Conversational dilemma: differences between project and process

What is the difference between a project and a process? How can they be defined, what characterizes them? Let's clarify the differences.

A process is a set of follow-up activities that have a certain sequence, are constantly repeated and transform inputs into desired outputs. The recruitment process when hiring employees for the new company department can be an example. Whereas the project is only a one-time thing, such as the establishment of a new department in the company.

The process can be linear - behind every single task, there is another one, etc. until we reach our goal. The process can be even more complex - it starts with one simple task, then branches into a set of activities that can be parallely performed by more workers, and then converges into one again.

Each process has its inputs (people, material, activities) and at the end, it generates outputs, that are often inputs for the next follow-up process.

But what is such a process good for? There can be several reasons for process management:

Efficiency

A company that knows what processes are needed from accepting a business order to the delivery of a product or service to the customer has an overview of the state of the order, who is responsible for each activity and what parameters the process should have. The management can then identify any wasting and bottlenecks much faster. In this way, the company can save a lot of money or shorten delivery time to the customer and thus gain a great competitive advantage in the market.

Standardization

A manufacturing company that struggles with product wasting caused by worker’s mistakes will have an established manufacturing process to ensure that no step is missed. The individual activities will be carried out with due precision and according to the prescribed specifications.

Substitutability

 Freelancers can use the processes when they decide to delegate easier tasks to a virtual assistant. Established companies experience employees’ turnover or deputizing during vacations or sickness leaves. A process-driven company can thus be much better prepared for delegating tasks to a new employee.

Stability

 Thanks to the implementation of process management the company will gain more stability and is ready to face increased customer demand. On the contrary, it can optimize its process as the economy starts to cool down.

Legislative and industry requirements

 With each new update, the ISO 9001 standard keeps increasing the requirements for process management in companies that have obtained the certificate. For example, automotive industry suppliers have then much stricter requirements for their processes, their management and optimization. The process audits on client’s demand often take place and their job is to determine whether the company is capable of stable and effective delivery of its products. These audits can take several days.

In a large and more complex company you can find several process levels. From the most basic (a process can be described as DELIVERY OF MATERIALS – PRODUCTION – STORAGE – SALE – SERVICE), when the entire departments are responsible for individual steps, to very detailed procedures and instructions, when the assembly of a certain part of the unit is noted down step by step.

 The advantage of described and revised processes is the possibility to evaluate their contribution to the company. If such processes are crucial for the operation of the company or represent the added value for a customer, we can then secure them much better. Otherwise, if some of them are unnecessary (they no longer meet the requirements of today’s customer, or are carried out only because they made sense in the past), they should be completely abolished.

 Each process should have a designated Owner. The owner is responsible for the whole process although he may not be (and often is not) its executor. He’s a kind of guarantor of its course and outcome. The executor of the process carries out the process or its part respecting their own competencies. The supplier of the process can be the outcome of the process that preceded it. The customer of the process can be both internal and external. The customer orders it from the executor and defines its outcome, quality, speed and other parameters that are expected from the process.

Process revision

 Revision of processes is used to evaluate their stability and effectiveness. It should be done on a regular basis by a group of workers who are competent to assess whether the described process matches reality. They should also evaluate its benefit for the company, either in terms of the goals achievability or the added value for its customer. Last but not least, the individual or team should consider whether there is a potential to improve the process (if so, how).

Processes measuring

 Each process should be measurable and have its own indicators (), which help to check whether the process is running according to the client’s requirements (process customer). KPIs can be, for example, speed of processing, repeatability, reject rate, frequency of process repetition per time unit etc.

 A sample process can be a well-known activity of cleaning your apartment or house. You can think of it as a checklist summarizing which activities and in what order need to be done:

  1. Clean up
  2. Put dishes into dishwasher
  3. Wipe off the dust
  4. Do the vacuuming
  5. Mop the floor
  6. Water the flowers 

 This is an example of the weekly cleaning process we agreed with the cleaning lady. Once a month we can then add the process of washing windows, cleaning the oven or changing the bed linen.

 We would also like to mention order invoicing which is a typical example of the company process. It starts once the order is completed, and often after the delivery of goods and services to the customer. The following are the parts of the process: summarizing costs (multiple departments can be involved), calculating the discount, approving the issued invoice by the responsible employee and sending to the customer. The process can end by crediting money to the company account.

 It helps when the process is described including individual responsibilities, so that the invoicing clerk does not forget to send a request for costs calculation to one of the departments or send an approved invoice to the customer.

 If several such processes are running at the same time (could be dozens to hundreds of parallel billings, each at a different stage of the process), it is necessary to have a “helping hand” (tool), which can detect how many of these processes are running, and if some process is not just stuck waiting for the next step.

Process as an investment

Although employees can often misunderstand why to map or build processes in a company, no doubt their contribution can be crucial for the operation and stability of the company. Typically, German companies are aware of this fact, which tend to have a very strict and conservative approach to processes. In 2008, when the global financial crisis burst out at its fullest, a good many companies had to close down. On the contrary, some companies continued with their businesses and are still active today. Besides other things, it was also the process management that helped them to successfully survive. When there were not many orders and business was slow, such companies focused on the revision and, most importantly, on the optimization of processes. As soon as the economy restarted, they came out of this situation stronger and better prepared.

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