Process-based management

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Process-based management is a management approach that views business as a collection of processes. The processes is managed and improved by the decisions and actions in purpose of achieving the vision, mission and values of the organization. The clear relationships between processes and a vision derive strategic plans, structure and sufficient resources required to achieve success.

The process based management regards the organisation as a system of vision-achieving vertical processes rather than specific activities and tasks of individual functions. In the process-centered organisation, an effective team network and knowledge of the vision are crucial factors for successful business.

The general management system focuses on tribal work-knowledge and direct solutions for cost and budget, on the other hand, process based management adds these performance measures but in one of effectiveness. As a result of recent advances in technology and increased international competition, many organisations have recognized a need for better methods of grouping and integrating organisational activities. (19:25)

The process approach continues to analyse the process performances and improve the activities by data and report. Implementing the improvements, the organization fulfills its vision and success it pursues to obtain.

Vision, Mission and Values[edit]

Process based management is a management system that aligns the vision, mission and core value systems of a business, when formulating corporate strategy.[1] Considering the vision, mission and value of their business, the organisation is capable of understanding their business processes and achieving a success in the future.

First, a vision is an aspirational goal what the organisation would like to accomplish in the long run.[1] The vision leads the company to challenge the tasks and develop business strategy; therefore, it effectively carries out its operation to reach their primary goals. Additionally, the vision motivates to build a structure of their processes, to determine a strategic plan and manage human resources for the organisation.

Mission is a core purpose of an organisation that remains unchanged over time. The mission provides a path, guides what decisions are made and what the actions are taken.[2] It is different from a vision in that the mission is something to be achieved whereas a vision is something to be pursued for the accomplishment.[3]

Core Values is a principle that helps companies to determine whether the actions and decisions are right or wrong. The value enables companies to fulfil their business goals and contributes to the firm’s long-term success.[4]

The vision, mission and values are crucial factors to mange an organisation from a process perspective. Considering these factors, the organisation determines the business processes they take into account, and improve the established process by judging the performances. The results reflect the vision, mission, and core values the organisation would like to achieve in the future. From a process perspective, it is not a method or tool that is applied to improve processes, but a holistic approach to time all the processes together in the organisation.[1]

Advantages of process-based management[edit]

  • Monitoring actual performances, the organisation improves their processes and performances over time. [5]
  • Focusing on control, customers’ requirements and continuous improvement, the organisation improves customer services which deliver value to its customers.
  • Implementation of the business processes assures results the company expecting to obtain.
  • A process based management system is not separate and independent implementations, therefore, an organisation operates its business in one of effectiveness. The system allows in one hand to identify the input and output of each processes, therefore it controls and defines the requirements such as personnel, technical, and financial resources in a holistic viewpoint.[6]
  • In an operational way, the organisation builds an integrated management system including customer satisfaction, quality security and environment of the internal processes as well as financial results such as revenues, profits, costs, and budget.[6]
  • Understanding of their business processes and correlations avoids taking wrong decisions. It reduces the costs, time and resources wasting on unnecessary things.[7]
  • The process provides an apparent framework to analyse sources of hazard and choose the appropriate decisions. Consequently, the organisation predicts risks and protects its weakness.[6]
  • Analysing processes and implementing new objects if required, the organisation deal with fast changes in demand.
  • Documenting a process provides a clear guideline for how that same process should be executed everywhere in the organisation. (Process Consistency)
  • The process based management system protects an organisation’s intellectual capital. It focuses on the development of processes and predicts the continuous results in a crisis. [7]
  • It improves the strategic planning and reduces unnecessary complexity to optimise performance of organisation. [7]
  • Sharing the process analysis, the organisation can improve IT system in purpose of supporting the execution of business processes. [7]
  • Process based management measures the full set of things that affect a business and it improves the quality of performance measurement.
  • Support staff to achieve success.

Three stages in process-based management[edit]

Documenting the process[edit]

To provide its management system with a process based approach, the organisation needs to know what defines the process and what activities they consist of.

Processes are determined by information indicating the current state of company and some research data such as satisfaction of customers. For example, it includes departmental documentation, customer-based agreements, purchasing manuals and process flow charts. (tutorialspoint) Importantly, all processes must be clearly identified and documented when applied to yield and clarify.

Additionally, process based management is required to be processed in an operational way, therefore the people or departments have responsibility and ownership for each constituent part of the process. [3]

The decisions and actions are taken to achieve a vision.

Analysing process performance[edit]

Considering the sequence of the processes, the organisation must be concerned with monitoring and measurement to find out the results against pre-determined objectives.

To monitor and improve the overall stage of process, the organisation establishes measures to evaluate the process. The measures are quantifiable metrics, comparative data and relevant benchmarks in order to obtain for relevant analysis. Consequently, process performance is possible to be monitored and improved upon the effectiveness and quality.

Utilising the relevant measurement, the organisation is capable of visualising the result with graphical representations, bar charts, pie charts, cause-and-effect analysis, and gap analysis. Those various tools specify the cand analyze the process performance and help the business to analyze the current state of performance.

Standardization of process, high dependence on data accuracy and continuous quest for sustainable improvements are crucial factors of analyzing the process-based management system.

Planning and implementation of Improvements[edit]

Process improvement is to improve and develop the process based on monitoring and measurement. It analyses how each process influences integration of quality and environment and sets new goals depending on the company’s strategic plans.

In order to achieve the vision of the organisation, its mission statement and its culture, the management system should deliver sufficient resources and commitment from the management team. Consequently, these efforts maintain and improve system effectiveness.

See also[edit]

  • Project Management
  • Value-based Management

References[edit]

  1. ^ a b c [1], Process Strategy Group. Introduction to Process Based Management: What every organisation needs to know about PBM [online]. UK:Process Strategy Group, 2010 [Accessed 12 October 2014]
  2. ^ [2], Business Dictionary [Accessed 18 October 2014]
  3. ^ a b [3] Rosam, I., Peddle, R. Creating a Process-based Management System for ISO 9001:2008 and beyond [online]. UK: The High Performance Organisation Group Ltd., 2008 [Accessed 10 October 2014]
  4. ^ [4] David F. Process-Based Management: A Winning Strategy[online]. Canada:Boeing, 2010 [Accessed 19 October 2014]
  5. ^ [5], Ward, M. What is a process and processed-based management system? [online]. Ireland: Netcoach, 2011 [Accessed 12 October 2014].
  6. ^ a b c [6] Badreddine, A., Romdhane, T.B., and Amor, N.B. Proceedings of the International MultiConference of Engineers and Computer Scientists. A New Process-Based Approach for Implementing an Integrated Management System: Quality, Security, Environment,"2009; 2:2-6
  7. ^ a b c d [7]. Leonardo Consulting. "Why Process-Based Management?"[online]. Australia: Leonardo Consulting, 2010 [Accessed 14 October 2014]

References[edit]

  • Shafer, S.M., Meredith, J.R. Operations Management: A process approach with spreadsheets. USA: John Wilry & Sons, Inc., 1998.
  • Viio, P., Groenroos, C. Industrial Marketing Management. Value-based sales process adaption in business relationship, 2014; 43(6): 1-42
  • Transition Support. Process based management systems[online]. UK: TransitionSupport, 2013. [Accessed 19 October 2014] Available from: http://www.transition-support.com/Process_based_management_systems.htm