Process Management Auditing Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd

2 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Course objectives Given 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

3 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Agenda – Day 1 Introductions Process management review & types of audit/assessment Planning & preparation Lunch Opening meeting Process audit (part 1) End of day 1

4 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Agenda – Day 2 Process assessment practice Identifying findings and draft reporting Lunch Closing meeting with process owner Assessing improvements Summary End of day 2

5 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Session 1 Process management review & Process auditing /assessment in practice

6 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Exercise 1 For a ‘Bus’ company: 1.Define a ‘high level’ process map 2.Create 4 measures of performance From this: 3.Are there any aspects of process management you would like to raise?

7 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Principles of auditing Source: 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?

8 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Types of auditing & assessment Compliance Process System ?

9 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Types of auditing / assessment Compliance auditing- Right or wrong Process management- Checking the flow assessment- 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

10 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Compliance auditing Com. Training Guide Photograph

11 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Process management assessment Com. Tar Act Var InputsOutputs Knowledge Resources Competence Teamwork + Ownership Budget LearnChange Risks etc.

12 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Process management assessment Process objectives and targets Purpose of process (supplier inputs & customer outputs) The process itself Key performance indicators Monitor performance & improve

13 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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 Shareholder value Satisfied customers

14 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Stakeholder & customer needs ISO9004 / ISO9001 Business (quality) objectives Processes Key performance indicators & other measures Monitor performance & improve Management information systems Systems management assessment tests

15 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Auditing & assessment in context System level Process level Procedures Compliance level

16 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Session 2 Planning & preparing a process management audit

17 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Audit / assessment schedule Q1Q2Q3Q4 Purchasing/Fulfilment Project Management Financial Management Creating The Concept Business Planning ‘Based on your business needs’

18 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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?

19 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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.

20 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Assessment planning Audit methods (groups, one to one, ,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 :

21 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Process management assessment tests Process objectives and targets Purpose of process (supplier inputs & customer outputs) The process itself Key performance indicators Monitor performance & improve Assessor tool 2 ‘we use this to carry out every interview’

22 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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)

23 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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

24 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing What other things will you also need to consider in order to assess if the process is being managed effectively ?

25 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Com. Tar Act Var InputsOutputs Knowledge Resources Competence Teamwork + Ownership Budget LearnChange Assessor tool 3 Risks etc.

26 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing

27 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing

28 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing

29 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing

30 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Exercise 3 Select 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?)

31 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Session 3 The opening meeting

32 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Opening meeting With 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

33 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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)

34 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Session 4 Process auditing (Part 1)

35 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Audit style Staff Directors Management Supervisors Often non-documented objective evidence. No right or wrong Audit compliance Assess management Documented objective evidence Right or wrong ‘auditors have to manage this dynamic’

36 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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?’

37 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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

38 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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

39 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Agenda – Day 2 Process assessment practice Identifying findings and draft reporting Lunch Closing meeting with process owner Assessing improvements Summary End of day 2

40 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Session 5 Process audit / assessment practice

41 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Exercise 6 (interviewing the process owner) Using the preparation you did yesterday interview the process owner (the facilitator) Max. 10 mins per interview

42 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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 you are part of Exercise Each group will have 1 hour to complete their audit (it is OK to have a planned time out)

43 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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?

44 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Session 6 Identifying findings & draft report

45 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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?

46 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Exercise 8 Produce a draft report for the process you have audited in the format the process owner wanted Time – 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

47 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Session 7 Assessing improvements

48 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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.

49 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Carrying out the assessment of 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.

50 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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?

51 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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?

52 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Guidance, advice & support Working in partnership with The High Performance Organisation Ltd

53 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing 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.

54 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Quality Management Process Model Continual improvement of the quality management system Customer Requirements Satisfaction Management responsibility Resource Management Measurement, analysis and improvement Product realization Product output input

55 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing The critical clause - Clause 4 Identify processes Determine sequence Operate & control Ensure resources & information to support operation & monitoring Measure Improve based on fact

56 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Impact of new standard MD Directors Managers Staff IS9001:2000 ISO9001:1994

57 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Where are we now? Customer needs Business objectives Processes Procedures ISO9001:2000ISO9001: typical system Management information Customer needs Business objectives Processes Procedures Management information

58 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Processes v Silos - ISO9001:2000 Deliver the service? Dept 1Dept 2Dept 3Dept 4CUSTOMERSCUSTOMERS Understand Customer Needs Manage Competence Manage Resources Develop & Communicate Objectives Monitor & Improve Performance

59 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Process Management Target Actual Variance 75%68%-7% Learn Implement improvement project to change the process Learn

60 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Management System & Continuous Improvement Continuous business improvement Process based business systems follow:- Plan Do Check Act Plan 1 Do1 Check 1 Act 1 The future

61 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing The High Performing Organisation Stakeholder requirements Customer requirements Define & prioritise objectives Define processes to deliver objectives Identify Process Measurements Create management information system Report on progress to meet objectives

62 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Processes v Silos - Whole Business Deliver the service? Service Design & Development? Business Planning? Dept 1Dept 2Dept 3Dept 4 Communicating & winning business? CUSTOMERSCUSTOMERS STAKEHOLDERSSTAKEHOLDERS

63 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Complementary Standards & Frameworks ISO9001 ISO9004 Eg Customer – ISO9001 Stakeholder – ISO9004 Excellence Model

64 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing Management System Structure Multi-level mapping Owner - Head of ScopeManagement System ProcessOwner - Process Owner ‘the what’ Procedure/Information ‘the how’ measure efficiency and effectiveness measure business performance finance, customer, process, people Training Guide Photograph

65 Version JP.10.1-UK Oct 03  The High Performance Organisation Ltd Process Management Auditing A Typical System? Understanding the Market Monitor & measure Performance Communicate Services Design / enhance Services Business Planning Bringing about change Deliver Services Managing Assets Managing People Managing Finance What are your processes?