Operational/Transactional Processes

Perhaps the most frequently used and the most important type of processes in any company are the operational processes. These are processes which define the primary activities that a company needs to perform in order to successfully execute its business.

It is very important to understand the concept of value stream and map the same before beginning to develop operational processes. After all the process ought to be designed from the point of view of the customer. They are the ones that are going to finance the entire organization.

As we know that processes can be defined with the help of inputs, outputs, sequential activity and an objective, let’s see how to put the pieces of the puzzle together to manage and improve business processes.

The Role of Inputs: Inputs are required by every process to perform work. Inputs may be in the form of men, money, material, machinery, knowledge and information. It is important to understand that some inputs like men, money and material are approximately proportional to their usage. This means that the more you use of them the more it costs you. Hence the objective of any operational process is to ensure that resources are utilized in the most conservative manner possible. At the same time other inputs like knowledge and information have little cost and can improve the efficiency of the process drastically as we shall see later. The objective is to use them to reduce the amount of inputs required thereby bringing down the cost.

Search for the Best Practice: It is important to understand that processes follow the principle of equifinality. This means that the same process can be designed in “n” number of ways. Considering your objective in mind, all the possible alternative ways must be explored.

Break free from the traditional mindset and use some lateral thinking to develop alternatives before a choice is made. The idea is to choose one best practice which will meet the company’s objectives best. However it is important to understand that even after the choice regarding the best practice has been made, a company must be constantly on the vigil to ensure it doesn’t become obsolete. Technologies keep on evolving over time and along with them, best practices have to evolve too or else one stands the risk of being rendered obsolete by a well informed competitor.

Standard Operating Procedure: Once the process is decided it must be documented and created as a manual. This manual must then be given to all employees during their training. One must ensure that the process is built in such a way that only the best practice can be followed. If the employee has choices between alternative courses of action, the design is faulty. What is the point of studying alternatives and coming up with the best one, if the employees are not going to follow it in a standardized manner? This standardization creates uniform levels of service and standardized quality no matter where the service or product is delivered.