Process capital

Process capital is the value to an enterprise which is derived from the techniques, procedures, and programs that implement and enhance the delivery of goods and services. Process capital is one of the three components of structural capital, itself a component of intellectual capital. Process capital can be seen as the value of processes to any entity, whether for profit or not-for profit, but is most commonly used in reference to for-profit entities. Process capital is the value to an enterprise which is derived from the techniques, procedures, and programs that implement and enhance the delivery of goods and services. Process capital is one of the three components of structural capital, itself a component of intellectual capital. Process capital can be seen as the value of processes to any entity, whether for profit or not-for profit, but is most commonly used in reference to for-profit entities. A process comprises a 'series or network of value-added activities, performed by their relevant roles or collaborators, to purposefully achieve the common business goal. Process capital can be created and enhanced by using business process mapping, business process modeling and business process management Organisations invest in process capital in order to build a company’s unique infrastructure for achieving operational and strategic goals. Given the dynamics of industry and technology, the development of process capital evolves and interacts with environmental changes. Organisations have invested in information technology (IT) and organisational change programs to build process capital for achieving business excellence through customer satisfaction. The vast investments include: IT infrastructure implementation, quality-improvement projects, process-redesign projects, and various process integration projects. Although process capital plays an important role in organising resources, processing information, interacting with stakeholders, and delivering organisational values, few studies have discussed its specific content, and it is rare to focus attention on the level of its management. Instead, process capital has usually been hidden in the measurement of IT investment or organisational intellectual capital as an intangible element of organisational assets. Failure to treat process capital as a separate and unique management issue is widespread among both businesses and researchers because most of the systems and processes within the organisations are interdependent. Therefore, a systematic approach to measuring process capital is necessary in order to manage process potential to its full extent. Capital is something owned which provides ongoing services. In the national accounts, or to firms, capital is made up of durable investment goods, normally summed in units of money. Process capital, in practice, embraces the practical knowledge of operations, techniques, and employee programs in the effort to extend and enhance the efficiency of manufacturing or the delivery of products and services for long-term value. Failure to treat process capital as a separate and unique management issue is widespread among both businesses and researchers because most of the systems and processes within the organisations are interdependent. Therefore, a systematic approach to measuring process capital is necessary in order to manage process potential to its full extent. Process capital is essential for strategy development and implementation. Business processes are large with technology, location and other factors combining to generate limitless possibilities. Throughout the process of developing and appropriating technology-enabled processes, collective brainpower is formalised, captured, and leveraged to produce an asset of higher value and affect organisational performance in all aspects. Organisational performance can include the operational, managerial, and strategic impacts of different business efforts on the management of business processes. However, because organisational performance is influenced by numerous factors, the benefits from process capital can be expected to take up to several years to filter through the various levels of business performance. For example, a process integration technology may take months to develop and transform into real processes and to generate increased productivity. In addition, after processes emerge into business operation, greater managerial and strategic performance may appear later. Therefore, it is important to use proper measures to reflect process value for both the short and long term. The input method is measured by the resources invested in process capital for business operations. In economic terms, this is expected to predict the future value of the processes. The two measurement indicators for this method are investment in information technology and administrative expanses. Firm size and industry type are the two controlled variables that are used in all three methods.