Essential of Management System for Businesses
By SNS Cambodia
This article we begin with definition of the Management System, we like to highlight the benefits of the Management System for businesses and raise those critical issues from our experience that many firms in Cambodia are facing today and future challenges. Then quoted some key points for the business owners and leaders to be considered for the development and improvement initiative for the Management System of their firms, we believe this is the keys and foundation for them to be successful.
A management system is a set of policies, processes and procedures used by an organization to ensure that it can fulfill the tasks required to achieve its objectives.
These objectives cover many aspects of the organization’s operations (including financial success, safe operation, product quality, client relationships, legislative and regulatory conformance and worker management). For instance, an environmental management system enables organizations to improve their environmental performance and an occupational health and safety management system (OHSMS) enables an organization to control its occupational health, safety and risks, etc.
[From Wikipedia, the free encyclopedia]
Why do we need a management system?
Because, there are a lot of benefits from an effective management system to an organization include: More efficient use of resources and improved financial performance. Improved risk management and protection of people and the environment and many other functional areas of businesses. Below is some example of the management systems and how it’s helpful for an organization:
Without documentation, “great systems” are only rough ideas about the way you do things in your business. And all your tasks, functions, processes and procedures – the way that you and your staff habitually do everything are nothing more than good intentions. With the Documenting Systems you could save time, keep you on track, and allow you to delegate to others when necessary explains your tasks, functions, processes and procedures. So that the staffs at all level can be performed duties in more effective ways and also being more productive.
Quality Management System (QMS) is a set of policies, processes and procedures required for planning and execution (production/development/service) in the core business area of an organization (i.e., areas that can impact the organization’s ability to meet customer requirements).
HR Management System (HRMS) or human resources information system (HRIS) or human capital management (HCM) is a form of human resources (HR) software that combines a number of systems and processes to ensure the easy management of human resources, business processes, and data.
Human resource management is about building the people of the organization. It is about ensuring employee engagement, conducting fair company-wide practices, and maintaining the overall health of the organization.
Human resources software is used by businesses to combine a number of necessary HR functions, such as storing employee data, managing payroll, recruitment, benefits administration, time and attendance, employee performance management, and tracking competency and training records.
Management information systems improve your decision-making, because they provide information that is accurate, timely, relevant and complete. Companies that use management information systems ensure that all managers work from the same set of data and make their decisions based on identical information.
Supply Chain Management System is the management of the flow of goods and services and includes all processes that transform raw materials into final products. It involves the active streamlining of a business’s supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
Management System – issues & challenges for Cambodian firms
From our experience in Cambodia business context, we have observed and learn from various firms that there were various fundamental issues in their business functions as Cambodia is in the process of economics growth country, the development of many industries sectors were very fast in the last decade, as human resources, technologies & other resources are not matched with ongoing needs yet. Among strategic issues, the Management System is the big challenges for them to overcomes. We wish to highlight some points of view from difference corners of businesses:
Usually, they began business with traditional ways or practical experience shared from person to another, and from one to another generation. It seems that they have no standard no proper Management System in place; and among them, not many business owners paid enough attention on the system & process yet. Therefore, not many firms continue growth to date and many other were closed due to reasons.
there is a believe they can handle business by themselves without the system and process (most of things storage in their brand), luckily they were success by chance or past success experience while opportunities still much for businesses, competition are not strong and modern system & process were not much available in Cambodia. Among other thing they believed their intellectual properties (skill sets) could be suffered from copied or stolen by other etc.
What is going to happen with these firms today as the world is now are in COVI19 Pandemic Crisis, their survival became a big challenge & long terms success is also in doubt!
required for the firms with high standard of management system to adopt themselves with Digital transformation & other modern technology and make it use in more effective to benefits their operation & functioning better; but unfortunately it’s does not available for those firms without proper system & process.
How these firms are going to survive in the new era of modern technology & new competitive environment?
Among other thing, the government use to introduce of new rules, the law enforcement become tightening & regulatory law establishment are emerging to adopt with the new business environment, political, social & economics of the country, regional & the globe.
For those firms without proper management system, their legal & compliance became a big challenges or at high risk.
These could cause them with major negative consequences, survival abilities are in the question mark, as they are inabilities to adopt to the change or develop themselves by getting the right system & process in place on time. Event modern business firms, many of them are also difficult with Digital Transformation process due to many reasons.
In these case, the business leaders and owners to consider strategical approaches to survive their business and prepare themselves for new normal (acting pro-actively) after COVID19 is gone.
Consequences due to lack-off proper management system:
You may agree with us, below facts are real, we have learned from the past experience – when the firm has no proper management system, it would:
- Has too much problems to be tackle with, less time to focus on value added activities
- Loss of money & time
- Not be competitive at all.
- Be a high risk
- Have limit access to the new market & investors…
- Fall in dump spiral process or business become string down, then…
- Be in the worst case, it is failure of the business & closed down.
Questions to be considered:
- What do you think, your firm has the management system in place yet? How your system work, well or not? Why?
- Did you conduct an internal review on your current management system? If yes, any problems or improvement needs?
- If, you didn’t have Management System, would you think to stay at traditional way of doing business? Or willing to change?
- What is going to happen if you keep the same way of doing thing (traditional way)? You are failure to get the right Management System for yours firm?
- In the future, how would you consider to establish and improve your Management System? Here are options to consider:
- Would you do on your own? Will you have enough time to do it, and would it be successful?
- You may need help from expert? It may also expensive; but success level is higher.
- It may create dependency on an expert; but if you got collaborative team with the right experts you will have your own system – we believe on this [No technologies could help you, if you didn’t have fundamental management system of your firm first, technology is second step as it’s a tools to make your life easy; but skill sets / ideas are within yourself]
21st century is digital era and also era of continuous change in business models and management systems emerges: the search for competitive advantage (one over the other) becomes relentless, strenuous and resources depleting. Cooperation networks have to merge into larger entities, reducing competition and expanding collaboration. The search for collaborative advantage (for both jointly) will become the new mode of economic behavior.
Finally, you may find the place for your firm, where it’s fit in the Evolution Stages of Management Systems:
- Early Stage – Basic scheme covered product, process, external networks (after WW-II)
- Extended Process – it covered Extended process and Customer Intervention Point
- Distributed process – it covered Distributed process and Outsourcing
- Recycled Process – it covered Recycled Process and Global Sourcing
- REVOLUTIONERY SPIRAL – it covered final products à Partitioned Process à Integrated Process à Extended Process à Distributed Process à Recycled Process (Today)
The higher stage you achieved, your firm become stronger and it’s growing bigger from time to time.
As you know:
- ANY BUSINESS REQUIRED SYSTEM!
- EVERYTHING WE DO NEED SYSTEM & PROCESS!
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