process management auditing

Process Management Auditing v51 October 2003

The High Performance Organisation Ltd

Process Management Auditing

October 2003The High Performance Organisation Ltd



Course objectivesGiven any process delegates will be able to:

• Plan and implement an effective process management audit/ assessment

• Report findings that add value to the business

• Use the techniques to support areas for improvement



Agenda – Day 1 Introductions

Process management review & types of audit/assessment

Planning & preparation

Lunch

Opening meeting

Process audit (part 1)

End of day 1



Agenda – Day 2Process assessment practice

Identifying findings and draft reporting

Lunch

Closing meeting with process owner

Assessing improvements

Summary

End of day 2



Session 1

Process management review&

Process auditing /assessment in practice



Exercise 1For a ‘Bus’ company:

1. Define a ‘high level’ process map2. Create 4 measures of performance

From this:

3. Are there any aspects of process management you would like to raise?



Principles of auditingSource: ISO19011:2002

• Ethical Conduct• Fair Representation• Due Professional Care

Relating to auditors:

Relating to audit itself:• Independence• Evidence-based approach

What is the purpose of auditing?



Types of auditing & assessment

Compliance

Process

System

?



Types of auditing / assessment

• Compliance auditing - Right or wrong

• Process management - Checking the flowassessment - The management of an individual process

• System assessment - The collective management of all processes in the system

- Links and impact of external relationships

- Inclusion of required frameworks



Compliance auditing

Com.Com. Com. Com.

Training Guide

Photograph



Process management assessment

Com.Com. Com. Com.

Tar Act Var

Inputs Outputs

Knowledge

ResourcesCompetence

Teamwork + Ownership

Budget

LearnChange

Risks etc.



Process management assessment

Process objectivesand targets

Purpose of process(supplier inputs & customer outputs)

The process itself

Key performanceindicators

Monitor performance & improve



Demographic & social changes

Systems management assessment

Innovation / inventions

The law & other regulations

Government policy

The market for your products

A business in the real world

Products

Compliance to regulations

Environment

Shareholdervalue

Satisfiedcustomers



Stakeholder & customer needs ISO9004 / ISO9001

Business (quality) objectives

Processes

Key performanceindicators & other measures


Management informationsystems

Systems management assessment tests



Auditing & assessment in context

System level

Process level

ProceduresCompliance level



Session 2

Planning & preparing a

process management audit



Audit / assessment scheduleQ1 Q2 Q3 Q4

Purchasing/Fulfilment

Project Management

Financial Management

Creating The Concept

Business Planning

‘Based on your business needs’



Planning the assessment (1)

• Understand the system

• Understand the process

• Understand detailed requirements– Customer specifics– Framework specifics– Procedures / supporting information / etc.

Where would you find these in your system?



Planning the assessment (2)

• Create process management “Audit Checklist” – What to look at / for

– What ‘questions’ would best gather required evidence

• Create an “Audit Plan”– Timescales

– Methods of auditing

– Auditees, etc.



Assessment planning

• Audit methods (groups, one to one, email,telephone, video conference etc)

• Plan to see process owner first & last• Elapsed time• Consider cross-functional contacts• Think about preparation time/breaks to gather

thoughts

‘audits are not just one to one’

consider:



Process management assessment tests

Process objectivesand targets

Purpose of process(supplier inputs & customer outputs)

The process itself

Key performanceindicators


Assessor tool 2

‘we use this to carry out every interview’



Exercise 2

You are about to assess the management of a process.Create a list of some areas to look at / questions to ask

under each of the headings of ‘Assessor Tool 2’

Part of the cycle with process owner with operational level (fromTool 2)



Remember

• Ask questions that test relationships of activity within the process

• Address issues that tests relationships with other activities in other processes

• Don’t forget to test the management of the process

• Don’t forget to test the process itself



What other things will you alsoneed to consider in order to

assess if the process is being managed effectively ?



Com.Com. Com. Com.

Tar Act Var

Inputs Outputs

Knowledge

ResourcesCompetence

Teamwork + Ownership

Budget

LearnChange

Assessor tool 3

Risks etc.



Exercise 3Select a process:

• Consider a number of possible items to include in an audit plan & checklist that tests process management using assessor tools 2 & 3

Area / Questions(look at)

Auditee(s)(method)

Why? (look for)(what objective

evidence will you get?)



Session 3

The opening meeting



Opening meetingWith process owner/leader

• Check plan is OK?• What would process owner want out of the

audit?• How is the report to be presented?• Use the ‘tools’ to audit management &

understanding



Exercise 4(interviewing the process owner)

Given the process you have selected, you have 15 minutes to prepare to interview the process owner

(the facilitator)



Session 4

Process auditing (Part 1)



Audit style

Staff

Directors

Management

Supervisors

Often non-documented objective evidence.

No right or wrong

Audit compliance

Assess management

Documented objectiveevidence

Right or wrong

‘auditors have to manage this dynamic’



Objective evidence

Therefore objective evidence is based upon

what is being audited/assessed and

will come in both documented and

non-documented forms

‘The question to ask is - How?’



Technique

•Show me•Tell me

•How do you know that?•Explain to me?

‘Show me your business plan?’

‘How do you keep staff focussed on customer needs?’

Staff

Directors

Management

Supervisors



Exercise 5(auditing non-documented objective evidence)

What questions would you ask to a Senior Manager and Staff member if you wanted to check that:

• Are all team members are working in a process and not in a departmental ‘silo’?

• That the process performance is understood?• That the aim of the process is focused on delivering profit &

customer satisfaction?

What non-documented evidence will you look for?

Manager Objective Evidence Staff Objective evidence



Agenda – Day 2

Process assessment practice

Identifying findings and draft reporting

Lunch

Closing meeting with process owner


Summary

End of day 2



Session 5

Process audit / assessment

practice



Exercise 6(interviewing the process owner)

Using the preparation you did yesterday interview the process owner

(the facilitator)

Max. 10 mins per interview



Exercise 7

Auditing group•Decide who will interview who in accordance with the plan

Auditee group•Decide who will be whom according to the process youare part of

Exercise•Each group will have 1 hour to complete their audit

(it is OK to have a planned time out)



Practice feedback

Consider the findings of the group & record(in preparation for report writing)

Then•What went well?•What could you do better?•Did you need paper?•How did you get the objective evidence?



Session 6

Identifying findings

& draft report



Findings?• Summary of finding

• Areas for improvement

• Non-conformances (major)

• Non-conformances (minor)

• Observations

• Free format/form

• Areas of strength/success?

Explain the impact on the business! e.g. ££££££££££££

Why will the owner be interested?



Exercise 8

Produce a draft report for the process you have audited

in the format the process owner wantedTime – 20 to 30 mins

Present the report to the process owner & agree findings

Meeting duration – 5 to 10 mins

USE THE NOTES FROM YOUR EXERCISES



Session 7




Planning the assessment of improvements

Identify / focus on the findings of :

- Previous assessments- Previous improvement activities

Then:

•Schedule & plan as before•Prepare as before•Carry out the assessment•Report as before.



Carrying out the assessmentof improvements

Check:

• Establish what action has been taken

• The effectiveness of action taken in relation to the original issue

• Escalate to ‘System Owner’ if no action.



Issues & differences

What Issues or Differences from the way you have carried out auditing in the Past

does process assessment create?

ISSUES DIFFERENCES

HOW CAN THE ISSUES BE ADDRESSED BY USING DIFFERENT ASSESSMENT APPROACHES?



Summary• What are the benefits likely to be in

adopting process management auditing/assessment?

• What are the key skills needed to apply process management auditing/assessment effectively

Any further questions?



Guidance, advice & support

Working in partnership with

The High Performance Organisation Ltd01604 470837

[email protected]



Quality (Business) Principles• Customer focus• Leadership• Involvement of people• Process approach• System approach to management• Continual improvement• Factual approach to decision making• Mutually beneficial supplier relationships.



Quality Management Process ModelContinual improvement of the quality management system

Customer Customer

Requirements

Satisfaction

Management responsibility

ResourceManagement

Measurement,analysis andimprovement

Productrealization

Product

outputinput



The critical clause - Clause 4

• Identify processes

• Determine sequence

• Operate & control

• Ensure resources & information to support operation & monitoring

• Measure

• Improve based on fact



Impact of new standard

MD

Directors

Managers

Staff

IS9001:2000

ISO9001:1994



Where are we now?

Customer needs

Business objectives

Processes

Procedures

ISO9001:2000 ISO9001:1994 - typical system

Management information

Customer needs

Business objectives

Processes

Procedures

Management information



Processes v Silos - ISO9001:2000

Deliver the service?

Dept 1 Dept 2 Dept 3 Dept 4 CUSTOMERSUnderstand Customer Needs

Manage Competence

Manage Resources

Develop & Communicate Objectives

Monitor & Improve Performance



Process Management

Target Actual Variance

75% 68% -7%

LearnImplement improvement project to change the process

Learn



Management System & Continuous Improvement

Continuous business improvement

Process based business systems follow:-

Plan

Do

Check

Act

Plan 1

Do1

Check 1

Act 1

Thefuture



The High Performing Organisation

Stakeholder requirementsCustomer requirements

Define & prioritise objectives

Define processesto deliver objectives

Identify Process Measurements

Create managementinformation system

Report on progressto meet objectives



Processes v Silos - Whole Business

Deliver the service?

Service Design & Development?

Business Planning?

Dept 1 Dept 2 Dept 3 Dept 4

Communicating & winning business?

CUSTOMERS

STAKEHOLDERS



Complementary Standards & Frameworks

ISO9001

ISO9004Eg Customer – ISO9001Stakeholder – ISO9004

Excellence Model



Management System StructureMulti-level mapping

Owner - Head of ScopeManagement System

Process Owner - Process Owner

‘the what’

Procedure/Information

‘the how’

measure efficiency and effectiveness

measure business performancefinance, customer, process, people

Training Guide

Photograph



A Typical System?Understanding

theMarket

Monitor & measure

Performance

CommunicateServices

Design / enhanceServices

BusinessPlanning

Bringing aboutchange

Deliver Services

ManagingAssets

ManagingPeople

Managing Finance

What are your processes?

process management auditing

Documents