Abstract
Business process management (BPM) aims to help organizations manage their business processes. Startups differ from established firms as they go through different phases of prospecting, developing, and exploiting the new venture. Startups begin to focus on the organization of their processes after they reach the exploiting (scale-up) phase. Digital startups are unique as information technology (IT) becomes the business model itself. These unique characteristics raise a question: how do digital startups at the scale-up phase manage their business processes? To answer the question, two case studies on digital startups in logistics providers are conducted. The case studies are designed to be inductive in nature. Grounded Theory Method (GTM) is used for data collection and analysis. Data is collected via interviews and supporting documents. The BPM capability provides the basis to create guiding questions for the interviews. The interview results are analyzed with a grounded theory approach of open, theoretical, and selective coding. To derive a new theory, cross-case analyses are conducted. Findings from two digital startups allow us to identify important categories that play a role in how digital startups manage their activities: industry and stakeholders, digital offerings, organic structure, process management, performance measurement, employee training and culture. We further theorize that the competitive nature of startups makes them customer-centric and focus on agility. Digital startups continuously improve their product and conduct adaptive process experimentation involving a cycle of process identification, IT-based process implementation and process adaptation. The supporting capabilities that enable the process management of digital startups are agile people and culture and organic structure.
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The authors acknowledge the contribution of Prof. Jan Mendling from Humboldt-Universität zu Berlin, who provides insights into the ideation of this research.
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Appendices
Appendix A: Guiding questions for interviews
Code | Question |
---|---|
BG | How was this startup originally built? What is the drive/background, what ideas/solutions do you want to develop? |
P1 | How are startup activities and work developed? |
P2 | Are the inputs, activities, and outputs of all jobs identified and documented? For example, through SOPs |
D | Is there an information technology (IT) system that supports startup activities? |
C1 | What is the mechanism for evaluating the performance of startup activities and work? |
A1 | How is the achievement of performance targets (KPIs, etc.) of organizational activities followed up? |
A2 | How is innovation/improvement of activities and work carried out following existing developments? |
PS1 | How are activities and work related to organizational strategy? |
PS2 | How does organizational strategy translate into objectives used to manage activities and work? |
ER1 | How do startups build relationships with stakeholders (customers, suppliers, investors, and other partners)? |
ER2 | How do startups know and understand customer expectations? |
RR1 | How are the tasks and responsibilities divided at startup? |
RR2 | Is there a process management team dedicated to structuring, analyzing, and improving startup activities and processes? |
ST1 | What is the team's ability to manage activities and work? |
ST2 | Is there training for the team on a specific activity or job? |
V2 | How is the startup's commitment to change, continuous process improvement, and innovation? |
AR1 | What is the mechanism for hiring, developing, and rewarding startup teams? |
AR2 | What is the basis for awarding? |
TM1 | Is there an executive team responsible for managing a process-oriented way of working? For example, chief process officer |
TM2 | How does the startup's executive team view manage activities and work? |
OC | Does the startup have an organization chart that explains process-oriented roles? Are activities and jobs explicitly displayed in the org chart? |
GB1 | Are there teams/units that support innovation, change, and implementation of activities/work? |
GB2 | Is there a role/unit within the startup that is responsible for the overall performance of the organization's activities and work? |
Appendix B: Interviews, interview findings and integrative memo
Appendix C: Axial coding Lisy and Rise
Lisy concept or category | Main category | Rise concept or category | Main category |
---|---|---|---|
Process discovery by understanding the problem and its root cause Brainstorming with users Shadowing method and quantified survey | Process origin | Process determination based on logistic common practice | Process origin |
No business process architecture Reactive preparation of business processes | |||
Process documentation Business as usual has been documented SOP in the form of bullet points and basic flowcharts Documentation changes are made on the go SOP evolves following the problems being addressed SOP per department SOP changes by supervisor, manager, head, and C-level Process hierarchy in the form of a flowchart | Process management | Innovation based on customer demands | Process management |
Multiple participants are required for unique customer requests | Project initiatives New features based on customer needs Business development | ||
Dividing big problems into small problems (Divide and conquer framework) | Inter-departmental collaboration | ||
Product management Project (initiative) Worked with a cross-departmental team Improvement by the product team | Project management Application development project led by product manager Product management is more structured Non-application project led by the initiator | ||
Operational department processes The Ops team division based on order type Dedicated management by field operations On-call managed by operations manager Project managed by planner ops Workflow documentation every time there is a new shipper Preparatory meeting every time there is a new project | Order management Regular order management (routine) Bidding scheme Project-based order management | ||
CEO is still doing technical work | |||
RACI matrix for each process | |||
Process formalization triggers Customer demand Potential strategic initiatives | |||
Root cause analysis | Process improvement | Not all divisions carry out process improvements | Undisciplined process improvement |
Sprint retrospective | Continuous improvement has not been done | ||
Post mortem analysis | Decentralized process improvement | ||
Pillar of customer-obsessed to find out the satisfaction of customer problem-solving Net promoter score (NPS) | Process evaluation | No process evaluation Goal-oriented No process assessment Measurement of the results of a process Focus on business KPIs | Improper process evaluation |
Weekly review (meeting) | |||
Frequency of evaluation as needed SOP review every month | Reactive process evaluation Process evaluation frequency as needed Monthly review | ||
KPI from shipper SLA | |||
Process evaluation and improvement occur very quickly | |||
Open communication | Culture | Open communication | Culture |
Open mentality to any input | |||
Open to team ideas | Freedom of change | ||
Growth mindset | |||
Learning by doing | |||
Internal promotion of potential junior employees | |||
Adaptive | |||
Agile | Fast-paced | ||
Three main functions Commercial (product sales to customers) Sales (search customer requests) Transporter management (search for suppliers/transporters) Operational Control tower and customer service as monitoring team and front liner Proof of delivery as an inspector of travel documents Field operation as the coordinator of the loading process at the shipper's location Allocation as a truck unit finder Head-manager-employee Export–import department Management of meeting customer needs Product Product Search for problems and solutions Product manager understands customer problems and needs Product managers have their own domain experts Engineering as a platform developer Back office Finance People operations | Organizational structure | Divisions Operations Transport sourcing Control tower Field operations Proof of delivery (POD) Transport management Service Excellence Data Customer experience Operational excellence Finance Account management Business development IT Product Engineer HR | Organizational structure |
Incomplete leadership position Reporting to the position above it Number of people that can be coordinated Capability or capacity issue | Leadership level inconsistency Effect of job scope Promotion Initial position offering | ||
Head-manager-supervisor-employee | Team naming inconsistency | ||
The structure evolves according to job specialization needs Rapid change in organizational structure Outside pressure on customer demand Inside pressure on high costs and resources | No special function that manages the process | ||
Chief process officer Analyst (associate) in product function Analyst (associate) attached to a certain position Project management office (PMO) ensures efficient problem solving Operational excellence in commercial function Manager in back office function | Three times organizational restructuring in a year HR and finance approval Informal C-level approval | ||
External consultant Business advisor Filling the leadership vacancies | Team formation follows the leader specialization | ||
C-level CEO CTO CFO | |||
Basic training | Employee training | Product knowledge training | Training |
Skill training | Soft skills training initiated by each division | ||
Specific training Based on the competency mapping framework | Employee onboarding | ||
Services expansion to the export–import sector based on customer needs | Services | Software as a service (SaaS) | Services |
70% of orders via WhatsApp | Trucking marketplace | ||
Innovations in ordering processes, unit search, order tracking, and assistance supported by technology | |||
Objective key result (OKR) Have not implemented OKR in 2019 The organization is still too small OKR each team member OKR is derived from the organization's vision and mission Performance development and discussion every semester based on OKR | Performance measurement | Index performance plan (IPP) | Performance appraisal |
Reward for achieving milestones (ad hoc) | Rewards | Index performance review (IPR) | Rewards |
Reward for performance achievement (routine) | KPI achievement | ||
The sales department has a reward system from the beginning | Certain project | ||
Reward in the form of playing together at the beginning of development | |||
Engineering department has a reward system in the first 6 months |
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ER, M., Mulyono, N.R.P., Rentio, I.A. et al. How do digital startups manage their activities? Insights and opportunities for business process management. Inf Syst E-Bus Manage 22, 557–598 (2024). https://doi.org/10.1007/s10257-024-00683-1
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DOI: https://doi.org/10.1007/s10257-024-00683-1