The Governance of Business Processes

Good business process governance is necessary for the success of business processes, which in turn are essential for business success. The term business process governance refers to the direction, coordination, and control of individuals, groups, or organizations that are at least to some extent autonomous, meaning that hierarchical authority alone is not sufficient to ensure effective performance. Business process governance, whether within or across organizational entities comprises a variety of mechanisms, including organizational structures (roles and units for performing and coordinating process activities), allocations of decision making authority, and procedures (e.g., review and approval processes). Governance mechanisms may be formal (i.e., formalized in writing or in law) or informal (e.g., not mandated). All governance mechanisms have pros and cons; some mechanisms are more effective (but also more costly) than others. The challenge is to design a cost-effective governance regime, which usually consists of designing several less costly mechanisms to work in combination. This chapter describes various governance mechanisms, identifies their advantages and disadvantages, and provides examples that show how governance mechanisms can contribute to improved business process performance.