Managing by Process

Generally speaking, there is no accepted definition of a process (Armistead et al., 1999; Garvare, 2002; Lindsay et al., 2003, Isaksson, 2006). The Concise Oxford Dictionary (2002) defines it as ―a course of action or a procedure‖; it goes on to state ―especially in a series of stages in manufacturing or some other operations‖. Slack et al. (2001) state that a process defines the relationship between the ‗component‘ products and services. Munro-Faure and Monro-Faure (1993:20) explain a process as ―any activity which takes an input and transforms it into an output‖. Similarly, Isaksson (2006:634) indicates a process to be ―a network of activities that, by the use of resources, repeatedly converts an input to an output for stakeholders‖.

Organisational processes can be classified according to different principles, two common ones being used for categorisation being: the nature of the process, and the hierarchies (Rentzhog, 1996). An example of the nature of the process is the classification into management, operative, and support processes, as noted for example by Cakar et al. (2003), Bergman and Klefsjő (2003), and Ould (1995). However, Harrington (1991) classifies processes into hierarchies and divides them into sub-processes, activities, and tasks.

Bessant et al. (1994) argue that a company‘s capability to improve and align its operation processes with strategic priorities is essential to achieve competitiveness in the long run. And concerning strategic priorities, Carpinetti et al. (2003) assert that it is vital to develop a conceptual framework for managing the process of systematically deriving improvement actions from customer expectations and strategic decisions through business processes, and prioritising improvement actions that will most contribute to strategic objectives.

Many researchers (e.g. Garvin, 1983; Juran, 1978; Crosby, 1979; Deming, 1982; Monfon, 1982; Motwani, 1994) have proved the hypothesis that a comprehensive process design improves the level of quality. And Feigenbaum (1991) in his Ten Benchmarks of Total Quality also acknowledges that quality is a company–wide process.

Berman and Klefsijo (1994) and Straker (1995) observe that in the Japanese manufacturing quality approach, process improvement frameworks are established based on the Deming cycle, which generalises the improvement process into four activities: plan (decide what to do, and identify how you will know if it has worked), do (do what you planned, and measure

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it as planned), check (check results against expectations), and act (hold the gain, and learn from experience)

The requirements contained in 4.1 of ISO 9001:2000 provide a relevant guideline for organisations to be able to define their own processes and activities as a function of customers‘ satisfaction and, more in general, of the attainment of quality objectives.

The EFQM Excellence Model (2010) and Baldrige Model (2009-2010) stress process management as one of their criteria to optimise stakeholder values. They emphasise the need to examine how the organisation designs its work systems and how it designs, manages, and improves its key processes for implementation.

Kanji‘s (2001:264) Excellence Model states ‗All Work is Process‘ thus showing the extent to which the organisation:

- has processes that are designed to meet the quality requirements - assesses the quality of its processes

- determines which are the critical processes and selects adequate control points - applies appropriate statistical methods to control its processes

- uses assessment results and benchmarking to enhance knowledge about processes

Additionally, Kanji (2001) stresses that all processes have variability, recognising that the main role of QM is to reduce variation. Carmignani (2008) also proposes that the QM system is necessary to define quality policy and objectives, to reach such objectives, and to preserve them in time, steadily improving their effectiveness. Moreover, he mentions that the system usually consists of complex inter-related processes such as: running actions, strategic planning elements, resource identification and management, personnel, and supplier management, which all inter-relate with the whole company business even if they are not directly accountable for product quality

Measuring and evaluating such processes is a pivotal step of process management. It is critical to visualise the processes and their interaction, and then the performance of each process must be measured against the planned and expected results. Actually, the organisational process performance can be assessed according to the processes, or the outputs, but it can be also based on inputs (Melan, 1992; Tsim et al., 2002).

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Tsim et al. (2002) recommend adopting the process-based approach which means, first of all, identifying the processes necessary to achieve a product or service, defining the interactions of such processes among themselves and applying to their management (control), both at a global and at a single-process level, the Plan-Do- Check-Act (PDCA) principles. Quality control activities can be based mainly on the application of statistical quality control techniques. According to Deming (1982, cited in Motwani et al., 1994), statistical quality control provides the means for analysing the process, continually improving the process, and controlling the product quality through control of the process.

In respect of services, Sureshchandar et al. (2001:385) state that ―service process management essentially refers to the procedures, systems and technology that are required to streamline the service delivery i.e. it delineates the non-human element of service delivery. Service delivery process should be perfectly streamlined, standardised, and simplified so that customers can receive the service without any hassles‖.

Milakovich (1995) stresses that TQ processes must be able to transfer knowledge swiftly since responses to the customer should be dynamic and quicker than those of competitors.

Zemke and Schaaf (1990) state that a study of 1,500 Consumers by Cambridge Report, a Massachusetts-based research firm, found that 44 respondents indicated that they were intending to run a financial firm. The relative ease of doing this was the result of the development of technological capabilities (e.g. computerisation, networking of operations, etc) which played a significant role in modernising and simplifying the service delivery.

Actually, during the last two decades, banks have noticeably developed their working systems and process activities, largely adopting service delivery technology as a way of amplifying the services traditionally provided by bank personnel (Joseph and Stone, 2003). Various reasons have been identified for introducing new systems such as: saving costs to enhance the overall operating efficiency of banks, meeting the challenge posed by technologically innovative competitors, and meeting the customers‘ preferences to use self– service delivery systems (see for example, Byers and Lederer, 2001; Howcraft and Beckett, 1996; Kelley, 1989; Pyun et al., 2002; Quinn, 1996). Undoubtedly, the technology has changed the way banks interact with their customers. Now, it takes hours and not weeks to open a new account and transactions can be initiated from any location with a computer. The competition has compelled banks to respond to their customers‘ needs promptly, and to do

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this, processes must be standardised, transparent and well orchestrated. In the world of financial services, a single mistake can drive a customer to a competitor (Kopp, 2010).

Cowles and Crosby (1990) believed that most individuals are willing to accept some levels of increased technology if they are granted some levels of autonomy. Furthermore, they considered empowering customers by providing them with the option of using technology– based service delivery systems, which is an inexpensive way to maintain customer loyalty