Process based management systems

Producing business outputs

Process based management systems are emerging as a way to improve organization efficiency and effectiveness. All organizations desire to produce outputs that satisfy their customers. The primary output of any business is therefore conforming product and service - hence the preoccupation with product quality. But process based management systems are not only focused on product quality. If properly designed, process based management systems enable an organization to satisfy the needs of all stakeholders.

The process approach that is referred to in the ISO 9000 family of standards is the process approach to management work which implies there are different ways of management work and indeed there are.

• We can manage work by dividing the people doing it according to the specialist skills and knowledge they possess. This is managing work by functional discipline and referred to as the functional approach to management
• We can manage work by dividing the activities concerned into groups that serve the same objective regardless of who performs the work. This is managing work by process and referred to as the process approach to management.

Most organizations employ functionally based management systems and as a result create friction between the various functions. Therefore there is a choice as to how we manage business outputs. We can either create functionally based management systems or process based management systems so what's the difference?

The functional approach

We could treat each output as an objective to be achieved and install a management system to achieve it.  We have national and international standards to guide us such as ISO 14001 on the environment, ISO 9001 on quality, ISO 27001 on information security and ISO 45001 on occupational health and safety. In this context a management system would comprise a number of activities designed to function together to fulfil a specific management objective. By this definition we could create several management systems - all we need to do is identify an objective and put in place a management system to fulfil it. This is illustrated in the diagram below. We can call this the functional approach to management. Taking this a few steps further, we could appoint managers to look after these systems and make them responsible for achieving the associated objectives. In this way we would create Quality Managers, Information security managers, Health and Safety Managers, Environmental Managers. This is how it all started - the evidence is all around you. Just look at any ISO 9001, ISO 14001 certificated organization and this is what you are likely to witness. But is it effective?

There are several disadvantages with this approach. It forces managers to trade off one objective  against the other so that quality targets compete with environmental and financial targets. Managers of these functions wrestle for the same resources. In the end no one wins and the customer gets a product that might be cheap and environmentally friendly but does not function in the way required. What is needed is an approach where everyone wins. A win-win situation. The answer is the process approach to management. There do not have to be losers. Process based management systems ensure everyone is a winner.

The process approach

Managing work by process instead of by function is referred to as the process approach to management.

Instead of taking each output as an objective, we take the primary output of producing products and services that satisfy customers, make this the objective and classify the other outputs as satisfying constraints because, without products and services, there would be no constraints that applied to the organization. We then identify the factors upon which these outputs depend and from this identify the core processes that deliver stakeholder satisfaction.

Although every organization is different because it has different goals, operates in different markets with different customers under different constraints, all organizations seek to create a demand – even non-profit organizations. All organizations seek to fulfil the demand, again even non-profit organizations and all organizations need resources to create and fulfil the demand and therefore have a resource management process. Finally all organizations have a purpose and a mission (even if it is not well defined) and seek to develop and improve their capability and their performance so as to achieve their mission – thus all organizations have a mission management process. If we put all this together we can create a model of the organization from a process perspective and this is illustrated below. However, it’s important to understand that this is a model that only includes processes because it is not a model of the whole organization.

More information about process based management systeml can be found in the ISO 9000 Quality Systems Handbook 7E

Each of the processes identified in the model are explained further by clicking on the appropriate box in the diagram.

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