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 PROCESS MANAGEMENT A professional
process approach is a great opportunity for all organizations to
enhancing the effectiveness and efficiency of business performance
and realizing a modern professional quality management and assurance.
This document highlights: Topics include
general guiding ideas and principles of process management, development
stages of the process approach, business processes within the enterprise
and networked commerce facilitating performance growth, process
management model for realizing process management within business
management, quality integration through processes, documentation
for process management, process performance, people issues in process
performance, process performance evaluation and improvement, and
comprehensive enhancement of the business process approach. General framework for the process management
approach Processes adhere to all daily doings or activities within an organization. In fact originally the process concept just denoted action or operation. Later structural questions of processes became an interesting management issue for increasing process efficiency. In some cases, however, there has been a danger that structural aspects are being over-emphasized in process management. Business structure and business processes are orthogonal issues to each other. Processes should be primary issues and structure, e.g. organizational chart, a secondary one. Process management
is a comprehensive business management issue. Today truly effective
and efficient process management implies a radical change to the
established management thinking and structures in the organizations.
Figure 1. Mental
framework for developing an integrated process management approach The mental framework
(see figure 1) of a learning organization provides a good model
for an effective understanding and development of process management
as a company-wide approach. This framework consists of guiding ideas
and principles, management tools and methodology, and managerial
infrastructure for process management. In general, business management is realized through process / project management. In fact, projects are singular processes for singular business tasks. Basic business processes imply continuously running business activities. A major challenge for the top management is to convert a traditional vertically emphasized hierarchical organization into an approach consistently and effectively strengthening horizontally interlinked and interacting activities (i.e. business processes). Both strategic and operational management levels are involved in this approach, the strategic one focusing on the network of processes (i.e. the whole business system) and the operational one on single processes and projects. The modern business
environments require especially understanding organizations as complex
responsive processes of relating. Development stages of the process approach Organization-widely networked processes A comprehensive
system of business processes covers the whole organization, and
all work is done through processes. Thus, processes are the basis
for the results, growth, and success of enterprises. In fact, the
value-adding ("win-win") interaction and transactions
between organizations and their interested parties take place through
processes. The new e-business requires a more systematic methodology
for processes than before. Even the quality of public services and
quality of the society are originated in the processes of the different
organizations within the society.
Figure 2. A strategic
management process. It has a crucial role in business management Process management within modern business
management Business management
is based on a vision (business leaders' dreams) and prevailing internal
/ external reality and aims at creating a business structure to
realize the company's strategic and operational needs (plans) (see
figure 2). Efficient action calls for suitable structure. According
to the modern practices, this structure / action dilemma is solved
appropriately with a systematic process approach Process management
as a management tool has a remarkable role in both "getting
better" (strategic change) and "earning money" (operational
run). It consists of planning, controlling, improving the operations,
and assuring quality. Managing complexity
goes beyond simplistic tools, and the managing feedback loop needs
to be much faster than the business system's response time. This
is a key challenge to leaders and managers and to the quality professionals
who support them. The business requirements include that all variety
dimensions are addressed appropriately in a process network as a
whole and in individual processes, although depending on the type
of process some of the modes may have a clear emphasis.
Figure 3. Variety
modes of business processes and their typical nature of activities
The process management model The process management
implies how business management realizes the process approach according
to PDCA (Plan + Do + Check + Act) principle and gets planned outputs
and results of work done in processes. The operations are managed
by feedback through measurements (see figure 4). There are in fact
three PDCA loops:
Figure 4. Process
management practices A company-wide
Business Excellence Realization Model addresses how Quality Management
principles are realized in the whole organization and integrated
with business issues on four levels: This model also
defines the infrastructure for realizing process management. On
a daily business level all products to customers are generated through
processes. Prerequisites for effective and efficient process management
include creation and maintenance of the process management model,
the process structure and methodological tools on corporate level,
and the commitment of employees and teams to process objectives.
A process-structure
is always organization-dedicated solution. A corporate-wide business
process framework may consist of four domains of processes: Critical process
chains within this framework are the chains of individual processes
from-market-to-market or from-customer-to-customer. Each process-domain
consists hierarchically of processes, sub-processes, activities,
and tasks. The basic lines
of process management are: Management of
the comprehensive process network includes normal tasks of business
management. It is essential that the business system is understood
as a network of business processes instead of functional units (organizational
silos). The scope of managing individual processes consists of process
planning, control of the operation, performance improvement, and
quality assurance. The basis for a process management is the process
plan (see figure 5).
Figure 5. Process plan for defining the basis for a process management Quality integration through processes Companies' quality
efforts aim at competitiveness (excellence) of the business performance
taking into account the needs of all interested parties (stakeholders).
Thus, the business leaders have the principal responsibility for
quality realization. All this is generally included in the concept
Quality Management. Quality integration
means that all quality related activities are embedded within normal
business management activities. Thus, according to process approach
quality is in practice realized through business processes. That
means also that distinct quality management systems are no more
needed or not even justified. In fact, they may be harmful. This
is also an effective and efficient way for applying the purpose
and objectives of the ISO 9000 standards. Also quality assurance
for creating confidence among customers and other stakeholders is
in a natural way based on the performance of business processes
(see figure 6). Quality assurance is essentially a communication
issue.
Figure 6. Quality assurance through business processes Documentation
is intended to be a dynamic and high-value-adding activity. It is
needed for achieving required business performance, for evaluating
the chosen approaches and their deployment and related results,
for realizing quality assurance for customers' confidence, and facilitating
performance improvement. Process documentation
is an essential part of the whole business management documentation.
Process management documents include general principles and guidelines
for process management, process plans, procedure and method documents,
operational records, and training documents. These documents also
fulfill the needs of quality management and quality assurance and
thus no distinct quality documents, e.g. quality manuals, are needed
any more. Requirements for
documentation and supporting tools originate in strategic and operational
needs of the business, and different user-groups' needs. Consistency
of different needs of and within documentation is required. The
most important documents for a process consist of: Process performance Process performance
is considered both from strategic and from operational point of
view. Performance management of processes consists of strategy-based
measures (e.g. through Strategy Scorecard methodology) and evaluation
of the overall process performance. Overall process
performance is a fuzzy concept. Process performance evaluation consists
of assessment of the whole business performance (process network)
adhering to quality awards or business excellence methodology, and
assessment of individual processes (process audits modified from
the general ISO 19011 auditing standard). Also a scoring methodology
can be included in process auditing (see figure 7). Assessment results
are useful both for process improvement towards business excellence
and quality assurance for customers' confidence (see figure 6).
Figure 7. Presentation
of the results of the process audits Needs of operational
process performance measures for daily management are focused on
diagnostics and analysis for corrective and preventive actions.
Thus, the operational process performance management is very differnt
from the strategic performance management, and different means are
needed. People issues in process performance
and management A critical issue
for process performance is the operation of individual performers
within processes (see figure 8). The most difficult question in
practice is the clear understanding of roles of the process owners
and line managers. In fact, there could be no process management
without a process owner. Process owner's responsibilities should
be defined in procedure documents for organization’s process
management. There is always a potential risk of conflicting interests
between the roles of process owners and line managers. The prerequisites
to prevent and resolve these conflicts in an effective win / win-manner
depend basically on the procedures of compensation, rewarding, incentives,
recognition, and, of course, on mastering special skills needed
to realize the right management strategy in a conflict of interest
situation.
Figure 8. People issues in processes All operators
in all organizations are today knowledge-workers. Therefore managing
both explicit and implicit (tacit) knowledge is a key issue of the
process management. Process performance improvement Process performance
improvement is carried out according to a systematic methodology
including both breakthrough and incremental continual improvement
according to the methodology described e.g. in the ISO 9004 standard.
Also benchmarking methodology is used in this context. Comprehensive enhancement of the business
process approach
Figure 9. A model
for organizational learning Superior improvement
of process performance is a matter of strategic change. The domain
of change calls for awareness and sensibilities, opportune attitudes
and beliefs, and skills and capabilities. The full-fledged
utilization of process management is deficient as concepts, modes
of thinking, and practices including management tools and infrastructures
have not been properly internalized. Understanding the whole issue
at hand is, however, a prerequisite for its utilization. Appropriate
training based on the company's own systematic process management
model provides a much faster way to understanding than an approach
based on trial and error. Conclusions Practice proves
that process management is an incredibly simple thing, but 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. |
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