Saturday, April 15, 2006

Achieving quality through managing business processes

Management of business processes is definitely the most important and practical subject matter to get quality happen in all kinds of organizations. Proved practices, however, demonstrate that although process management is an incredibly simple thing, its implementation seems incredibly difficult because it always puts a strain on the company's leadership issues. Development of the business processes and their management is a long-term effort and should take into account realities of business environments in question.

Systematic process ideas were used already in ancient plant and construction activities. The concept is also often referred to in cases of natural development. Through industrialization processes became an everyday concept in so called process industry. From 1980’s process approach has been used for computers’ internal activities according to structured analysis and design technique (SADT). However, in a large scale business process approach has been used comprehensively for the benefits of business management only for less than twenty years, and during that time a lot of practical means have been developed for managing business processes. In these approaches, especially learning from system theory and system dynamics was used. To the quality management standards ISO 9000, process concept was introduced in the 1990’s.

Processes in general adhere always to all kinds of doings or activities. In fact, originally the process concept just denotes any kind of activity or operation. When these activities within an organization are linked together to achieve organization’s business results, one may talk about business processes. Organization's business processes is an orthogonal dimension to organizational structure. Organization's overal business performance is the result of managerial solutions both in processes and in structures, however, naturally the the structures should support the processes.Structural questions of business processes have become an interesting management issue in order to increase effectiveness and efficiency of the business operations. In some cases, however, there has been a danger that structural aspects, e.g. formal process diagrams, were being harmfully over-emphasized in process management.

Due to its business significance, process management is a comprehensive business management issue by its basic nature. Today, however, truly effective and efficient process management implies a radical change to the established management thinking and structures in many organizations.

Major motivation in organizations for strengthening process-focus in business development is based on the following objectives:

  • Focusing through the whole organization on customers and aiming to fulfill customer-needs competitively
  • Avoiding problems of company-internal interfaces and responsibilities: operating effectively and efficiently, ”smoothly”, through the whole organization
  • Making human quality (i.e. individuals and teams) development effective based on the needs real process activities
  • Enhancing process-innovations in addition to product innovations
  • Getting benefits of real options from process-based investments

All business results are achieved through managing business processes and projects. Basic (or core or key - different terms are used in different organizations) business processes imply continuously running interlinked business activities, and projects are singular processes for unique business tasks.

Both strategic and operational management are needed in a comprehensive process approach, the strategic one focusing on managing the network of inter-linked business processes as a whole business system, and the operational one on managing single processes and projects.

Most practical means to support organization-wide management of business processes are:

  1. Process plan for managing each single business process
  2. Business process framework for managing the whole system of business processes within an organization
  3. Procedure document defining the principles, responsibilities, structures, and practices being used for process management in an organization

Business processes are managed within an organization through strategic and operational decisions and methodologies by responsible business people. However, business processes are to interact with external actors that are not necessarily under contol of the organization. Especially modern flexible and dynamic business environments set challenging requirements for managing business processes. In fact, business processes are complex responsive processes of relating.


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