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How does one go abut designing a process?
Remember when we talk about "process design" we art NOT talking just
about designing a new product (e.g. new type of food) or a new service (e.g.
new type of mortgage). So let's start with a review of "What is A Process?
James Brimson in his book "The Handbook of
Process-based Accounting, Leveraging Processes to Predict Results
published by American Institute of Certified Public Accountants, defines a
process as:
- "A process is a repeatable series of operations that consume
resources to alter material, energy, or information into outputs that
are provided to customers."
So where do we start when we want to design a process? Obviously we
start with the external or internal customer!
We ask our customer what are your performance
expectations for:
- Quality: for example, how many errors
will you tolerate in our decision to approve a loan application?
- Time: what is cycle time you expect?
for example, from time a loan application is submitted, how long
should it take to review and make a decision on that loan application?
- Cost: for example, how much should it
cost our organization to process a loan application
Now that we understand the requirements
of our "loan approval process" we can begin to
design the process.
We can start to collect the activities or operations that we will need to
perform.
For example in our loan approval, some of the activities or operations we
need to perform are:
- Obtain completed loan application
- Obtain supporting documentation: payroll stubs, income tax returns,
home or car ownership
- Obtain credit reports
- Review application and make determination
Although we could break this down into much finer detail of operations,
this level of detail will be sufficient for our purposes.
We could:
- create a flow chart (also called a flow diagram or process map).
- include type of people needed (clerks, loan administrators, approval
committee)
- include type of computer systems that will be needed (e.g. access to
credit reporting agencies)
- look at what processes could be done automatically (e.g. if
documentation not received by a certain date, then automatically send
reminder letter or automatically approve all loans where debt to less than 2
times income)
- assign a process owner
Finally we need to get feedback from:
- our various process workers
- our customer
- vendors to this process (e.g. IT)
Based on this approach we can begin to implement the design of our
process.
Call John Antos, Jim Brimson or Pat Dowdle at
972-980-7407 to find out more about Process Control and Process Management.
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