Relevance of Standard Operating Procedures in an organization

A standard operating procedure (SOPs) is a set of step-by-step guidelines gathered by an organization to support its employees to carry out regular operations. SOPs Objective is to achieve consistency of productivity, value output, and performance while reducing failure to comply with industry miscommunication and regulations within the organization. Appropriately designed SOPs define:

• The objective of the process or activities
• Scope of the process or activities
• Accountability and responsibilities of the employees performing the activities,
• Instructions to perform the task
• Documentations that need to be completed while performing the tasks.

Standard operating procedures play a key role in today’s dynamic and complex set of activities that an organization is required to perform. It sets out clear guidance and support for the employees that what the organization is expecting from them and how it would be executed. It defines accountabilities and roles of each employee involved in the activity or process. Overall, the key points for the organization to have standard operating procedures are as appended below:

• Ensure business continuity: Whenever an employee is not present or absent at the organization due to some reason, the work should not suffer. With the support of the SOPs, any other employee can take the charge and complete the pending prime or important task at the desired timelines. By referring to SOPs, it will be easier for the newly joined employee to understand the processes and activities that are required to be performed. Hence, we can say that having SOPs in an organization ensures operational continuity.
• Efficiency and productivity:Defining the objective and scope of the tasks/activities to be performed helps employees to concentrate on the desired outcome which brings efficiency and productivity to the work. Productivity from employees works positively towards the welfare of the organization.
• Reduction in errors:Setting out clear instructions to perform the task or activity helps in the reduction of errors in the department. In case of ambiguity to perform the task, an employee can refer to the standard operating procedure for easy understanding and as a result, there are a minimal number of possibilities that errors occur in performing the task.
• Healthy and Safe Environment:Setting out the roles and responsibilities are the key feature of the standard operating procedures. Designating marked roles and responsibility or departments. Each employee better understands their area of work and responsibilities, hence contributing to a healthy and safe environment within the organization.

Auditing and Inspection:Having defined standard operating procedures helps in understanding the processes and activities of an organization. It is easier for auditor or statutory bodies to carry out their auditing and inspections of the operations of organizations.

• Value addition to business: Standard operating procedures help the possible investor to get insights into the activities and processes that an organization is performing. Hence, it helps in value addition for an organization to have SOPs.

This content is meant for information only and should not be considered as advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.

Posted by:

CA Aman Aggarwal

AKGVG & Associates