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Knowing
the process
www.arthurandersen.com

2000 Arthur Andersen

All rights reserved.
00-00000

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Universal Process
Classification Scheme
The Universal Process Classification
Scheme provides a framework of
13 core business processes and more
than 140 sub-processes that help your
company achieve peak performance.
Produce & deliver
products & services

Operating processes

1
Understand
markets &
customers

Develop vision
& strategy

3
Design
products &
services

4
Market
& sell

7
6
Produce & deliver
for serviceoriented
organizations

Invoice &
service
customers

Management processes

Develop & manage human resources

Manage information resources & technology

10

Manage financial & physical resources

11

Execute environmental, health & safety

management program

12

Manage external relationships

13

Manage improvement & change

Best practices describe the steps leading

companies take to achieve peak performance.
Looking to those businesses that perform a process
best for insights enables the kind of breakthrough
improvement that allows you to leap ahead of the
competition, instead of merely keeping pace. By
focusing on top performers with proven results, the
Global Best Practices knowledge base offers the
richest source of insight.
Understanding those insights requires a different point of
view what we call a process view. To facilitate this idea
exchange, Arthur Andersen and the founding members of
the International Benchmarking Clearinghouse came
together to create the Universal Process Classification
Scheme. It defines key processes that every business
performs, and serves as the framework for navigating the
content and tools in our knowledge base.

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1.0 Understand markets & customers

1.1 Determine customer needs & wants
Capture & assess customer feedback
Predict customer purchasing behavior
1.2 Measure customer satisfaction
Monitor satisfaction with products & services
Monitor satisfaction with problem resolution
Monitor satisfaction with communication
1.3 Monitor changes in market or customer expectations
Determine deficiency of products & services
Identify innovations that meet customer wants & needs
Monitor competitive offerings

2.0 Develop vision & strategy

2.1 Monitor the external environment
Analyze & understand competition
Identify economic trends
Identify political & regulatory issues
Assess technology innovations
Identify social & cultural changes
2.2 Define the business concept & strategy
Select relevant markets
Develop long-term vision
Formulate business unit strategy
2.3 Design the organizational structure
Manage international operations
Outsource noncritical functions
Franchise products & services
Create shared services centers
Manage strategic alliances
Manage mergers & acquisitions
2.4 Develop & set organizational goals

3.0 Design products & services

3.1 Develop new product or service concept & plans
Translate customer needs & wants into products or services
Plan & deploy cost & quality targets
Target product life cycle & development timing
Assess & integrate technology into products or services
3.2 Design, build, & evaluate prototype products or services
Develop product or service specifications
Conduct concurrent engineering
Implement value engineering
Implement design for environment program
3.3 Refine existing products or services
Develop product or service enhancements
Eliminate quality & reliability problems
Eliminate outdated products or services
3.4 Test effectiveness of new or revised products or services
3.5 Prepare for production
3.6 Manage the product or service development process
Implement project management
3.7 Manage intellectual property
Apply for & manage patents
Secure copyright & trademark protection
Protect trade secrets

4.0 Market & sell

4.1 Develop sales & marketing strategies
Identify market segments
Select channels of distribution
Develop pricing strategy
Develop advertising & promotion strategies
Develop sales forecast
Establish presence in emerging markets

4.2 Sell products & services

Sell to customers through a field sales force
Sell to customers through retail operations
Sell to customers through the Internet
Sell to customers through direct marketing
Manage wholesalers, retailers, & distributors
4.3 Manage customer orders

5.0 Produce & deliver products & services

5.1 Plan for & acquire necessary resources
Select & manage suppliers
Purchase capital goods
Purchase materials & supplies
Manage service contracts
5.2 Convert resources or inputs into products
Develop production process
Schedule production
Move materials & resources
Make & package product
5.3 Transport & deliver products
Arrange product shipment
Deliver & install products for customers
Identify & meet customer service requirements
5.4 Manage production & delivery process
Warehouse or store products
Manage inventories
Manage delivery process
Assure product quality
Schedule & perform maintenance
Monitor environmental, health, & safety performance

6.0 Produce & deliver for serviceoriented organizations

6.1 Plan for & acquire necessary resources
Select & manage suppliers
Purchase materials & supplies
Manage service contracts
6.2 Develop human resources skills
Define skill requirements
Identify & implement training
Monitor & manage skill development
6.3 Deliver service to the customer
Confirm specific service requirements for customers
Identify & schedule resources to meet service requirements
6.4 Ensure quality of service

7.0 Invoice & service customers

7.1 Bill the customer
Develop, deliver, & maintain customer billing
Respond to billing inquiries
7.2 Provide customer service
Provide post-sales service
Handle warranties & claims
7.3 Respond to customer inquiries
Respond to information requests
Manage customer complaints

8.0 Develop & manage human resources

8.1 Create & manage human resource strategy
8.2 Identify performance competencies
Develop leadership competencies
Expand finance competencies
8.3 Manage deployment of personnel
Plan & forecast workforce requirements
Recruit, select, & hire employees

Develop succession & career plans

Manage international assignments
Create & deploy teams
8.4 Develop & train employees
8.5 Motivate & retain employees
Manage compensation
Manage employee performance, reward, & recognition
Ensure employee involvement
Manage & administer benefits
Develop work-life programs
Diversify workforce
8.6 Manage labor-management relationships
8.7 Manage changes in employment status

9.0 Manage information resources

& technology
9.1 Manage information resources
Manage records & documents
Leverage data & information
Leverage organizational knowledge
9.2 Manage information technology
Define & manage organization & strategy
Acquire, develop, deploy, & support technology solutions
Support users
Manage technical environment
Manage security
Ensure continuity of systems

10.0 Manage financial & physical resources

10.1 Manage financial resources
Develop budgets
Manage capital planning
Design capital structure
Manage cash flow
Manage financial risk
10.2 Process finance & accounting transactions
Process accounts payable
Process payroll
Process accounts receivable, credit, & collections
Close the books
Manage travel expenses
Implement a transfer pricing policy
10.3 Report information
Provide external financial information
Provide internal financial information
10.4 Conduct internal audits
10.5 Manage the tax function
Ensure national tax compliance
Ensure local tax compliance
Ensure international tax compliance
Manage tax controversies
10.6 Manage physical resources
Manage fleet assets
Manage fixed assets
Manage facilities
Manage physical risk
10.7 Manage integrity risk
10.8 Manage business continuity planning
10.9 Manage risk in emerging markets

11.0 Execute environmental, health, &

safety management program (EHS)
11.1 Formulate EHS management strategy
Provide corporate EHS program leadership
Define EHS strategy
Define EHS policy
Include environmental concerns in sales & marketing strategies
11.2 Formalize environmental management system (EMS)
Develop specific objectives & goals based on the environmental
policy statement
Define environmental management system
Assign EMS accountabilities & responsibilities
Perform EMS gap analysis
Conduct EMS training
Manage EMS information
11.3 Manage environmental program
Identify & prioritize environmental aspects of processes
& products
Identify & manage environmental & business conflicts
Define & manage environmental options in the supply chain
Include environmental policies in product programs
11.4 Manage EHS costs & benefits
Define EHS activities
Quantify EHS costs & benefits
Identify future EHS opportunities & risks
Identify costs of life cycle alternatives
Integrate environmental costs & benefits into
business systems
11.5 Manage EHS remediation projects
11.6 Manage environmental insurance recovery program
11.7 Measure & report EHS performance

12.0 Manage external relationships

12.1 Communicate with shareholders
12.2 Manage government relations
12.3 Build lender relationships
12.4 Develop public relations program
12.5 Manage relations with board of directors
12.6 Develop community relations
12.7 Manage ethical issues

13.0 Manage improvement & change

13.1 Measure organizational performance
Create measurement systems
Measure product & service quality
Measure costs
Measure productivity
13.2 Conduct quality assessments
Conduct quality assessments based on external criteria
Conduct quality assessments based on internal criteria
13.3 Benchmark performance
Develop benchmarking capabilities
Conduct process benchmarking
Conduct competitive benchmarking
13.4 Apply best practices
Implement continuous process improvement
Reengineer business processes & systems
13.5 Implement total quality management (TQM)
Create commitment for TQM
Design & implement TQM systems
Manage TQM life cycle