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Tuesday, January 19, 2010

Process Control and Process Improvement

Process Management has its relevance when managers begin to conceptualize business activities as interdependent processes instead of functions and tasks. The basic requirement towards effective process management is IT enabled business process automation, usually an outcome of a reengineering task. For the processes to accomplish the set goals, we need to set various standards of performance which each process and process interactions are required to achieve. We also need to establish means to measure the actual performance compare it to the standards and take corrective action when there are deviations from the set standards. This is called Process Control. When a reengineering project is executed, usually we build in this control feature to the redesigned process model so that the entropy is reduced to the minimum. Process improvement refers to the major advantages that a reengineered process brings in (as a result of process control) such as reduced work trails and faster cycle times, reduced manual labor and increased customer satisfaction by generating high quality products and services. Effective process control methods ultimately lead to continuous process improvements. TQM is a well known management technique that focuses on effective process control and continuous process improvements.

Take the case of approving a loan application. Traditional way of doing it involves a trail of work flows from one functional level to another (usually six), accepting various input data, calculating risks and repayment capabilities etc. until the loan is finally approved. Now suppose we reengineer this whole work trail, it may be redesigned in the form of an automated PC based application which can be handled by a single person feeding in the inputs and the software application processing and reporting the results. We establish controls in the process so that it adheres to the accepted standards (these can be actual programming code or logic) and proper coordination is ensured among interacting sub-processes. In the traditional process, there is no explicit control established and performance may be degraded whereas the new software application is designed and deployed so that it reduces human errors and improves cycle times (process improvement). Now to meet with changing customer requirements, innovation and technological advancements, the automated loan approving process need to be continuously improved (ultimate goal).

Article Copyright - Deepesh Joseph (2003-2020)

Research Reference:
1. Williams C. (2007). Management (4th ed., ). Thomson South Western.

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