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Function vs Department

A Function is Not a Department a Department Not a Function!

The term “Function” or “Business Function” is often incorrectly used to mean an organisation unit or department within a business.  People in the business will refer to the “Finance Function” when what they really mean is the “Finance Department”.

This misuse of the term leads to all sorts of confused thinking (and doing) and should be avoided.

The biggest misunderstanding arises when people talk about the disadvantages of organising a business around functions.  To those who do not understand what a function is, this might seem quite profound.  They do not realise that this is as ridiculous as saying that a business should not organise its doing around doing!


All data is created or transformed by Functions.  Every step in a Process is a Function.

So, contrary to popular misconceptions, it really is a very good idea to organise a business around business functions.  In fact, one of the best indicators of what a an effective and efficient business organisation would to be is a properly drawn Function Hierarchy.

So, does this mean that there is no need for processes?  Not at all.  Processes are needed in order to achieve required results within the business in response to specific triggers.

Processes are not there to overcome ineffective organistion structures!

More on Function Modelling.

More on Process Modelling.

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6 Responses to “Function vs Department”

  1. Jamie Knowles September 11, 2013 9:12 am #

    Really like this discussion but I might slightly disagree with what John says about capability in that he says
    “A capability is something that the organisation is capable of doing, for example, the capability to produce 1,000 units of a product per minute, hour or day.”.

    My argument is that the capability is something the organisation is capable of doing such as “orange juice production”. The “1000 litres a minute” part is separate and a non functional requirement which would be associated with the capability.

    Often we would wrap the capability in a Service where we can then add the interface that the capability can be accessed via, the functions that the capability (service) can deliver and the contract or service level agreements that govern access to the capability (service).


    • John Owens September 11, 2013 9:41 am #

      Hi Jamie

      Thanks for the comment. I believe that, in order to make a statement of capability truly meaningful, such things as volumes, etc. must be included. If an enterprise had the capability to produce orange juice at a volume of just 1 litre per day and to a standard the would not allow it to be sold on the open market, then saying that ‘Orange Juice Production’ was a capability for that enterprise would be a nonsense. All capabilities must be capable of being stated in terms that allow them to compared to market or sector needs and demands.

      I also do not agree that these qualifiers are non-functional. I would suggest that they are an integrated part of the function. If we were to look at the capability to ‘practice law’, the functionally of this could be very different in different countries, even in different states.

      Using qualifiers really fine tunes statements of capability. It turns them from loose (and mostly meaningless statements into very tight definitions that that can be matched to markets, resources and skills.

      Again, thanks for the input.


  2. Ravi February 20, 2012 8:05 am #

    yes.. it does help.. what’s the difference between division and department? product line and product portfolio? capabilities and offering?

    • John Owens February 20, 2012 7:55 pm #

      Hi Ravi

      In answer to your questions:

      A “division” generally is used to refer to 1) a large subdivision of an organisation, for example, the European Division or 2) a large self governing sector of the organisation, for example, the Engineering Division.

      A department tends to refer parts of the organisation created for the purposes of carrying out a specific group of tasks under one manager, for example, the Finance Department. This would not be self governing.

      Product line is a single product or variations of a single product, for example, televisions could be a product line.

      Product portfolio refers to the entire catalogue of products that an organisation create or sells.

      A capability is something that the organisation is capable of doing, for example, the capability to produce 1,000 units of a product per minute, hour or day.

      An offering is a vague term and can mean many things. Hoewever, it tends to mean some product or service that an organisation or individual is offering for sale or proposing as a solution.


  3. Jan van Bon August 24, 2010 1:33 am #

    I totally agree that so-called experts often ignore the crucial role of definitions. And I’m also going along with a lot of what you say.
    I have a question for you: can you (in clear definitions terms) explain the difference between a Function and a Functionality?

    • John Owens August 28, 2010 6:31 pm #

      Hi, Jan

      Thank you for your comment. The difference between a Function and Functonality?

      A Business Function (or Function) is a core activity of an enterprise. It is something that the enterprise must do in order to meet its objectives and continue in existence.

      Examples, of functions would be, “Sell Product to Customer”, “Bill Customer for Products Delivered”, “Recruit Employee”, etc.

      “Functionality” is a general English phrase that is generally used when referring to a computerised system in defining what Business Functions the system fully or partly supports.

      Does this help?


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