Standard Operating Procedures

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Standard operating procedures SOP
Business Plan SOP A comprehensive, easy to use 188 page manual containing scores of worksheets and notes. The contents follow thebusiness plan outline, and have been rigorously tested during years of training throughout the world. The Ibis business plan manual is delivered in Word format, so that users can complete the worksheets and transfer them into the body of their own business plan.
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What is an SOP? A standard operating procedure is a company wide formalised structure to handle specific operational activities. They are, in the opinion of Ibis, an essential supporting element in the creation of good planning and control within the growing company. What are the potential advantages of using SOP's? They standardise the approach of individuals within the company to specific procedures, improving the quality and speed of decision making in key areas – especially incontingency planning and survival and recovery; They are essential for the enterprise attempting to achieve the maximum of flexibility and intrapreneurialism through decentralisation and the creation of strategic business units as they provide a set of common approaches to problem solving and analysis; They provide a valuable structure for inter company discussion and development, with a key role in creating a knowledge management base within the organisation, particularly important in cost cutting, competitive analysis and exit planning; They act to disseminate best practice within the organisation and can be updated as the conditions and legislation require creating a knowledge rich enterprise; They serve to speed the integration of an individual into the organisation during the induction training phase by making available a library of company wide best practice and company operating procedures; They improve transparency within the organisation by enabling all employees to see how specific problems are handled in a standard and clear fashion which helps in the creation of shared values; They provide a clear audit trail in cases of dispute or external investigation where it

can be shown that correct procedures were followed and records maintained; They provide a check list which is action and implementation orientated and identify precisely the individual responsible for their completion; They can provide a rapid way to improve the span of control within organisations – removing much of the mundane procedures from management and empowering employees to carry out a whole range of standard activities; They can provide highly cost effective maintenance training when incorporated into an effective Intranet and checking system. It can also be linked to additional material held within the company and on-line training courses; They provide the first stage in the creation of knowledge centres within an enterprise, by serving as a means of collecting information which can then be used to develop expert systems, involving software and eventually artificial intelligence; When key concepts are incorporated into standard operating procedures, such as those listed in the business health check they will lead to greater understanding of overall business operations, important in succession planning. They can provide valuable assistance to change management policies, by embedding new best practice. What are the potential disadvantages of using SOP's? Standard operating procedures can become more and more restrictive and more and more detailed, reducing individual liberty and individual approaches to work; Standard operating procedures can become very time consuming involving the completion of excessive paperwork; Standard operating procedures can be extended to cover even the most minor aspects of work, creating a completely controlled environment – ideal for a bureaucratic management style; Unless updated with new regulatory requirements and best practice they will rapidly fall into disrepute; Unless they are used by all they will also be seen as part of a system put in place to mollify employees rather than as a key universal management tool. What are the characteristics of a good SOP? The SOP can be shown to have benefits to the employee in improving and simplifying job performance; That it provides a inclusive framework for decision making rather than an exclusive structure; The SOP is easily and rapidly accessible to all employees;

The role and importance of the SOP can be easily and clearly demonstrated in the accompanying explanation which details what needs to be done, why it needs to be done and what is considered best practice; The SOP leads to specific and ideally simple action which can be rapidly documented; The SOP is part of a company wide training and development programme, and knowledge of the SOP is regularly tested within the organisation through the use of Intranet systems; SOP's are always used by senior management in the relevant decision making areas, and are communicated in that form to other staff. What SOP's are essential? Ibis now has around 65 standard operating procedures developed for different companies. Within this range of material there are core items that all organisations should consider: SOP's concerned with corporate governance, planning, record keeping, and monitoring; Of particular value are the SOP associated with the development of the business plan outline which is part of Ibis training; The knowledge center SOP; The key performance indicator SOP; The decision making SOP; The forecasting SOP; The new product development SOP; The market development (international development) SOP; The competitive analysis SOP; The corporate governance development SOP; The survival and recovery SOP; The consolidation SOP which includes cost cutting methodology;

SOP's concerned with buying and selling including outsourcing;

The purchasing policy SOP; The marketing mix SOP; The outsourcing SOP; Customer investment review, customer service and customer relationship management SOP; The sales management SOP; SOP's concerned with safety and security; Health and safety SOP; Total preventative maintenance (TPM) SOP; Security SOP SOP's concerned with personnel policy and employee development; Recruitment appraisal SOP; Disciplinary code and grievance procedure SOP; Industrial relations SOP; Recruitment SOP; Appraisal SOP SOP's concerned with the standardisation of key operational activities; Project management SOP; Management information system SOP; Risk management and contingency planning SOP; Investment appraisal SOP; Labour productivity SOP; Total quality management (TQM) SOP When should the company consider the introduction of SOP's?

Some SOP's are in the view of Ibis, central to effective decision making at whatever stage of company development. Both academic research and personal experience suggest that they become more and more important as the organisation grows in size and more and more operational decisions need to be delegated. In practical terms this suggests that an organisation with more than 30 employees should be considering the formalisation of operating procedures through the introduction and adherence to a complete set of standard operating procedures that are relevant to the demands of the environment in which it operates. Focusing on key SOP development As the business plan develops, four components focus the enterprise on which SOP's should be introduced: The legal review – which identifies where the enterprise is failing to meet best practice – for example in corporate governance or in managing the disciplinary code and grievance procedures; Successes failures and lessons learnt – which identifies what the enterprise needs to improve in operational performance; The planning effectiveness review which regularly critically reviews operational performance against targets; Areas of significant difference between key performance indicators and benchmark levels which become identified during the creation of knowledge centers. This approach ensures that the enterprise only introduces those SOP's that are essential in the short term without creating overload. Further SOP's can then be introduced as all stakeholders see the advantages. The SOP index – assessing what has been done against what should be done A useful monitoring tool which should be incorporated in the administration knowledge center is the continuous review of what SOP's exist and what should be introduced. This provides a continuous measure of SOP development within the enterprise and allocates responsibility for their creation and maintenance. This SOP index is one of the 80 or so backbone monitoring elements which are a standard component of knowledge center, SBU and business plan development.

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