Project vs. process
Even though the word “process” has become an important part of ecommerce vernacular, there is still confusion in many circles around how specifically to define it, with some even confusing it with what is meant by project. We feel it is very important to clarify the difference between them, especially as the implementation of automation and more advanced software solutions becomes the staple.
Process is a set of related activities with a certain sequence where inputs are constantly repeating and changing in order to get desired results. For example, we might think of the process of employee recruiting for a newly established company department. A project, on the other hand, is only a one-off affair - in our example, this would be the establishment of the department itself.
A process can also be linear - each task is followed by another one and so on, until the goal is achieved, or it can be more complicated - one simple task branches into a set of activities that can be performed simultaneously by more than one worker, finally converging again into one final goal.
Each process has its inputs (people, materials, activities,...) and in the end it generates outputs, which are often the input of the next follow-up process.
But what is the process good for, in a company? There are several reasons for process management:
A company that realizes what processes are needed from closing a business deal to delivering a product or service to a customer, is also aware of the stage the order currently at, who is responsible for each activity, and what proces's parameters should be. Only then the company can identify wasteful steps and detect bottlenecks. This can save a lot of money and/or shorten delivery time to the customer and gain a great competitive advantage in the market.
A manufacturing company that struggles with scraps caused by worker's mistakes will have a production process set in place to ensure that none of the steps are forgotten. The individual activities will be performed with due accuracy and accordingly to prescribed specifications.
A freelancer takes advantage of the processes when he decides to delegate simpler tasks to a virtual assistant. Thriving companies usually encounter labor fluctuation or employee fungibility especially during holidays and sick leaves. A process-managed company is much better prepared to delegate work to a new employee.
By introduction of process management, the company gains a degree of stability and is prepared to meet greater customer demand. On the contrary, it can optimize its processes once the Economy cools down.
Legislative and branch requirements
With each new release of the ISO 9001, increases standard of the process management requirements for the companies that have received this certificate. For example, companies supplying the automotive industry have therefore much stricter requirements for their processes, their management and optimization. This often leads to customer process audits to determine whether a company is able to deliver its products consistently and effectively. These audits may take several days.
In a larger and more complex company, we can meet several levels of processes. From the most basic level (the process can be described as DELIVERY OF MATERIALS - PRODUCTION - STORAGE - SALE - SERVICE), where the individual steps are the responsibility of the entire departments, to the very detailed procedures and instructions, where the assembly of a certain part of the whole object is recorded step by step.
The advantage of the described and revised processes is the possibility to evaluate their contribution to the company. If such processes are key to the business or add value to the customer, we can secure them better. Otherwise, if some of them are unnecessary (they no longer meet the requirements for today's customer's needs or they are still set because they made sense in the past), they should be completely revoked.
Each process should have its Owner. The owner is responsible for the whole process, even though he may not be (and often is not) its implementer. He is a kind of guarantor of the process' course and result. The implementer carries out the process or its part, considering his competencies. The process supplier can be the output of the process that preceded it. The process customer can be both internal and external. The customer orders it from the implementer and defines its output, quality, speed and other parameters expected from the process.
Process revisions are used to evaluate stability and efficiency. They should be performed at regular intervals by a group of workers who are competent to assess whether the described process is in agreement with the reality. They should also evaluate its benefits for the company, whether in terms of the achievement of set goals or the level of added value for its customer. Last but not least, the individual or the team should consider whether the process can be improved (and if so, how).
Each process should be measurable and should have its own indicators to determine if the process is running according to the requirements of the contract owner (process customer). Key Performance Indexes or the KPIs can be, for example, processing speed, repeatability, wastage rate, repetition rate per time unit, etc.
An example of a process can be everyone's familiar household cleaning. It is a kind of checklist that tells us what activities to perform in what order:
- Clean up
- Place the dishes in the dishwasher
- Wipe away the dust
- Vacuum cleaning
- Mop the floor
- Water the flowers
This can be the weekly cleaning process we've arranged with the cleaning lady. Once a month, we can start the process extended by washing windows, cleaning the oven or changing beddings.
A typical example of a business process is the invoicing of an order. It starts after completion or delivery of goods or services to the customer. It includes a summary of cost items (may involve several departments), a discount calculation, an invoice approval by the responsible employee, and a shipping to the customer. The process may end by crediting the company account.
It is good to have such a process described with individual responsibilities so that the invoice clerk does not forget to send a cost calculation request to one of the departments or send an approved invoice to the customer.
If there are running several processes like these (tens to hundreds of parallel running invoices, each at a different stage), it is necessary to have an auxiliary tool that can keep track of how many such processes are running, and if some isn't unnecessarily awaiting for moving to the next step.
The process as an investment
Although the mapping or building processes in a company is an issue that is often misunderstood among the employees, their contribution can be crucial to the function and stability of the company. Particularly, German companies are aware of this and have a very strict and conservative approach to processes. When the global financial crisis broke out in 2008, many companies had to close down. On the opposite side stood the companies that survived. Behind their successful survival we can see (among other things) process management. During the time when there were not many orders, such companies resorted to process revision and mainly to process optimization. Once the market economy started up again, they emerged from this situation strengthened and ready.