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If you are the “average” real estate professional, you have reached the age in which you are having more physicals than you had when you were younger. It is the same for maturing companies. What is an Operational Audit?
An operational audit is a full analysis or “physical”
of all of the systems in the company, both automated and non-automated including
every process or task that drives, impacts and or influences your business.
Examples are: how the front desk is run; how agents are recruited and trained;
back office processing; agent motivation; personnel administration and more. A system, as the term is used here, is an objective based
process in which each time a series of steps, events, and interactions occur
sequentially, the same or similar results are likely to be generated.
When defined systems are able to be put in place, mistakes will be
reduced and the ability to meet objectives greatly enhanced.
Additionally, companies operating through systems are usually more
profitable and less labor intensive. The audit will identify tasks and processes that are no
longer used and/or are unnecessary to achieve the results desired as well as
those that are essential or may expedite results. Data is defined within the audit in terms of inter-activity
between tasks. Tasks are defined to
avoid duplication and determine where data could be better used to achieve
goals. The utilization and
organization of physical are evaluated as well as the methods in which the
personnel actually perform their jobs compared to their job descriptions,
training and approaches to work. When
this information is coordinated with the available tools, systems to reach
objectives begin taking on a new definition. Timing
Timing is a critical factor. The ability to plan roll-outs for changes, put foundation
items in place (policies, training, accountability issues and tools); and
integrate the upgrading processes without creating harmful chaos in the business
environment must be considered. In
most cases it is suggested that the audit be performed in the quarter ahead of
any proposed major change. When
change is a part of the business process it is usually viewed as an upgrade. Who Should Perform the Audit
Objectivity, perspective, business sense and information
resources are the most important characteristics required, no matter who does
the audit. Rarely will the
skill set be found inside the company due to objectivity, personal relationships
and history. Often a consultant is
hired to bring perspective and experience gained working with a variety of
companies and situations. Business
sense may be readily available in the company but, is usually limited in
perspective, objectivity and frequently influenced by personal agendas. It is important to understand that the auditor will need
the ability to move freely though the entire company. They must look at the company in many ways, as a customer, as
an agent, as an owner, as an employee, as a vendor and as a part of the business
community. This unique view
from multiple perspectives will expedite the entire process but again requires
experience in many facets of business. Objectivity is critical and difficult, the auditor must
come in with an open mind and the industry specific knowledge to lend critical
objectivity. “Business sense”
cannot be under-rated as the auditor must be able to see the flow of objectives
from processes to results. The
auditor should be expected to communicate the information back as well as
recommend any potential changes seen as necessary.
Visionary skills are required to take the situation from current status
through changes and conditions that will impact the business. Finally, information resources must be abundantly available
as only a portion of the work is done in the interviewing process.
It is not unusual that in the course of the interviews and conversations,
some items will be discovered and discussed, however, that is usually just the
initial part of the process. The research, writing, diagramming, and
documentation work is completed by the auditor after the on-site work. The auditor is usually not an expert in all areas, however,
their expertise should be strong in operational function and flow with specific
knowledge to the industry and business. The
auditor must have good communication and people skills as there will be a wide
variety of feelings and reactions attached to the process. The functions and attributes of an audit bear a lot of similarity to a physical conducted by a doctor and like a physical may greatly impact the quality of “life” the company will enjoy. |
