of the company
5. The process for recovering overdue payments from customers

Answer 1

Classification of processes:

According to Porter, there are three types of processes, core processes, support processes, and management processes.

1. core processes: Core processes are the processes that generate value to the business. It includes processes related to sales, marketing, service, distribution, and direct procurement.

2. Support processes: Support processes are the processes that provide resources to other processes. It includes processes related to finance, IT, HR, and indirect procurement.

3. Management processes: management processes refer to the processes that provide direction, define rules, and establish practices. It includes the processes related to strategic management, logistics management, supplier management, and warehouse management.

1. The process for handling requests from employees to take their annual vacation: This process is an HR-related process. HR is a support function in a business, so this process falls under support processes.

2. The process for reimbursing travel expenditures to employees when returning from business travel: This process is an HR-related process. It is the process to provide services to internal customers (employees). This process does not contribute directly to value creation. Therefore, this process falls under the support processes.

3. The process for handling customer complaints (complaint-to-resolution): The process for handling customer complaints is the process to provide after-sales service. This process is directly related to the development and creation of value. Therefore, this process falls under core processes.

4. The process for producing the annual report of the company: Process for producing an annual report is the process to plan, measure, monitor, and control the business activities. This process is followed to ensure whether support processes and core processes are fulfilling the requirements. Therefore, this process falls under the management processes category.

5. The process for recovering overdue payments from customers: The process of recovering overdue payments from customers is related to sales which directly affects value creation for external customers. Therefore, this process falls under core processes.