Let us state in the first instance that process audit is a combination of art & science and one size does not fit all!
A good business process audit offers a major impetus for organisational change. It identifies major problems, duplicated efforts, or it can simply note current operations and identify improvements within the current effort. Whatever the outcome, an audit that stimulates senior management to consider its business processes is worth the modest time and effort involved.
The most valuable audit will present a comprehensive overview of the organisation, providing senior managers with an overview of their situation, a vision of what their organisation could be like if it were more process-centric, and recommending specific steps that are reasonable in terms of corporate strategy, goals, and resources. A given organisation may not have a high-level business process team or process management structure in place. It is important to recognize this and note what this may be costing the company, even if this is not the first priority in terms of business process change.
The audit charter may require modification because of an organisation’s decision to implement process projects. Process considerations require the BP auditor’s scope of work or relationships with other audit functions (such as, financial and operational) to be expanded and more closely integrated.
It is imperative that the organisation’s senior and system management fully understand and support the BP auditor’s role(s) as it relates to process audit project planning.
MBA consultant(s) works with a team(s) of subject matter experts (SMEs) to apply our business process audit approach to your current business-operating environment to assess the necessity of improvements and to identify enhancements that would streamline the process. Outlined here is the MBA approach:
1. Organisational Management Considerations
§ The organisational readiness and capability assessment (ORCA)
§ The company strategic and goal setting process
§ The company planning process and its concern with processes
§ The involvement of senior management in business process change
§ The organisation design
§ The state of the organisation’s business process architecture
§ The process by which the organisation creates and maintains its business process architecture and aligns with is business architecture and technology architecture
4. Business Process Management
§ How the structure of the organisation support processes
§ Process goals, measures, and managerial evaluation
§ How process change projects are organized and managed
2. Business Process Methodologies Employed
§ Past practices
§ Current plans and organisation
§ Methodologies and software used
§ Staffing and knowledge management for process change
3. Human Performance Considerations
§ Ties between job descriptions, incentive systems, activities, and processes
§ Alignment between supervision job descriptions, process monitoring, and controls
§ Consistency and quality of performance
§ Ongoing process maintenance practices
5. IT Considerations
§ Ties between IT priorities, applications, and processes
§ Business-IT Alignment: Relation of process, application, and data architectures
§ Ability of IT infrastructure to support corporate goals and process improvement plans
§ New IT technologies being explored for business process modelling and monitoring
A process audit may be extremely pervasive. One outcome is a substantial modification of all organisation processes and relationships. The main results of a process audit can therefore be summarised as follows:
§ Strategic in concept;
§ New business priorities based on value and customer requirements (customer driven, output focused) with concentration on process (focus on key business processes) as a means of improving product, service and profitability;
§ New approaches to organising and motivating people inside and outside the enterprise;
§ New approaches to the use of technology in developing, producing and delivering goods and services;
§ Redefined roles for suppliers, including outsourcing, joint development, quick response, just-in-time inventory and support; and
§ Redefined roles for clients and customers providing more direct and active participation in the enterprise’s business processes.
1. Principles help with the innovative thinking necessary to change the process structure. The principles are mainly of value in what is ordinarily the most difficult stage of process projects, namely considering the options for changing the process.
2. The process principles suggested by Hammer are as follows:
2.1 Combine several jobs;
2.1. Workers make decisions;
2.2. Perform steps in a process in a natural order;
2.3. Processes have multiple versions;
2.4. Perform work where it makes the most sense;
2.5. Reduce checks and controls (while controls on implementation are critical);
2.6. Minimise reconciliations;
2.7. A case manager provides a single point of contact; and
2.8. Hybrid centralised/decentralised operations are prevalent.
3. Others, including Carter and Handfield, suggest carrying out the process activities in sequence:
3.1. Simplification (which includes elimination of non-value added activities),
3.2. Standardisation;
3.3. Integration;
3.4. Parallelism;
3.5. Variance control;
3.6. Resource allocation; and
3.7. Automation.
They indicate the process should tackle steps 3.1 to 3.7 in a strict sequence. For example, it would be wrong to attempt automating a process with an IT application without first considering its simplification. Not only could simplification make automation redundant but also the full benefits of automation may not be realised either. However, there is a danger in restricting the thinking process to a strict sequence. For example, integration of activities requiring different resources into a single activity carried out by an individual may sometimes become possible only with automation.
Frequently, a holistic view is the best approach.
The availability of appropriate process audit tools that help in reducing process risks can greatly benefit organisations that undertake process projects.
Given an existing or a new business Process, a typical process tool supports its modelling, analysis and evaluation, and the simulation of its probable behaviour.
The diagnostic phase is central for the identification of performance improvement opportunities and obstacles, process tools play an important role in the process project. The BP auditor should also review the process tools.
1. In process audits, we perform reporting progressively and identify risks and issues;
2. Address reports to the appropriate management for necessary action;
3. Issue final reports listing all raised issues during the review; and
4. Depending on the type of review, the report should address aspects such as:
- Appropriateness of the process approach model and methodology;
- Risks and issues, their causes and effects;
- Possible risk mitigation actions; and
- Cost/benefit comparison and effect on the organisation’s environment.
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