Process-Based Management

Process-based management has become one of the most effective management paradigms to improve how an organization is managed for achieving higher levels of efficiency. Process-based management views business functions as a collection of standardized processes, managed to achieve a desired result. The processes are managed and continually improved by organization in purpose of achieving their vision, mission and core value.

A process is a sequence of activities aimed at generating more value by transforming an input into an output, which can in turn be the input for another process. All the activities within an organization, from buying raw materials to resolving a customer complaint, can and should be considered as processes.

Process based approach to management started gaining grounds in the manufacturing industry in the early part of 20th century. Companies started thinking about standardizing their processes to deal with mass production. However, process-based management took off in the 1980s. Various quality management gurus including Edward Deming strongly advocated the benefits of processes. Automotive manufacturing companies started adapting to the process based manufacturing and business management in a big way. Toyota came up with its famous Toyota Production System.

In the eighties it became one of the eight principles of the ISO 9001 quality management standard. A growing number of companies have implemented this system to “document what they do, and do what they document” (which is how the nature of this technique is usually summarized). Every function of an organization has been defined as a set of processes and ensuring these processes of different functions align at a higher level to help achieve the organization's vision and mission. Process becomes the standard common binding factor for the whole organization.

Process based management has gained widespread adoption in different kinds of industry apart from manufacturing. Software industry has adopted process based development in a religious manner. Service based customer facing businesses have also adopted process based management. Process based management has also gained adoption even in project based businesses. Some of the companies include Amazon, IBM Global Services, Accenture, Toyota, TCS, and Mahindra. Many companies are getting themselves certified with ISO 9000 certification. Find the best PMP Prep course on KnowledgeHut.

Stages in implementing Process Based Management

Any organization striving to implement process based management will go through the following phases:

1. Documenting the processes
2. Analyzing the performance of processes
3. Taking measures for improving the processes

Advantages:

1. It provides a clear and global vision of the organization and relationship between different groups in the organization.
2. An organization that is managed with processes becomes more flexible and consistent than one based on hierarchies.
3. Since processes are seamless and affect different organizational units, the interrelationships between people are improved.
4. Each process is assigned individual(s) who are responsible for it. Everyone in the organization understands their role in each process and knows how to help reach the organization’s objectives.
5. Process eliminates silos and fosters collaboration.
6. It allows optimizing the use of resources, thereby lowering and optimizing management and operating costs.
7. Processes are measured. Objectives and indicators are established for each process.
8. Of all the metrics that are analysed, the degree of customer satisfaction is very important. The organization is aimed at meeting customer needs.
9. It strives for continuous improvement of processes. Inefficiencies, organizational weaknesses, bottlenecks, and errors are identified quickly and methodically, eliminated fast enough, thereby reducing risks.

Conclusion

Process based management is built on the premise that there is a standard process for each activity or function in the organization. Everyone follows the process to do the specific function. Process ensures the outcomes are standardized and predicted. The organization builds a system which works for continuous process improvements.