Process-based management is a process management approach that emphasizes recurring processes nad activities and their flow across the organization. Process-based management tries breaks down the hierarchy created by organizational structure, whereby a process is divided by departmental view and each business unit has own responsibilities, activities and processes. It creates organisational obstacles to the process flow. Because if the organizational structure is too functionally focused (that is, each unit only does its specialization), workers tend to create barriers to the processes that go across the company. Barriers are mainly in communication and thus in work-flow. This has a negative impact on the performance and effectiveness of the entire organization.
Its opposite is project-based management approach.
How does process-based management look like in practice?
Process-based management has a priority the process regardless of organizational structure. It also emphasizes the customer of the process (whether the internal or the external) and the person responsible for the whole process (the so-called process owner). The process is evaluated according to how the process customer is served by the process. At the same time it creates a simple and direct assessment of effectiveness - if the process does not bring value to the customers or other processes, it should not exist.
In a process-driven organization, the organizational structure is tailored to the processes that cross the company. Thus, the overall management system supports business processes as much as possible. The responsibilities of the workers and the division of the activities are tailored to only this: how the workers are organized.
In particular, the process-oriented approach helps to improve overall customer benefits (such as speeding up delivery) and helps increase overall business efficiency (by removing unnecessary processes or simplifying processes).
- Process-based management is primarily applied to recurring processes (for example, billing process).
- Each process has some process customer
- Each process provides some added value to its customers
- Each process can be measured using some metrics (output quality and other process metrics) and these can be reflected in the motivation system
- Every process has some process owner (a responsible person for entire process)
- All processes can be continuously improved
Process-based management must be part of the culture of the organization and its success always depends on the personal commitment and interest of the company management.
Limits of the process-based management
Not all processes in the organization are repeated and not all processes go through the entire organization. So process-based management must not be overestimated and is not a salvation for everything.