I take pride in telling my CMA professional colleagues, that if there is one area where CMAs beat hands down to other professionals (read chartered accountants, whom we are always jealous of and therefore continue to benchmark) colleagues it is “processes” Having privileged to work on processes and process manual in five companies by now, I thought of sharing experiences to my friends. And please be active and do write back your comments. SOPs as it is called is “standard operating processes”. For a change let us try a structured approach but with different thought processes on what it means. The preparation of SOPs is a mammoth task for FACT (finance, accounts, costing, taxation) leave aside making processes for all functions. Takes 6 months to 9 months for all functions. Of course depends on size, complexities, no. of people working.
Drafted in detail, minutely to cover all aspects of any area, the SOPs should serve as knowledge management tool.
GOALS
1. They should be Gita, Kuran, Bible of the organization.
2. Any new-comer joining, should not be required to ask anything to anybody, if SOPs are all-pervasive.
3. If somebody leaves, anybody taking acting or permanent charge should not require any hand-over
4. Any rotation in the dept or function or even cross function should be easy.
5. It should abolish all circulars of past when made first time. (I used to frequently hear when I joined any new company – our policy of booking medical expenses is provided in circular of 1978 prepared by e.g. Mr Mehta, when he was accounts head (now retired)
6. Everyday updation may not be possible, but certainly half-yearly or yearly updation and then abolishing all circulars during the year can make sense.
7. It should give leads to BPR exercise.
8. It should serve as a backbone to ERP implementation or refined ERP implementation if ERP is already implemented.
9. ERP process manuals may overlap the SOPs, but will have some distinct features nevertheless. E.g. SOPs will answer even odd questions like how many years supporting vouchers should be preserved. Or if the original bill is lost what is process of getting payment
10. Juniors do not have to consume valuable time of seniors in asking question to seek info.
11. Seniors should practice telling juniors a) either to refer SOPs for any of the doubts they ask or b) they should ask themselves “why this query arose? Doesn’t the SOP contain answer to this question? If so, do we need to refine SOPs further? And get it done.
12. SOPs should not remain on paper, they should be such, which should work as internal bye-laws for working.
13. They should be meant for transparency across organization. You will find queues outside some manager’s cabins. There invariably, is the knowledge hold-up in that cabin. Practically speaking 100% of those queries should be answered by SOPs. But conservative managers like to have queues outside their cabins. SOPs should aim at abolishing such queues. Such managers are definitely hindrances in knowledge management.
Formats
1. Not being a law, it can have different formats
2. Certainly they should ensure inputs, outputs and processes.
3. Some of the big-4 firms have done an excellent work on this front.
4. Nice to have flow-charts, but do not delay preparation and implementation for that reason, as it is a painful and time-consuming portion of SOPs. So prepare them parallely along with implementation phase.
5. Surely ensure – goal of that process or sub-process, applicability, authorizations, exception approving authorities, input and output formats are covered.
6. They should be readable and more than that reference able and with key word finders. Of course, I.T word files have made job easy with links to find
7. They should not be descriptive. They should be bulleted and tabulated as much possible.
8. Inputs should be stated with source, frequency & format including (email or upload on intranet or paper – stating no. of copies)
9. Outputs should also be stated with used by (i.e. to be sent to), frequency and formats including (email or upload on intranet or paper – stating no. of copies)
10. Role and responsibility of the process should be specified
11. Process effectiveness measures should also be specified stating objective and accountability.
12. Controls and risk mitigation also need be tabulated
13. Linkage to other related processes should be available as a cross-reference.
Applicability
1. Finance
2. Accounts
3. Costing & budgeting
4. Taxation (direct & indirect)
5. Audit (internal)
6. Inventory
7. Purchases/Procurement
8. Capex & maintenance
9. Legal & secretarial
10. Quality
11. Sales & Marketing
12. HR & Admn
13. I.T.
Net – net all back-office areas of all functions
WHO is best to do it?
1. The departments itself in fact, individuals performing tasks
2. Consultants
3. Internal audit dept
4. Quality ISO co-ordinators
How to ensure implementation?
1. Best way to implement is hold session for initial reading
2. Then ask people do you find anything missing. Many would like to criticize it. Accept and refine manual. Those whose changes are accepted in future ensure that manual is implemented. So accept everybody’s suggestions and incorporate something.
3. Advise people and try to put them in habit of any verbal interaction happening for office work, to ask to themselves “is this not in the manual?”
4. Keep AMC with consultants – as in the first year you may come across hundreds of things missing in manuals
5. Keep it readily available to everybody on intranet.
6. Test with new joinees. Ask them on joining itself to seat on intranet available at reception and test out whether they can start working without asking any questions to anybody.
Let us quote a live scenario
New budget manager has joined.
2. What are his questions?
A. Where do I seat?
Ans.: Write seating place and search – you will get directed to admin manual and will find seating place in office layout shown in that
B. What job am I supposed to do?
Ans.: Write job profile in search mode, you will get directed to HR manual and will find the same.
C. How do I get my email id, identity card, salary, PF, Medical?
Ans.: Write “employee” and you can go to ESS or employee self service module and find all
D. Where are stapler, pencil, and calculator?
Ans.: Refer admin manual get indent form e-fill it which goes to stationery dept and you get in 3 hours max.
E. Where are the past budgets? And when am I to prepare next budget?
Ans.: Refer Cost and budget manual. You will find all steps and document management links for all past data.
Like-wise new employee may ask where is canteen? Who is marketing manager, to collect sales data for budget?
Everything should be available in SOPs and manuals.
An extreme height could be “Why two people should require, to talk to, each other at all in a company?” “Why there should be meetings at all?” Honestly personal interaction and rappo does make organization live. But at the same time aim for SOPs and processes to become so much in-depth that really the interactions & meetings should reduce dramatically – Both in numbers and time.
So what will people interact upon at all
1. External environment,
2. Competition,
3. Improvements in SOPs due to miss-outs & lacunas,
4. New first time situations,
5. New businesses, new projects,
6. New ideas & Innovations
If people, in the whole of organization, interact only on above matters, then it will be really a knowledge-driven organization and will therefore become the most employee-productive organization. So friends, Attempt it you will find miracles happening. I have experienced it.
