Process management tools (e.g. process optimisation, process control, process re-engineering, BPR) enable companies to plan, optimise and control business processes.
The concept of process management
To understand the concept of process management, it is first worth clarifying what is meant by the term business process.
The concept of business processes
A business process (hereinafter: process) is a controlled, planned chain of activities to achieve a specific goal. This goal is usually the creation of a product, service or good.
The business process is characterised by:
- has an input,
- output,
- and converts the inputs to outputs while generating a value.
Such a process is when a company handles incoming invoices, enters them in the accounts and arranges for their payment. The input is all the invoices. The output is that all invoices are paid. In the process, invoices are received, booked and archived.
The task and purpose of process management
The task and purpose of process management is to produce the results that the company delivers to its customers. In process management, the company thus adapts processes and organisational factors to customer needs and environmental requirements.
The process produces an output from the input.
Elements of process management
As processes can be complex, process management itself can be divided into several parts and areas. These include:
- process design,
- the process control
- and process improvement.
Although they seem to be very close concepts, they are slightly different in each case.
Process transformation
Process transformation is about changing existing processes or creating new ones. This can be a reorganisation, a downsizing, a reorganisation. Process re-engineering is typically needed when "optimisation" is no longer enough and it is worth putting it on a completely new footing.
Most of these changes come from the top, from management. We call these top-down process transformations.
Process optimisation
We talk about process optimisation when we need to improve an existing process. But they do not need to be completely rebuilt from scratch. In this case, we look for weaknesses and develop improvement and optimisation proposals.
Some of the ideas for successful optimisations come from the bottom of the organisation, which is why we call them bottom-up improvements.
Process control
Process management is a set of tools and methods that ensure the long-term maintenance and improvement of the process results. It includes performance measurement and process controlling.
Process management steps to improve process performance
In recent decades, there have been many theories and methodologies on how to make certain processes more efficient. These can be grouped into three broad categories:
- organisational approaches,
- quality management guidelines,
- design, management solutions.
Organisational approaches to process management
One of the best known theories of organisational approaches is BPR, which stands for Business Process Reengineering, where the aim is to rethink all the processes of the company, even by radically transforming them.
One of the successors and an improved version of BPR is X-engineering, where we rethink the way we do business by looking at processes across companies.
In contrast, the goal of business process optimisation, or process optimisation, is to improve, not to redesign from scratch.
Quality management guidelines
The three best-known quality management trends:
- a TQM,
- a Six Sigma
- and Kaizen.
TQM
Total quality management (TQM) aims to put customers at the heart of a company's processes and mindset. All decisions will be driven by the need to meet customer expectations and achieve the highest possible customer satisfaction.
Six Sigma
Six Sigma looks at how far the outcome of a process deviates from the goal that was originally set. Manufacturing companies prefer to use it because it provides a good measure of the quality of the work done and the output.
Kaizen
The main element of the Kaizen approach is that it seeks to improve and support the corporate culture by involving employees. The method, which originated in Japan, has spread around the world and is based on continuous improvement by employees, continuously improving operations and efficiency.
Planning and management solutions in process management
Two of the best known methods of design and management solutions:
- qualitative process management,
- and process cost management.
Qualitative process management manages the enterprise value chain according to the following criteria:
- Quality,
- time,
- Costs,
- consumer satisfaction.
Process cost management, on the other hand, approaches the issue from a financial perspective, putting cost centres at the heart of the business approach.
The benefits and results of process management
The companies that are most successful in their market are those with outstanding experience and expertise in their field. A company's long-term competitive advantage lies in operating principles and methods that simply cannot be copied, and in many cases these must be sought in its processes.
It is no coincidence that the best process improvements are driven by strategic objectives and customer needs. And these are worked on in active collaboration with key people in the respective areas.
If processes are developed in an integrated way with the ERP system, business results will be sustainable in the long term. Of course, the process does not stop at the point of creating them, but they need to be continuously documented, analysed and improved.
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