Process-based management

Process-based management is a management approach that governs the mindset and actions in an organization. It is a philosophy of how an organization manages its operations, aligned with and supported by the vision, mission and values of the organization. The process is the basis on which decisions are made and actions are taken. It is oriented toward achieving a vision rather than targeting specific activities and tasks of individual functions.

Process based management is a management technique that aligns the vision, mission and core value systems of a business, when formulating corporate strategy.

The general process is that the vision determines the necessary strategy, structure and human resource requirements for the organization. It can also be used on the project management level in that a clear vision of a project defines the strategy, structure and resources required to achieve success. The project process continues with the implementation of the tasks and activities required to achieve the vision.

Most companies are focused around organizational performance such as budgets, incentives, costs, and skill development. Process Based Management adds these performance measures but in an operational way that adds to the organizational measures. Over time, the process measures take a stronger role.

Vision, Mission and Values

Vision, mission and core value are three crucial factors to manage an organisation from a process perspective. Considering vision, mission and value as a direction of their business, the organisation builds corporate strategy and determines which processes they take into account. As a result, the organisation can obtain strengths and competitiveness among other companies.

First, the vision is an aspirational purpose what the organization would like to achieve in the long run. The vision leads the company to challenge and develop its own business strategy. In other words, the organisation considers the vision as motivation to build a business structure, determine strategic plans and manage human resources. Therefore, the company carries out its operation to achieve their primary goals.

Mission is a core purpose of an organisation that remains unchanged over time. The mission provides a path and guides decision making that helps a company to reach the goals. It is different from a vision in that the mission is something to be achieved whereas a vision is something to be aimed for achievement.

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.

Advantages of process-based management

• Documenting a process provides a clear guideline for how organization improves their processes and performance over time.

• Process based management measures the full set of activities in a business. For instance, it focuses on the internal processes such as customer satisfaction, quality of product and security as well as financial results including revenues, profits, costs, and budget

• Understanding of their business processes and correlations avoids taking wrong decisions. It reduces costs, time and resources wasting on unnecessary things.

• Analysing the processes, organisation predicts sources of hazard and choose the appropriate decisions.

• The system protects intellectual capital of the organization. It monitors development of processes and analyse risks and its weakness.

• Focusing on continuous improvement and customer’s requirements, the organisation improves customer services which deliver value to its customers.

• Implementation of the business processes assures results the company expecting to obtain.

• The system is an integration of both input and output of each processes, therefore, it controls personnel, technical and financial resources in a holistic viewpoint.

• The organization can improve IT system to reduces unnecessary complexity and to improve the quality of performance measurement.

• Analysing processes and implementing new objects if required, the organisation deal with fast changes in demand.

Three stages in process-based management

Documenting the process

To manage its business from a process based perspective, the organisation is necessary to understand what defines the process and which activities they consist of.

A business consists of a number of different departments and it requires specific jobs or functions for each department. The process covers theses business functional areas and complete outputs the organization requested. Then a process team performs a set of sequential tasks transforming planning and resources to useful outputs for customer.

Processes are determined by information that indicates the current state of company and by researches such as customer satisfaction. The information includes customer-based service level agreement, management documentation, purchasing manuals and flow charts. For instance, the flow chart is useful information that shows general process flow and lists the steps and activities in detail.

Importantly, to manage the business with a process based approach, all employees need responsibility and ownership for each part of the processes.

Analysing process performance

Basically, all processes must be analysed and clarified when implementing on the actual business.

Considering the sequence of the processes, organisation is capable of monitoring its business in a broader view and improving the overall stage of processes. To evaluate the processes, measurement is an essential element that shows the results of process performance with numerical and comparative data.

Organizations obtain a relevant analysis using the measurements that can be shown as graphical representations such as pie charts, bar charts, cause-and-effect analysis, and gap analysis. Importantly, an organisation should obtain accurate analysis based on exact data in that the organization is highly depended on data and the mistaken output impacts whole process of their business.

In other words, the measurements helps the business to analyse the current state of performance and to give a guidance for the sustainable improvements.

Planning and implementation of Improvements

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.

Conclusion

Process-based management is a management approach that views a business as a collection of processes. The processes are managed and improved by decisions and actions an organisation has taken in purpose of achieving a vision, mission and values of the organisation. A clear correlation between processes and a vision supports a company to choose strategic plans, structure and sufficient resources required to achieve success and goals.

From a process perspective, an organisation regards its business as a system of vision-achieving vertical processes rather than specific activities and tasks of individual functions. (19:25) It is not a method or tool that is improve processes, but a holistic approach to tie all the processes in the organisation. Therefore, to manage the processes in one of effectiveness, it requires an effective team network and full knowledge of the vision.

The general management system focuses on specific work-knowledge and direct solutions for cost and budget; on the other hand, a process based management applies these performance measures but in operational way considering how each performance affect the company as an amalgam of different processes. As a result of recent advances in technology and increased international competition, many organisations aims for better methods of grouping and integrating organisational activities.

To continue the advantages of process based management, the organisation is essential to analyse the process performances and improve the activities by data and report. Implementing the improvements, the organisation fulfills its vision and success it expected to obtain.

See also

• Project Management
• Value-based Management

References

• 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