Often in the case of ERP implementations or automations, the question of standardization of processes is a key one. In this post we are going to discuss about the concept of processes, the necessity and advantages of the same.
A Process can be loosely defined as ‘a series of actions or steps taken in order to achieve a particular end.’ If we go by this definition, then everything we do can be tagged as a process. E.g. you reading this blog can also be called a part of the process to gain knowledge about processes.
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So what are business processes and what is standardization and automation of processes?
A process in business terms can be defined as ‘A collection of interrelated work tasks initiated in response to an event that achieves a specific result for the customer of the process.’
For Example: When a buyer sends in a PO, checking the stock in inventory, placing a backorder for non-available items and fulfilling the order once the stock is available can be called as steps in the process.
However, a standardization of process would arrange these steps in a sequence with addition/deletion of some steps and providing time, and quality constraints to the outcome of the steps e.g.
1. Check whether that PO is already entered in system before
2. If yes, then check on the status of the Order and sensitize the next actioner.
3. if not, then create an Order Acknowledgment and send a copy to the customer
3. Check the stock in inventory against the order at all locations
4. Backorder for items not in stock
5. Update expected delivery date in system and communicate that to customer.
Now you would notice that the steps taken are almost same however, the sequencing and small tweaks make the process standard.
Then the standardization would also allocate resources and owners to each process e.g.
1. Check whether that PO is already entered in system – Sales Executive.
There can also be timelines assigned to these steps like; ‘a new Sales Order Acknowledgment must be attended to within 4 working hours’ etc.
Now having standardized your processes, you wish to go to the next stage to make the process more efficient by automating it. So you go for a transaction management system which will take away the manual tasks like, tracking and linking of transactions, reminders, scheduling and passing the operational data to the finance and accounts team for financial entries.
In next post let’s discuss how an ERP system can help you to build, standardize and automate your business processes and optimize your resources to increase productivity keeping an eye towards quality.