In face of increasing competition, solution providers are gradually getting
ISO-certified to demonstrate their differentiation to customers. Getting an ISO
certification helps the SI organization acquire credibility as well as establish
the customer's confidence in its processes. It also helps it to project itself
as a customer-oriented company while ensuring improved efficiency from within.
In an age of intensifying competition, where solution providers could be
found pitching for same customer accounts, differentiation beyond price and
technology becomes more imminent than ever before. Various SI organizations try
and showcase this differentiation in terms of reach, service and support
infrastructure, consultancy skills and so on.
However, with customer organizations giving a lot more importance to
processes these days, in view of themselves becoming globally competitive, they
expect a similar business behavior from their technology solution providers.
Realizing this need well, the latter is increasingly getting aware on various
kind of process-related certifications.
And so unsurprisingly, a large bunch of mid and small-size SI organization
today can be found possessing ISO certifications. Those who don't, are slowly
putting their processes in order to get certified in the near future.
While an ISO certification alone doesn't ensure more business or increased
profitability, it sure acts as a lubricant to smoothen the entire mechanism of
business operations. Solution providers have successfully demonstrated increased
efficiency in their businesses as a result of the exercises undertaken to get
ISO certified and also because of regular evaluations of the same.
WHY GO FOR IT?
An ISO certified company has an edge over its competitors as it can project
itself as a customer-oriented business house. When the prospective client
notices that its supplier has got well-documented processes with a stamp of
approval from a certifying body, their perception of the company improves.
This is all the more so, if the customer is not based in the place as the
company and is unable to monitor its business processes first-hand. And since
certification is done by an external body, the customer accepts this as an
impartial judgment.
The good news about ISO 9001:2000 is that it lays down what requirements your
quality system must meet, but does not dictate how they should be met in your
organization. This gives the partner great scope and flexibility for its
implementation in different business sectors and business cultures.
Also, several overseas customers purchase only from suppliers and vendors
that are also ISO-qualified. Says Atul Khatri of Kaytek Computer Services.
"Having a certification has become crucial in these times of global
competition and competency." Kaytek is also working on getting its internal
processes in shape, before going for this certification soon.
Adds Ajay Jalan of Trade Technology, "Getting the certification shows
that the company is more process-oriented. This reaffirms the customer's faith
in the caliber of the company and therefore helps business grow." Another
benefit of getting certified is that that selling your home-grown products
become easier.
PROCESSES INVOLVED
Once a company has decided to get itself ISO certified, it has to create
internal awareness about this decision. This is to ensure that every employee
knows why it is necessary and how to conform to the established standards.
After evangelizing about the decision to go for certification, the company
should ideally appoint an independent consultant to guide them through the
procedures of certification. This is not mandatory, but is preferable, because
the company can concentrate on carrying on its business activities while, the
certification leg-work is done by a qualified person.
The next step is to take a close look at all the processes in the different
aspect for the business operations. For example, if a
sales proposal is sent, is there a well-defined procedure for formulating the
same. Is the quotation checked for spelling errors, product code, proper format
of mentioning the company's name and logo, and even the salutation to the
recipient?
Once all these processes are identified, they should be documented. The
company then has to identify which areas do not have any defined processes and
bring these into existence. A seamless framework, also called the quality
manual, has to be created and then applied to every component of the business
operations. These are later fine-tuned, based on the feedback from the
employees, internal and external customers.
When the entire system is working faultlessly, internal auditing has to be
undertaken to ensure that there are no loopholes anywhere. The focus of these
audits have to be especially in areas, which could be the company's weak
spots. "Certification calls for total, and at times brutal honesty, from
the company. They should be forthright in admitting areas where they need to
strengthen themselves," remarks Adidas Jacob of Oasis Consultants, an
independent certification consultant.
The last leg of the process involves inviting ISO-affiliated bodies to do a
complete audit of the company. KPMG, AQSR and BVQI are some companies that do
these audits. Once this external auditor is satisfied about the company's
processes being in place, it awards them the certification.
COST OF GETTING CERTIFIED
The costing for getting certified can be broken down into consultant fees,
training programs, auditing costs and registration charges. Preparing for ISO
9001 certification can cost a small- to mid-size company around Rs 2 lakh.
Here is a deeper insight into the cost factor. If you are a small company
with 50 employees and a single location, a freelance consultant who will
hand-hold you through the initial stages of internal audit, will charge close to
Rs 1 lakh. Explains Adidas, "The costing is arrived at depending on the
size of the company and the processes already in place. If a company already has
some systems which are optimizing its customer efficiency, then the charges are
appreciably lesser."
The company has to appoint one dedicated employee who will assist the auditor
with the identification of the various functions and operations of the business.
This manpower has to be factored in as well to the overall costing.
For the above mentioned company profile, an external auditors will again
charge close to Rs 1 lakh for quality assessment. And finally, the certificate
subscription will cost the company up to Rs 50,000.
This certification is valid for a period of three years. During this period,
surveillance audits will be conducted by the external auditor, the cost of which
is usually included in the overall assessment fee. After three years, the
company can upgrade itself to the latest level of certification, for the
applicable cost.
OTHER QUALITY PROCESSES
There are several quality processes that a company can imbibe to improve its
efficiency and also cut costs. However, they differ from ISO because these are
not certified.
Six-Sigma is one such quality standard which reduces the defects in the
company's processes. It is defined as finding 3.4 errors in every 1 million
operations. This process was initiated by Motorola and GE and is currently
followed by AV Birla and Wipro.
In the Six-Sigma method, the partner informs the customer about the
qualifying factors required to go forth with a proposed installation. This helps
in directly saving costs. This can also become another revenue stream for
solution providers as they can act as consultants to their customers who want to
go for this process. The only cost for six-Sigma is training the company's
manpower regularly. There are no other major capital costs involved.
The other process is a Total Quality Management (TQM). Here quality in every
stream of the business is identified and then measured. A set of parameters are
then determined, and all employees of the company have to adhere to it.
Management guru David Kall explores this subject in his paper on TQM, saying
that if an organization had a set of tools for continuous learning, they were
able to manage change much more easily and with less disruption. And when they
really attacked and fixed the root causes of their problems, customer
satisfaction rose and costs declined.
Finally, they had a process for measuring the cost of non-quality which
allowed them to solve their most costly problems first and to hold supervision
accountable for achieving continuous improvement until customer satisfaction was
achieved.
So, the writing is on the wall. Customers prefer doing business with
certified partners. They equate certification with credibility and confidence.
So, don't sit on the fence. Go ahead and get certified.
Multiplying The Business Advantage
Mumbai-based Omnitech Infosolutions decided to go for ISO certification in
1999. The decision was not influenced by external factors, instead the promoters
of the company adopted this strategy to drive their business efficiency. The
company also wanted to have processes that were people-independent and which
offered constant uniform delivery to customers.
It invested Rs 2 lakh during its initial ISO 9001:2000 certification. It got
itself re-certified in December 2000 to the ISO 9001: 2000 level. The company
also has surveillance audits every quarter, by a certifying body, which costs
around Rs 25,000.
Calculating the returns on this investment is difficult, as the benefits are
non-tangible. But says Avinash Pitale, Director, Omnitech Infosolutions,
"It offers us a unique value proposition as the business efficiencies have
gone up, thereby reducing costs."
From a business perspective, the certification also helped the company bag
crucial overseas orders. It even helps it in having an advantage while bidding
for tender business, since the service deliverables are easily mapped out.
From an employer's view point, employee retention hass improved as team
members have the documentation about their job roles and career growth
opportunities.
Also, new recruits can be trained faster, since the processes are all
well-defined. And the company can also attract better quality manpower, who
would rather work with a process-oriented organization.
ISO CERTIFICATIONS: A PRIMER
The International Organization for Standardization (ISO) is an international
body based in Switzerland with headquarters in Geneva. It consists of a
federation of national standard bodies comprising approximately about 140
members, one in each country.
The organization has set three quality management standards to assure vendor
quality in 1987. ISO 9001 was a standard for certifying those companies that did
design and development, product manufacturing, installation, final inspection
and testing, as well as supplying and maintaining software. ISO 9002 covers
companies doing production and installation and ISO 9003 affects companies that
handle final inspection and testing.
Any company can go for the ISO certification, irrespective of its size or
nature of business. All that is required is that it should have a
well-documented setup for its business processes. This documentation has to be
all-encompassing of the various facets of the company's operations, including
purchase, sales, services, human resource management, marketing, etc.