A company can be envisioned as a connected system of processes generating a value chain, creating value for the customer (and therefore the shareholders). And every process has discrete transactions that are executed within it. These transactions ultimately get captured in records within a company’s systems.
Hidden within this transactional data is a tremendous amount of information that enables identification of quality problems or failures within the process. By using statistical techniques and cross checking against various sources, it is possible to identify an aberration or failure as it occurs.
A process failure is rarely catastrophic, and usually goes unnoticed by management (though usually not by the customer and line level employees). By process failure, we simply mean that a specific transaction failed to accomplish the objective the process was designed to accomplish. These failures result in substantial rework and additional labor for the organization, as well as loss of brand image in the customer’s eyes.
A broken process ultimately translates to revenue loss or unnecessary costs, hurting profitability — whereas optimized processes translate into competitive advantage and improved profitability.
SimpleGRC (simpleGRCsoft.com) uses a methodology and related infrastructure that identifies the specific transactions with aberrations in a process, as well as who is associated with the transaction. It is designed to capture the bad transactions soon enough for correction before the transaction cycle completes. It allows for either a top down approach or a distributed approach to monitoring and remediation of the failed transactions, meaning that the reports and/or responsibility for corrections can be pushed out to operational personnel so they can self-police, or remain with managers or a Quality Group.
The number of processes that can be monitored is unlimited once the SimpleGRC software infrastructure is put in place, but the biggest “gains” are from the processes related to Disbursements and Revenue. Triple-digit ROI is typically obtained from using SimpleGRC software to monitor Accounts Payable (including T&E reimbursements), Payroll, and Revenue related activity reflected in the Sales Order and associated tables of an ERP system.
In addition to the Disbursement and Sales related transactions, significant ROI, quality improvements, and compliance can be obtained from monitoring of other processes and their transactions. For example, compliance failures outside of these areas can directly translate to statutory penalties in some industries. SimpleGRC software can easily create 100% compliance as well as provide documentation of compliance.
SimpleGRC software also provides tools for meta-reporting on the history of exceptions. Using Pareto charting, we usually see interesting patterns emerge, such as the same few employees being associated with mistakes, or the same few departments being associated with bad transactions. This data becomes invaluable in identifying where remedial action is needed.
If a pattern emerges in a certain department or with an individual, you can print out the history of aberrations, and call a meeting with the appropriate personnel to review and identify the root cause. It points in a very direct way to broken processes that are in need of re-engineering, thereby supporting and even guiding Continuous Improvement initiatives.