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Mr. Ajay Sharma, an automobile engineer,established his own manufacturing unitof automobile parts. He starts his day early at 9.00 A.M and ends the day at 8pm with lot of unfinished work for next day. He gets engaged in   almost all the business issues daily and hardly gets time to think for business strategies, future business plans and to work out value added or constructive thinking for his business. Coincidently, he met his batch mate, joyful and positive Sanjay Varma, in one business meet who is also in same activity of business as Mr. Ajay was in.Mr. Ajay was curious to know about thewisdom behind Sanjay’s smileand unbound business routine
Inquisitively, Mr. Ajay asked,how do you tackle the problems of staff absenteeism, increasing cost of resources, dependency on others, repetition of mistakes and consequential turbulences etc? Mr. Sanjay’s answer was simple,“Entire organisation is process driven”. Reports, papers and presentations which he refers daily are generated out of system, helps him in decision making and planning. He spends his quality time only on strategic decision making and achieving continuous improvement in the business. “This is the power of commitment towards establishing good business process in organization”, Sanjay further added.

Following Para’s in this article is an endeavor to understand the need, importance, and usefulness of good business processes and procedures. Keeping in view, the problem faced by the Small and Medium scale Enterprises (SME), where the constraints are more and resources are less, good business process and procedures can definitely help the business to run smoothly and support the bottom line. Experience has shown that generally these businesses unfortunately are more involved into solving their own mistakes, problems rather than concentrating on business entirely. The effort has been made to help the MSME’s to start thinking to build good business procedures.

Meaning of business process:

A business process is a set of predefined coordinated tasks and activities, conducted by engaging various moving, non moving, tangible, intangible resources, that will lead to accomplishing a specific organizational goal. We need to have a systematic approach to improve those processes. The objective should be, to make the process more and more cost effective, time efficient and result oriented.

There are three types of processes:

• Operational Process
• Management Process
• Supporting process

Operational business processes:

Functional processes are considered as main business processes since together they are being adhered to achieve business goals. Some of them areManufacturing, Sales and Marketing, Purchases, Inventory 
Good understanding of each function and the deliverables of each such function is needed to build up good procedures within the processes.

Management Process:

Management processes are helpful in policy framing, decision makingand setting up the internal controls. Some of the commonly applied processes are Corporate or Entity Governance, Strategic Process, Reviews of operations etc.

Supporting Process:

Supporting process always functions in parlance with the main process with an objective of improving efficiency, effectiveness. Supporting processes are mainly designed for:
Finance and Accounts, Administration and HR, EDP/ IT Department.

Need of good systems, process and procedures:
Now days, Business entities are recognizing power of Business Process Management to strategically focus on managing cross-functional, customer facing and enterprise-wide business processes. 
The core driver for process development is the desire to reach to 
• Enhanced performance, Risk reduction,increasingefficiency,Reducing dependency on personnel.Reduction of frauds, Building up good (decisionsupport)MIS systems etc.

Challenges before SME’s:
• Constraints of Resources as regards their availability, efficiency and Optimum use,
• More operational mistakes than accuracy by staff, Plenty of Non value added activities,
• More mislead efforts than building up value chain
• More intangible cost than savings 
• Flight or Maintenance of Talent (i.e. Staff attrition)
• Entrepreneurs unwillingly get involved in daily routines than on business 
JUST THINK, how many small and medium scale businessesface problemswhen their key person (staff) has left the organization? Because of over-dependency on individuals and lack of process documentations, these businesses get dislocated for a considerable period.  Every loss of time in this era of competition has got its own intangible cost which may pose significant dent to the organizations progress.The organization should adopt following methodology “LET THE SYSTEM AND PROCESS WORK IRRESPECTIVE OF PERSON RUNNING IT.”The success of large business houses lies in their process driven approach rather than person driven approach. The best example of process driven organizations (illustrative) areICICI bank, Infosys,Tata, HDFC, on and on.

Pre-requisites to building up good business process:

To build up good business process the organisation must have described Goals, Objectives, Corporate strategies, Management and Staff support, Desire to change and adopt new challenges, Consult to experts with open mind.

Are you following the right procedures?

In small and medium scale enterprises, the question whether we are following the right procedures? is hardly asked. Generally due to business pressures, this aspect is always ignored. However, it is firmly believed that FOR EXPANSION OF BUSINESS, THE ORGANIZATION’S HUMAN CAPITAL ANDADOPTION OF GOOD BUSINESS PROCESSES IS UTMOST NECESSARY. It is not easy to launch a satellite without jerk of firm base. 
Now days, major companies are resorting to periodical Business Process reviews, reengineering, Internal Control reviews through professionals in spite of having good existing processes to earn competitive edge. The approach always intends to take them to perfection vide continuous improvement and result oriented upgradation.

SME’s need to tender answers to following:
• Whether processes are really framed and designed?
• When Business Processes were last critically examined?
• Are they logical, coherent, effective, efficient and user-friendly?
• Do they allow your business to flow effortlessly and profitably?

• Could your organization survive in long run despite of good processes?

The experience has shown that the organization can grow upto certain extent without proper procedures and disciplines but after some time the organization cannot achieve heights.

Time ahead:
It is certain that the time to come will bring lot of opportunities to business of all sectors where the survival would be depending upon cost consciousness, ethical practices and quality deliverables and transparency. With reduction in margins due to competition, small and tiny errors would cost the business entities dearly. It is certain, with good business processes, procedures and documentation thereof, the MSME’s would also be process driven and ready to compete and match with big organizations globally. Sincere efforts of transformations would definitely take SMEentrepreneurs tothe zenith, as achieved by Mr Sanjay Varma.

Author CA. Nitin Alshi is member of Institute of Chartered Accountants of India. He can be contacted at nitinalshi@gmail.com