3 Unique Types of Process in Any Organisation
There are actually 3 inter-related ‘business process’ types found in ANY organisation. Key to effective management (and thus ROI) is the ability to recognise these 3 as distinctly different yet inter-related, and then the ability to leverage them. Synoptic is unique in this respect. Let us expand on each one.
The Transactional Process (a.k.a. the ‘business process’)
This one’s well known; it transforms labour and raw material into finished products / services.
The Management Process (a.k.a. the ‘process of management’)
One that’s habitually overlooked. It maximises the likelihood of achieving the operational objectives of the Transactional Process. It causes costs and revenue to ‘happen’.
In order to control costs, remain competitive, and to survive in an ever increasing competitive environment managers must accept the discipline of sound management practice. Our methodology satisfies the basic needs of management including:
- Providing the necessary management control tools to increase cost improvement,
- Organising work to minimise production costs,
- Improving communication between all levels of management.
Having the right controls in place ensures the efficient economic operation of the business. There are seven ‘must have’ management controls that are applicable to any business namely: forecast, plan, schedule, measure, control, report and action. Our experience is that most companies have some of these controls in place, but very few have all of them.
These management controls provide the building blocks for an effective ‘dashboard’ type management system such as the Balanced Scorecard and Six Sigma reporting.
More about this type of process can be found under our service offering ‘Operational Excellence’.
The Information Process (a.k.a. the ‘process of information’)
This defines the flow of information and hence the quality of the decision making from ‘shop floor to board room’.
The information process provides the link between the transactional and management processes and supports organisational redesign questions. Mapping the information process will also uncover weaknesses within each of the processes themselves. It will highlight where and how a manager can make substantial savings within the business without the need for an invasive business consulting project through answering the following questions;
- What do we need to know about the process (eg. accounts receivable) in order to keep it moving?
- Do we currently have adequate information to make these decisions?
- If not, why not, and how can we fix it?
Symptoms of poor information quality are addressed by correcting the causes.
Information mapping is particularly useful to companies wanting to substantially improve the returns they are getting from their IT investments including their ERP and decision support systems. It also provides a comprehensive methodology for the collection of business requirements to support the purchase of new software..
The Bottom Line?
Weakness in any of these 3 processes results in diminished organisational effectiveness and poor efficiency, and ultimately, a reduced ROI and ROA.