Editing Process-based management

{{Short description|Organizational style}}
{{other uses|Process (disambiguation)}}
'''Process-based management''' is a [[Business administration|management]] approach that views a business as a collection of processes, managed to achieve a desired result.<ref>"''Process-based Management''" Barron's Business Guides: Dictionary of Accounting Terms, Jae K. Shim et al., Barron's Educational Series, 2014. Credo Reference, Accessed 09 Oct 2016.</ref> Processes are managed and improved by the organisation for the purpose of achieving its [[Goal|vision]], [[mission statement|mission]] and core values. A clear correlation between processes and vision supports the company in planning strategies, structuring business and using sufficient resources to achieve long-term success.<ref name="achievingpbm" />

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. The system is not a method or tool for a particular process, but a [[holistic approach]] to manage all of an organisation's processes. To manage processes effectively the organisation must have an effective [[teamwork|team network]] and full knowledge of their vision.

The general management system focuses on specific work-knowledge and direct solutions for cost and [[budget]]; on the other hand, process based management applies these financial measurements but in an operational way considering how each performance affects the company as an amalgam of different processes. As a result of recent advances in technology and increased international competition, more companies aim for better methods of grouping and integrating organisational activities.<ref name="newapproach" />

==Vision, mission and values==

[[vision statement|Vision]], [[mission statement|mission]] and core values are three crucial factors to manage an organisation from a process perspective. Considering the vision, mission and values as a direction of their business, an organisation can build their corporate strategy and determine the processes they will take into account.<ref name="processstrategygroup">[http://www.processstrategygroup.com/uploads/PBM_Assessment.pdf] {{Webarchive|url=https://web.archive.org/web/20160304041745/http://www.processstrategygroup.com/uploads/PBM_Assessment.pdf|date=2016-03-04}}, Process Strategy Group. ''Introduction to Process Based Management: What every organisation needs to know about PBM'' [online]. UK:Process Strategy Group, 2010 [Accessed 12 October 2014]</ref> As a result, the organisation obtains strengths and competitiveness among other companies.

First, the [[vision statement|vision]] is an aspirational purpose what the organisation would like to achieve in the long run.<ref name="processstrategygroup" /> The vision leads the company to challenge various tasks and develop its own business strategy. In other words, the organisation considers vision as a motivation to build a business structure, determine strategic plans and manage human resources. Therefore, the company carries out ''vision-achieving operations'' as their primary goals.

[[mission statement|Mission]] is a fundamental purpose of a company that remains unchanged over time. The mission provides a guidance for decision making and gives a path to successful results.<ref name="businessdictionary">[http://www.businessdictionary.com/definition/mission-statement.html], Business Dictionary [Accessed 18 October 2014]</ref> For instance, mission is different from a vision in that mission is a something to be achieved whereas a vision is something to be aimed for achievement.<ref name="iso">[http://shop.bsigroup.com/upload/Shop/Download/Books/BIP2014sample.pdf] Rosam, I., Peddle, R. ''Creating a Process-based Management System for ISO 9001:2008 and beyond'' [online]. UK: The High Performance Organisation Group Ltd., 2008 [Accessed 10 October 2014]</ref>

Core values are principles that help companies to determine whether their actions and decisions are right or wrong. Values are essential to making decisions and sustaining the company's long-term success.<ref name="boeing">[http://www.omg.org/news/meetings/workshops/soa-bpm-mda-2006/01-1_Farrar.pdf] David F. ''Process-Based Management: A Winning Strategy''[online]. Canada:Boeing, 2010 [Accessed 19 October 2014]</ref>

==Advantages==
{{POV|date=November 2021}}
* Documenting a process provides a clear guideline of how organisation improves their processes and performances over time.<ref name="netcoach">[http://www.netcoach.eu.com/index.php?id=38], Ward, M. ''What is a process and processed-based management system?'' [online]. Ireland: Netcoach, 2011 [Accessed 12 October 2014].</ref>
* Process based management measures the full set of activities in one business. For instance, it focuses on internal processes such as [[customer satisfaction]], quality of product and security as well as financial results including [[revenue]]s, profits, costs, and [[budget]].<ref name="newapproach">[http://www.iaeng.org/publication/IMECS2009/IMECS2009_pp1742-1747.pdf] Badreddine, A., Romdhane, T.B., and Amor, N.B. Proceedings of the International MultiConference of Engineers and Computer Scientists. ''A New Process-Based Approach for Implementing an Integrated Management System: Quality, Security, Environment,'' 2009; 2:2-6</ref>
* Understanding of the correlations between business processes avoids taking wrong decisions. It reduces costs, time and resources wasting on unnecessary things.<ref name="achievingpbm">[http://www.leonardo.com.au/documents/achievingprocessbasedmanagementv2.pdf]. Leonardo Consulting. ''Why Process-Based Management?'' [online]. Australia: Leonardo Consulting, 2010 [Accessed 14 October 2014]</ref>
* Analysing the processes, an organisation will be able to predict sources of hazard and choose right decisions.<ref name="newapproach" />
* The system protects [[intellectual capital]] of the organisation. Monitoring the development of processes, the organisation can analyse risks and its weakness.<ref name="achievingpbm" />
* Focusing on continuous improvement and customer’s requirements, the organisation improves [[customer service]]s which deliver value to its customers.
* Evaluating the process assures the results a company expecting to obtain.
* Process based management is an integration of both input and output in business process. It controls personnel, technical and financial resources in a holistic viewpoint.<ref name="newapproach" />
* The organisation can improve IT system that reduces unnecessary complexity and improves the quality of performance measurement.
* Analysing processes and implementing new objects if required, the organisation deal with fast changes in demand.

==Stages==

===Documenting the process===

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

A business consists of different departments in charge of specific jobs or functions. Therefore, the processes support these managerial sectors and transform successful outputs. Then a process team performs a set of sequential tasks to analyse whether the organisation delivers useful outputs to the customers.

Basically, processes are built by information that indicates the current state of company and research data such as customer satisfaction. The information includes [[service-level agreement|customer-based agreement]], management documentation, purchasing manuals and [[flowchart|flow charts]].<ref name="iso" /> For instance, the flow chart is a useful information in order to control the flow of processes and list several steps and activities in detail.

===Analysing process performance===

Analysed and clarified processes are allowed to implement on the actual business. Then, an organisation monitors its business and improves the overall stage of process.

To evaluate the sequence of process, measurement is an essential element that shows results of process performance with numerical and comparative data. In other words, organisations obtain a relevant analysis using the measurements that can be shown as graphical representations such as [[pie chart]]s, [[bar chart]]s, cause-and-effect analysis, and [[gap analysis]].<ref name="iso" />

Many organisations highly depend on data and visual analysis processed by information system. For this reason, organisation must obtain accurate analysis based on exact data and must be cautious for mistaken output that impacts whole process of their business.

As a result, the measurements help the company to analyse current state of performance and give guidance for the firm’s sustainable improvements.

===Implementing improvements===

Having designed the processes of management system and analysed the performances using useful measurements, the final step is how to improve the system and maintain its effectiveness. Therefore, implementing the improvements is a key activity to examine the processes and improve the flow of the management system.

An organisation determines which part of processes must be improved and modified. It analyses how each process influences a set of activities and applies the improvements to some parts of system. The purpose of implementation is to operate its business strategically and to deliver sufficient resources. In effect, the process based management results in outputs that satisfy their customers and develop the business itself.<ref name="netcoach" />

==See also==
* [[Project management]]
* [[Strategic planning]]
* [[Business process modeling]]
* [[Value-based management]]

==References==
===Inline citations===
{{reflist}}

===Sources===
* 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
* Segatto, M. et al., Business Process Management Journal, ''Business process management: a systemic approach?'', 2013; 19(4): 698-714
* Transition Support. [http://www.transition-support.com/Process_based_management_systems.htm ''Process based management systems'']. UK: TransitionSupport, 2013. Accessed 19 October 2014.

{{Management}}
{{DEFAULTSORT:Process-Based Management}}
[[Category:Business process management]]