Home › Business Management›What is Process Analysis?
Definition:A process analysis is a systematic review of all steps and procedures followed to perform a given activity. It is a description of the way a particular task is done within an organization.
What Does Process Analysis Mean?
Contents
- What Does Process Analysis Mean?
- Example
Process analysis is an ongoing improvement process where organizations analyze the way they do things in order to find more efficient methods to perform a particular task. This analysis is based on the three elements of any activity: input, process and output. Process analysis deals with the way the input is transformed into the desired output. One goal for this analysis is to reduce the amount of resources, including time, employed to get the output required.
A process analyst will observe and document the way a particular task is done to describe thoroughly all stages and people involved within it and then he will normally design a flow chart that illustrate the way the input flows through the process. Another goal for process analysis is to standardize activities in a way that anyone with a basic knowledge of the company and the activity being performed can contribute their part of the process effectively. It also helps organizations to train people more easily.
Example
A company wants to analyze its purchasing process and in order to do so they hired a business consultant. The consultant started a process analysis and as part of that activity he interviewed the two people in charge of performing all purchases in the company. After getting their first hand information from he analyzed the process and identified the following stages.
First a requirement is received from any department of the company. Second, the requirement is entered into a database of pending requirements to be fulfilled and suppliers are contacted to get budgets for the goods or services required.
Finally, when a supplier is found, a purchase order is issued and, after the order is delivered, the payment is issued to the supplier. The consultant analyzed this process and made some suggestions to the company to improve it. This analysis helped the company reduce its time to fulfill purchase requirements.
Accounting & CPA Exam Expert
Shaun Conrad is a Certified Public Accountant and CPA exam expert with a passion for teaching. After almost a decade of experience in public accounting, he created MyAccountingCourse.com to help people learn accounting & finance, pass the CPA exam, and start their career.
