Our organization’s structure can confound what constitutes and output.  Consider the company that is structured as a “functional” organization, the output from one group will typically go to another group in the system.  This organization structure is sometimes referred to as “silo” since each part of the company, group or department is segregated by expertise.  This has the benefit of developing that individual area of expertise. However, it comes with some negatives also.  The experts may know their part of the work, but they may not know the details of how their output is used by the depending group (the group that uses their output as an input).  We will call these outputs “intermediate outputs”. That is these outputs are not the final incarnation to the final customer but outputs that are actually inputs to this depending process. See illustration:

SIPOC Illustration

In the example above, Organization A is the supplier for Organization B.  We can also see that the output from Organization B is the input to the next part of the chain or Organization C. We can call these intermediate outputs as these do not go to the end customer however, the quality of these deliveries impact the quality of the final product.

If we are a project organization, that is an organization where the group consists of all aspects to deliver the product in one group, the output from one member of our team then becomes the input to another team member (the same thing only different). In our previous example, our Systems level specifications could generate software specifications from the next person rather than a depending organization.

We can see organization structure has implications on the way the work is performed, however, the same SIPOC approach makes possible the understanding of the constituent parts of the system and those interactions.