In today’s economy, processes are constantly evolving as organizations seek new ways to reduce cost, improve operations, increase productivity and eliminate waste. To achieve these desires, an organization has to design and implement effective process management initiatives.
There are many definitions of process by many process management experts According to Boutros and Purdie (2014), a process is a set of activities that use resources (people, system and tools) to transform inputs into value – added outputs.
Seppanen et al defined process as a series of value added tasks that are linked together to convert inputs into a product or service to an output
Again M. Dumas et al. defined business process as, a collection of inter-related events, activities and decision points that involve a number of actors and objects, and that collectively lead to an outcome that is of value to at least one customer.
In Harvard business review, process is defined as the series of events that bring together people,
technology and information in ways that create valuable output.
The underlining factors in all these definitions and more are
i. Processes require inputs; the inputs may be information, intellectual, material, technology, etc.
ii. Processes involve activities; these activities may be manual or technological, monitoring, measurement and control activities, activities etc.
iii. Processes require decision making; even the act of not deciding anything is a decision making
iv. All processes yield outputs. The output may be the intended output in which case the process is said to be effective or it may be an unintended output and the process is said to be ineffective.
Importance of Effective Process Management
Effective process management is a very critical asset that guarantees serious competitive advantage to organizations that have process – mindset. It has direct impact on the attractiveness of products and services as perceived by the market. It determines tasks, jobs and responsibilities and by this, shapes the work of every employee. It is the life blood of any organization.
Processes integrate systems, data, and resources within and across organizations and any failure can bring corporate life to a standstill. Processes determine the potential of an organization to adapt to new circumstances and to comply with a fast growing number of legislative requirements. Processes influence the revenue potential as much as they shape the cost profile of an organization.
The Reality
Despite the great importance of this asset, unlike other corporate assets such as products, services, workforce, brand, physical or monetary assets, the significance of business processes had not been appreciated for a long period. Despite the fact that processes are the lifeblood of an organization, they did not develop the status of a primary citizen in boardroom discussions and managerial decision-making processes.
This is so because many decision makers are oblivious of the great value that effective process management adds to the bottom-line, they do not understand that the singular thing that can pull their organization out of business is ineffective and inefficient process management.
Example
If your company sales and fails to collect money, the order to cash process will need to be reviewed;
It customers abandon your products or services as a result of late delivery, the order to delivery process will need a second view;
If you have variations in your product, the production process will require some tinkering;
If after sales your sales expenses is higher than your margin, then we need to look at your sales process again
If you generate wastes which reduces you overall profits, then you need to look at your production or service delivery process.
Efficient budgeting process is very essential for resource allocation and utilization
Your hiring process impacts greatly on the caliber of workforce that you have in your organization
In all these and much more it is Process! Process!! Process!!!
In fact, the major thing that separates one organization from another, with equal financial muscle, is the level of effectiveness of the processes of the organizations.
To be continued in the next edition. Just follow us.