The Concept of Process Assessment (Raison d'etre)
Such inextricably entwined is the global market, and such is the rat-race in competition, that in many markets companies are coerced towards increasing efficiency which is one of major factors underlying the growth of companies. Though the growth of companies is in response to the rise in efficiency, many large companies could easily turn out to be less efficient than small companies. Furthermore, taking into consideration the large volume of the initial investment and the flow of their liquid assets a diving efficiency could bear grave consequences on both financial and nonfinancial assets of the company.
The present paradigm of maintaining a company dictates nothing but the growth. Otherwise, sooner or later, the company becomes history. In addition to the financial aspects, the potential local, national, international, environmental, social and political repercussions associated with a medium or large size companies’ activities could prove to be rather costly. Reaching an adequate threshold of productivity and efficiency requires both proper developmental- entrepreneurial planning and the precise control of the companies’ activities. Otherwise, the loss inflected could by far outweigh the likely forecasted profits. The optimum processes in an organization could prevent occurrence of such scenarios.
The rationale underlying establishing an organization is to embark upon a task that cannot be achieved by a single individual. Once more than an individual is involved in performing a project or a process, it is logical to assume that naturally, each and every person practices his or her own mannerism in conducting the assigned task, let alone attempting to outdo do the others. However, such trend could adversely affect another individual who is engaged in the process mitigating the efficiency. Nonetheless, it should be punctuated that the objective must be a homogenous performance - independent of the personal preferences, and such cannot be achieved but through proper documentation. In the view of the atmosphere prevalent in organizations, only accepted processes are the ones that have been accordingly documented.
Alternatively, there is also ambiguity regarding what the optimum procedure for achieving a task is and how the effectiveness should be interpreted. Defining effectiveness in terms of “Cost-effectiveness” and “Making the best number” leads to two other ambiguity. Firstly, whether or not the long-term or the short-term cost-effectiveness is in sight. Furthermore, at times the maximum profit is not always financial and cannot be easily quantified. Secondly, how it could be determined that the task which is being optimally achieved is the best one, much less whether it produces the best outcome. The answer to all these questions lies within the processes of an organization. It is the organizational processes that empowers the trends prevalent in an organization turnout homogeneous. The processes by reducing parallel functions and activities lead to mitigating the costs. More substantial is the fact that the processes are the corner-stone of predicting the organizations behavior. And the predictability is the foundation of targeting and in turn targeting is a major step in reaching the objectives. Moreover, it is a prevalent belief that if something cannot be assessed it cannot be managed; thus an adequate assessment is the first and foremost step of improvement in any context you care to name.
Once an organization determines a strategic target, it is required to modify its processes in order to reach the so called target. Productivity is commonly defined as a ratio between the output volume and the volume of inputs. In other words, it measures how efficiently production inputs, such as labour and capital, are being used in an economy or, say, a company to produce a given level of output and by definition, processes are the major players in Productivity.
In addition to the numerous advantages associated with the processes, their inherent nature as organizational knowledge leads to their inclusion in the list of intangible assets of the companies. Moreover, in the absence of mature and well documented processes each employee could be playing a different tune. Alternatively, there could be various processes for defining the organizational targets of which the most distinguished are planning and management. Moreover, such optimum processes could guarantee the effectiveness of the other organizational processes. Indeed, the issue that must be taken into account is the developmental processes versus the control processes. In other words, the processes are what lead to efficiency (Cost Reduction) and effectiveness (Increased Profits). More optimum maturity and documentation of the process will inevitably lead to better odds in reaching the various set targets as well as having in picture more dependability of various activities within the designated time frames.
Nowadays, the start-ups are the main subjects of discussion between the innovators and the entrepreneurs. For a start-up to be an upward path to prosperity, it must either grow or be part of a merger with a large company. Processes are the invisible binding matrix that hold various activities of companies in a state of cohesion; thus mounting to a surge in assets.
The set of mentioned assessments arms the company managers with the awareness regarding the activities in a given process that are not executed at the time, however, if executed, could lead to short-term and long term solutions to problems and mitigation of the risks.
The Assessment of Risk Management Processes
No business is without risk. Actually, from the time a decision is made regarding starting a business and all through the active life of the company, risks are the constant companions of the proprietors and managers. During their life cycle companies experience various distinctive risks. Initially, the risks are simple and easy to predict; however, as a company matures up the frequency and complexity of risks are increased. Meanwhile, the processes of the risk management changes from a flat world to a complex one. As the company grows and matures the significance and role of the risks are high-lighted and demand more thorough considerations.
Techchi’s research into this matter clearly illustrates the fact that risk management in The Iranian companies are not desirable. As a matter of fact, the risk management in Iranian companies fluctuates between 29 percent and 49 percent- 100 percent being the best case scenario.
The processes of risk management assessment engulfs prediction, control and minimizing the potential risks that company could be susceptible to. The process assesses 19 major processes of which the chances of returning to the original state once the risks are eliminated (reversibility), managing the adverse environmental impacts, managing coordination and managing company risks are to name but a few. In addition the robust and frail processes are also identified.
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