Management by processes

economic-dictionary

Process management is an approach that considers an organization to be a network of related and interconnected processes. Therefore, it is the way to manage an organization based on the processes that are carried out.

Undoubtedly, a process is a sequence of activities that aims to add value to an input to achieve a result or output. All output must satisfy a need or a requirement of the internal or external customer of a company.

Of course, any process, whether simple or complicated, large or small, must have an input, a transformation and an output. The input is any resource or input that must be transformed. Transformation is the work process that adds value to inputs and gets a result. The output constitutes the final result, such as the good or service that satisfies a need.

In addition, process-focused management is in contrast to the traditional structure of function-based organizations. The fundamental idea is to add value to internal and external customers. For this reason, the continuous improvement of all processes is sought through their identification, description and documentation.

How do you know if an activity is a process?

In fact, not all the activities carried out in a company can be considered as a process. To consider an activity as a process you must:

1. Have a clear mission and purpose

Each activity classified as a process must respond to the mission and purposes established by the organization. These activities must respond to what the company expects to be done.

2. The activity must be precisely defined

All members of the organization must know precisely how each process should be carried out. Even when a new employee is hired, you can have access to documented sources that indicate how each activity is carried out.

3. It must contain inputs and outputs

Of course, every process must have an input of inputs or raw materials that must be transformed into a final result. This result is what is known as the output of the process that adds value for internal and external customers.

4. Suppliers, customers and a final product can be identified

Naturally, the suppliers will be all those who supply the inputs or raw materials to carry out the process. The client will be the recipient of the good or service generated. While the final product is the output of value that the process generates.

5. The activity can be divided into tasks or sub-processes

Each process may have one or more tasks that will be carried out by one or by a group of people responsible for its execution.

6. Can be documented

All these activities can be documented using a process management methodology, defining times, resources and costs. All this documented record ensures compliance with quality standards.

7. Has assignment of responsibilities

Certainly, a process is subdivided into tasks that must be carried out in a department or in several departments of the company. Each activity must add value to internal customers, if we are talking about a sub-process, or external, if it is the final stage of the process exit. At each step there must be a person in charge of each of the exits.

Why is it important to be process-based?

It is logical to assume that process management defines the processes that must be carried out in a previously structured way, continually reviewing them to find opportunities for improvement. This, since, if the processes of an organization are continuously improved, it helps to improve the total function of the organization.

Indeed, the focus on processes allows a comprehensive vision of the operation of the company in general and globally. It also recognizes that the company must have a horizontal structure to respond to a cycle of the process in a complete way.

Additionally, all processes seek customer satisfaction. When talking about a micro process, it includes only internal processes that satisfy the needs of internal customers. Now, a macro process includes both internal and external processes to satisfy internal and external customers of the organization.

Similarly, with the focus on processes, the company will be able to achieve a competitive advantage, since this type of administration prioritizes customer satisfaction. This means that companies are forced to maximize their efficiency. Consequently, it is imperative that organizations seek continuous improvement of their processes and, in turn, of the company in general, offering better solutions to customer problems.

Advantages of process management

Process management has the following advantages:

1. Reduce unnecessary internal costs

To begin with, the company can reduce unnecessary costs within its processes, since it can eliminate tasks or steps that do not add value. Therefore, if unnecessary steps are eliminated, costs are also eliminated.

By eliminating non-value-adding activities, the process becomes more precise and the company can focus more on meeting customer requirements, needs, and expectations. All together it saves resources such as time, money and human effort.

2. Shorten delivery times

Then, lead times or lead times can be shortened by identifying process cycle downtime. For this reason, processes are eliminated and streamlined.

3. Improves the quality and service perceived by the customer

On the other hand, by improving the quality and service offered, the client better satisfies their needs. Making customers like to maintain a relationship with the company.

4. Incorporate additional service activities

Likewise, this approach makes it very easy to add additional customer service benefits. These aggregates of services have a low cost and are easily perceived by the client.

Management by processes
Advantage

Characteristics of organizations that use process management

1. The process predominates over the structure

In the first place, companies that apply process management consider that the structure of the company is nothing more than the infrastructure to carry out the processes. Therefore, they give relevance to the processes and the strategies are designed based on the processes.

2. Its organization is transversal

Second, process management makes organizations configure themselves as a set or system of processes and sub-processes that allow the achievement of objectives. The main objective of all processes is to generate value for the customer.

3. Use of the information

Third, organizations place a high value on information about the different processes and activities that must be carried out. The constant flow of information is essential to operate successfully in all processes and in the general operation of the company.

4. They are generators of value

Finally, organizations that apply management by processes are value generators. For the same reason that it is process-based, each output is an added value through the products and services they offer. And this is the fundamental purpose of any process.

Management by processes
Characteristics of the companies that use it

Process management steps

The most important steps to implement process management are:

1. Information, training and participation

Process management is a new way of managing. Therefore, it is essential that everyone is informed and trained before implementing the processes. In addition, everyone must be informed about the objectives sought by the process, what its stages are and what collaboration is required.

2. Identification of processes

Of course, the processes must be clearly identified. For this reason, a list of all the processes that are carried out must be made. Each process must have:

  • A name.
  • The activities and steps you must take.
  • A process map.

3. Selection of relevant processes

It should be noted that the relevant processes are those that add the most value and are very important for the company to perform efficiently. For this reason, they have a significant impact on the strategic objectives of the company.

4. Establish a responsible

Once the relevant processes have been identified, they are assigned a manager. The responsible person must have the responsibility and autonomy necessary to fulfill the strategic objectives.

5. Process analysis and problem detection

Each process is analyzed, whether or not it is meeting the proposed objectives. If any of them do not meet them and present a problem, they must be redesigned appropriately.

6. Correction of problems

Once the problems that have the greatest impact on the objectives and customers have been identified, a solution is sought for them. This, defining the actions that must be followed so as not to affect the performance of the process and the organization as a whole.

7. Use of indicators

Finally, the processes will be evaluated periodically. It will depend on this evaluation if they are complying with the proposed indicators. The indicators are very important to analyze the real performance of the processes and to be able to determine the weak points. All this, in order to apply corrective measures.

To conclude, it can be said that process management increases the efficiency of organizations. This, because its success will depend on the adequate execution of its processes, which must be clearly documented. But, above all, they must be aimed at generating value for the customer.

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