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Standard operating Procedures: Documentation for Better Controls CA Saket Kanodia Baroda CPE Study Circle Meeting June 13, 2017
Standard operating Procedures: Documentation for Better Controls
CA Saket Kanodia
Baroda CPE Study Circle Meeting
June 13, 2017
Agenda
• What is an SOP
• Key components of SOP
• What to expect from SOP
• Opportunities for the professionals in practice wrt. SOPs
What is an SOP
A Standard Operating Procedure (SOP) is a robust user manual thatcombines multiple pieces of policy, guidance, and instruction into oneeasy-to-use, role-based document. The development and use of SOPsare an integral part of a successful quality system as it providesindividuals with the information to perform a job properly, andfacilitates consistency in the quality and integrity of a activity /product or end result.
Documentation of SOPs
The purpose of a Standard Operating Procedure (SOP) is to create a standardmethod for performing a set of tasks within an organization. SOPs may becreated for a variety of complex processes, job roles, organizationaldepartments, or procedures. In many instances an organization will requiremore than one SOP; often, multiple SOPs will serve as complementaryproducts that cover different materials, but serve the needs of a commoncommunity.
When more than one SOP is developed for an organization, it is importantthat all SOPs have a standard aesthetic, demonstrating a consistent methodof SOP development. To confirm that SOPs are developed in this manner, it issuggested that the Project Team use the concept of a “DevelopmentPlaybook” to standardize both the look and feel of the SOPs, and thecommunications and messaging surrounding them.
Where are SOPs needed
• Business cycles
• What does the client need
• Where are the processes morevulnerable and risks notmitigated
• Are their any industry specificrequirements fordocumentation
• Phased approach is alwaysrecommended
Su
pp
ort
fun
cti
on
s
MaintenanceFinance & Accounts /
Management Information Systems
Human Resources& Administration
Project management including Capex
Co
re F
un
cti
on
s
Procurement
Annual Operating Plan
Manufacturing
Legal, Statutory Compliance Framework
RevenueManagement
Inventory Management
Logistics
Understanding Core vis-à-vis Support Functions
Key Components of an SOP
Process narratives with
templates
Scope and applicability
Responsibility Accountability
Support Consult Inform Matrix (RASCI)
Process activity tree
Process Flow Chart
Key Performance
Indicators (KPI)
Organization chart
Supplier –Input – Process
– Output –Customer (SIPOC)
Internal Control Framework
Standard operating process document with
Delegation of Authority
1
2
3 6
5
4
8
7
9
Key Components of an SOP: Scope and Applicability• The SOP Introduction should
contain a general introduction and overview of the SOP. Below is an outline of key sections that are recommended for inclusion.
• What is this SOP and Why is it Important? – Include a brief overview of the SOP content, users, and what function this SOP serves for the client space
• Key Terms Table
Sample
Key Components of an SOP: Organization Chart
• Introduce the key roles, users – relevant for that process
• Focus on hierarchy
• Suggested to make it roll specific rather than person specific
Sample
Key Components of an SOP: Process activity tree• Understand the entire
process in a bird eye view
• Process may contain several sub processes
• Introduce the applicable program or system(s) whose function the SOP will detail
• Reader of the SOP should be able to ‘zoom in’ and ‘zoom out’ from this interpretation
Sample
Key Components of an SOP: Process narratives• Lucid narration of the
activity that has to be done
• Person responsible must be clear
• Process notes detail out the activities carried out in each of the process elements.
Sample
Key Components of an SOP: SIPOC• SIPOC tabulates the following:
• Supplier of inputs
• Inputs to the process
• Process
• Output of the process
• Customer of the output
Sample
Key Components of an SOP: Process Flow Chart• The process map details the
sub processes highlighting functions/roles involved. It also demonstrates the flow of activities in the process. The phases of the process are also defined in the process map as separators
• Various departments – which are working together can be depicted by way of swim lanes or horizontal separators
Sample
Key Components of an SOP: RASCI• RASCI table maps all activities
defined in the process to all roles which participate in the respective activities in various capacity
• Who is:
Responsible
Accountable
Support
Consult
Inform
• Concept of Delegation of Duty
Sample
Key Components of an SOP: Internal Control Framework• Identifying the key risks and
controls
• Can be a vital documentation for ICFR
Sample
Key Components of an SOP: Key Performance Indicators
• Important to make the efficiency measurable
• KPIs, if documented work best for employee appraisal also thereby increasing overall efficiency
Sample
What to expect from SOPs
• Recognized and proven
• One size does not fit all: SOPs need to be specific to each organization andneed to be discussed and tailor-made minutely to ensure success
• Have an incubation / gestation period
• Understanding | Documentation | Deployment | Review and changes
Are 4 totally different and yet very critical stages
What not to expect
• Quick wins
• Bottom line / Top line improvements
Opportunities for members in practice
• Abundant opportunities for all members in practice
• Can help many growing clients
• Need to use it in conjunction with the requirements of ICFR / IFC
Open House Discussion and Questions
