Process Management Applied to Service Companies

It is undeniable that today, organisations are immersed in highly competitive globalized markets in which all want to be successful.

To achieve these objectives, companies need to manage their activities and their resources through tools and methodologies that allow them to configure their management system. The implementation of process management has been revealed as one of the most effective management improvement tools for all types of organisations.

A process is an activity or set of linked activities that use resources and controls to transform input elements into outputs (output elements). All activities that take place in an organisation from the planning of purchases to the attention of a claim or an incident are considered processes.

You can divide the processes into two large groups:

  • In the first group are the business processes: they are processes that add value for the client. For example, commercial processes, marketing processes, manufacturing, distribution, etc.

  • The second group is the support processes: they do not add value for the client, but they are necessary for the operation of the business. These are processes related to the administration and organisation of the company, human resources, incident management, and claims, etc.

Decentralised service companies that have many human resources are likely to experience distortions and personal errors in their processes.

Process management in this type of company should be oriented to develop the mission of the company by satisfying the expectations of its customers, suppliers, shareholders, employees, etc., instead of focusing on the unilateral functions of each department.

Basic concepts

The terms related to the management by processes necessary to identify and define the processes are:

  • Process: as we have already indicated, the set of interrelated resources and activities that transform input elements into output elements.

  • Relevant process: are processes that generate an added value to achieve a result that fully satisfies the objectives, the strategies of an organization, and the requirements of the client.

  • Key process: are the processes extracted from the relevant processes that have a significant impact on the strategic objectives and are critical to the success of the business.

  • Subprocesses: are integral parts of a more complex process.

  • System: organisational structure, procedures, processes and resources needed to implement a specific management.

  • Procedure: specific way of carrying out an activity. It indicates what should be done and who should do it, when, where and how it should be carried out and how it should be controlled.

  • Activity: is the sum of tasks, which are usually grouped in a procedure to facilitate its management.

  • Project: series of activities aimed at achieving an objective, with a clearly defined beginning and end.

  • Indicator: is a set of data that helps to measure the evolution of a process or an activity.

What is the cornerstone of process management?

In process management, everything revolves around the value provided to the customer, both to the external customer and the internal customer. Any process that does not add value to the client is considered wasteful and must be eliminated.

Process management involves the management of people, tasks, and technology in a coordinated manner. Technology must support process management for coordinated execution of tasks and ensure communication between resources, and people.

For process management to achieve the objectives of the company, people must know the processes in which they are involved, since otherwise there would be a lack of alignment between the processes and their objectives.

When should process management be applied?

For example, if there are many incidents with employees, or if there are many complaints from customers, or if it takes a long time to correct them, we should follow up on where the problem is so that we can correct it as soon as possible.

Thus, after analysing the processes and detecting faults, defects or errors, they are changed, adjusted and improved.

Therefore, process management optimises the activities we carry out in the company and consequently makes us more efficient, more profitable and more competitive.

Objectives of process management

  • Among the main objectives to be achieved through the implementation of process management are:

  • Increase the results of the company based on achieving higher levels of customer satisfaction.

  • Increase productivity by reducing internal costs caused by activities without value.

  • Reduce waiting times

  • Shorten delivery times to customers.

Advantages of process management

The main advantages that organisations obtain from implementing process management are:

  • Have an individual view of each process and a total vision of the entire company.

  • Better defined relationships between people from the same departments and from different ones.

  • Detect bottlenecks, and act on them earlier.

  • Orienting the effort; by not working in isolation, we seek the common benefit of the company, not only the individual.

  • Improve the distribution of tasks. All the people in the organisation know their role in each process and know how to contribute to achieving the company’s objectives.

  • Gain flexibility and control

  • Reduce management and operational costs since the use of resources is optimised.

  • Obtain measurement tools, using indicators to achieve these common objectives, the processes are measured and analysed.

  • Know the satisfaction indexes. One of the main factors measured is customer satisfaction (both external and internal customers).

  • Detect inefficiencies and errors quickly, reduce risks and thus improve the processes continuously.

Process maps and flow charts

Process maps are diagrams that clearly and reliably represent the company’s vision of the structure of the company. We can say that they are the graphic representation of the management by processes of a company.

These maps represent the processes and the relationship that exists between them, their objective is to obtain an overview of everything that happens in the company, so they must be clear and concise.

Process maps can be defined as a large network of processes linked together.

Example for a service company…

A process map of an organisation in the service sector can be formed by processes such as:

  • Planning of the services offered by the company

  • Processes related to customers: claims, requests, etc.

  • Design and development of the service process: coordination, planning, scheduling tasks, responsibility, evaluation, etc.

  • Hiring and management of personnel: selection, training, etc.

  • Feedback and continuous evaluation.

  • Provision of the service: performance control, optimisation of resources, etc.

  • Management of sales processes: framework contracts, negotiation, approval, and recurrence.

Flow diagrams are the graphic representation of a process. The different steps through which the process passes are represented by symbols that are joined together by arrows that indicate the flow direction of the process.

The main objective of the flow diagram is to facilitate the understanding of each activity by showing the sequential relationship between them.

In the diagrams, besides the direction of the flow, the branches of the processes, the existence of repetitive loops, the number of steps of each process, the interdepartmental operations, etc. can be appreciated.

Such process mapping diagrams or models are often created using specialised software. Microsoft Visio is a popular choice, but there are also plenty of Visio alternatives which provide even greater functionality and useful features, such as the inclusion of process costing, live workshops, digital brainstorming sessions, as well as monitoring of key metrics for better decision making.

The application of process management generates a detailed analysis of the processes in organisations of all types, highlighting those service providers, which can model their way of operating, improving the management of each process and the set of processes, to optimise the benefits to internal and external customers.

We can conclude that management by processes in organisations is a fundamental tool to guide organisations towards the achievement of their objectives.

So, what are you waiting for? Isn’t it time you reorganise your company and take advantage of all the advantages process management offers.