The Importance of Business Processes in Delivering Outcomes - Essay Example

?Towards an Understanding of the Importance Business Processes In Delivering Outcomes Based Upon Business Goals and Objectives I.Goals of EnterprisesDepending on which industry an organization belongs, a business will provide needs that are products, services, or both. The usual end goals are: (1) profits for the Stakeholders; (2) customer satisfaction for the people who buy company products or avail of company services; (3) good management of employees; (4) skillful allocation, disposition, and maintenance of assets like cash, receivables, inventories, supplies, furniture, building, equipment, and vehicles; (5) wise sourcing of funds and timely payments of liabilities; (6) compliance with government regulations, specially the proper accounting and payment of taxes, permits, and other fees. (7) And for large corporations listed in the stock exchange, potential investors as well as existing investors also require that value of a company’s stock (otherwise known as Stock Value) has been increasing comparatively better than that of the competitors’ Stock Value. (8) All these have to be realized while the separate entity, be it a single proprietor, partnership, or corporation, is mindful of its social responsibilities for the community and the country wherein it belongs. (9) Finally, every business is expected to grow and to become stable. It also means resiliency to economic downturns. In the case of Quick Fit Furniture Co., the objectives revealed were the sales increase of 10% from the past year and the (2) implied need to improve the human relationship of its workforce between departments. II. Business Processes Have To Be Controlled In order to achieve all those goals, the Board of Directors, Top Executives, and the other Managers must be familiar with strategic ways by which goals can be accomplished. They have to be aware of the business processes from within and the external environment affecting those business processes. Moreover, resources allocated within each of them have to be controlled and directed towards arriving at desired outcome or results. From a general point of view, what business entrepreneurs and executives must do is to marshal the allocated resources within each process so that the output will contribute to the achievement of the ultimate goals. A diagram should clarify this concept. What are the business processes then ? According to Harvard Business School Press (2010, p. 4), “Technically, a business process is the set of steps a business performs to create value for customers. A process consists of three basic components: Inputs…Activities…Outputs.” The same book admits that “every organization contains large amounts of business processes” (p. 6). From the time a business is conceived, the processes of planning, organizing, directing, communicating, controlling, evaluating, and improving resources in all divisions and departments of the organization will continue to be ongoing. There are many activities taken in order to get things done. What will guide the implementation of plans are the objectives leading to the accomplishment of goals. As a matter of fact, every person working within the business has a corresponding set of activities called the duties and responsibilities defined and meant to meet specific needs to serve the interest of an entire organization. Let us take some examples. Under the Administrative Department, there are usually the following: recruitment activities, training and development activities, and personnel files record keeping activities, performance evaluation, and so on. Each of the activities have to meet certain standards. A company cannot just hire anybody to fill a position. Thus, during recruitment, testing activities and interviews are usually done. The most qualified personnel are chosen based on the criteria specified by the Department which requested for the hiring of personnel. For the Finance Department, some people with background in Accounting and/or Finance would have to be found. The activities they perform will be technical. Some expertise will be needed because there are International Standards that have to be followed in recognizing transactions each day. At times, the requirement might even include having the connections with the leaders of the Banking Community so that there won’t be a problem with facilitations in financing. Just to further describe the many activities involved in the field of Finance and Accounting, multinationals have multiple sections under the Treasury Division. The Cash Management or Finance Department can include an Insurance Section, Money Market Placement Section, and Payroll Section. An Accounting Department within the Treasury Division would include the Cash Section, Receivables Accounting Section, Payables Section, Fixed Assets Section, and General Accounting Section. There are also the Audit Department and Department Department in the Treasury Division. Employees have their pre-defined duties which would specify the activities that have to be done in order to comply with the policies and procedures of an organization. Marketing Division similarly would have its respective goals in terms of Sales Volume and Sales in currency value. Under that group, there can be a Sales Department, Advertising Department, Distribution Service Department, and Product Management Department. Depending on the nature of business, those departments can be further subdivided in to Field Sales and Wholesale Store Sales Departments. Within all these are many processes like Sales Forecasting, Scheduling of Product Deliveries, Field Sales Reports Preparation, Handling of Sales Returns, Sales Training, and Telesales. Their ultimate goals are to sell and hit sales targets so that the company can earn. And all employees, cost of production, selling expenses, and many other overhead expenses can be covered. On top of that the company must profit, pay taxes aside from liabilities, and declare dividends (if deemed necessary). Otherwise, who will invest in the continuous operations of a business that cannot meet the requirements of a good business in the competitive world? Processes in the Production Department can be very technical in a manufacturing endeavour. It usually requires experienced Engineers and skilled labor, although some activities do not require any skills. The objective of the Production Division is to arrive at the required quality output at the right timing (that is, when needed by Marketing), and at the least cost. All these have been forecasted. Raw materials, labor, and technological knowhow are the input. That division can subdivide its activities into departments depending on the size and complexity of operations. Usually, it has a Quality Control Department that ensures arrival at close to 100% good quality production output while rejects are removed. It can also maintain the Repairs and Maintenance Department to attend to equipment breakdown and keep the machines running according to plan. One of the objectives of Production Division is to have a “controlled downtime” in order to maximize output of production. To make that happen, the division normally has the Purchasing Department that plans ahead and provides for buffer stocks of needed parts that should be ready when there is a breakdown. What would happen if there is a missing part and production stops because the equipment can’t proceed doing its work? There would be lack of products to sell. Sales will go down. Profits will be negatively affected. Another critical department or division of the organization is the IT group. Due to the advent of technology using computers, Management Information System which used to do the work of producing reports manually, now provides the input through Data Encoders using a programme that automatically generates the desired output. Some of those output are already analyzed in the form of charts, tables, and percentages. IT Division can be subdivided into the IT Security Department, Technical Support Department, Software Development Department, and EDP or Electronic Data Processing Department. Each of these would have their specified activities to make sure that the roles and objectives of IT Division are achieved on an ongoing basis. Top Executives would want to have timely and accurate. Delays can mean opportunity losses since there are times when decision making should be expedited in order that the company can take advantage of opportunities. Furthermore, all these divisions, department, and activities must work together in harmony so that there can be facilitations in the progress of the organization down to the people who have to be served and satisfied at all times. Top Executives of the different division should provide communications about problems and opportunities for improvements to make all personnel aware about desired behaviour that will resolve problems and generate desired improvements. Business processes are critical to the achievement of objectives and goals. They must be well attended to in order to arrive at positive results. In the case of Quick Fit Furniture Co. PLC, for a successful expansion and a corresponding development in the inter-department human relationships, there would simply have to be openness and objectivity in dealing with situations for the good of the company, so that changes will take effect and facilitate further growth. Reference: Harvard Business School Press (2010). Improving Business Process. Harvard Business School Publishing Read More