SOP meaning – What does SOP mean in business?
SOP or standard operating procedure is written, detailed, step-by-step instructions compiled by an organization to help workers carry out complex routine operations.
SOP acronym means standard operating procedure. As you probably know that SOPs are nothing but some documented processes that are primarily used to deliver consistent quality every time. If you are a product owner or process owner, then it’s important to use SOPs so that your products and services provide quality and consistent value to its customers. When a company is in a growing phase, then the company owner mostly takes all important decisions. But, when the company has already reached its capacity, then the company owner can’t possibly take all the required decisions properly. That’s why the company should prepare documented SOPs so that the company can meticulously establish a proper succession plan and train its employee base accordingly.
Standard operating procedures are important to maintain the efficiency and safety for every department of a company/organization, such as strategic management, human resources, and payroll management, production and operations, employee training, sales and customer service, legal, financial, and information technology, etc.
Additionally note, SOPs should never be documented poorly and they should not be vaguely worded. Rather, the step-by-step instructions of SOPs need to be brief, crisp clear, and easy to understand. Additionally, standard operating procedures should be also simple to follow as well.
The SOP should be the key basis for every employee that’s working in an organization. Plus, standard operating procedures should be also used to training all new employees. On top of that, these instructions need to be updated on a frequent basis so that they are in line with the current needs of a company.
Reveal three key aspects of SOP
Standard operating procedures can possibly increase the value of any company (irrespective of its size and type).SOP follows a process-driven approach instead of a founder driven approach for its target customers.SOPs deliver consistent quality value to its customers.
What do you actually need SOPs or standard operating procedures?
i) SOPs save both money and time: If a company doesn’t follow a streamlined or standard operating procedure, then it will be too difficult to accomplish a specific task. For example, if the same task is getting performed by employees of an organization in many different ways, then it will surely take more time to complete. Thus, it will certainly ensure a time-consuming process. That’s why it’s important to follow SOPs so that the employees can accomplish their tasks in lesser time and money.
ii) SOPs improve communication and process flow: It has found in a recent survey that SOPs can excellently improve communication and process flows of a company and its organizations. Consider a situation, when an organization hires an employee. In that case, the employee must have the right idea about the processes and standards to be followed. That’s why the employees should follow SOPs as defined by the company for improved communications and expedited process flows.
iii) SOPs provide consistency: As already described before, the prime feature of SOPs is that they deliver consistent quality value to its target buyers or customers. Now, when a standard operating procedure is already in place, then the applicable business processes will automatically be followed in a correct and accurate way.
iv) SOPs ensure a safe and efficient work environment: As you probably know that it’s important to maintain a safe and efficient work environment in every organization. Now, when it comes to maintaining a safe and efficient work environment, it’s utmost important to follow the SOPs precisely. Otherwise, if the company doesn’t follow a standardized process, then it will be too chaotic. The assigned job responsibilities of the organization will not be fulfilled correctly. As a result, it will impact the work environment. In turn, the company won’t be able to deliver the right value to its customers in terms of its products and services and this situation can significantly hamper the company’s reputation.
So, being a business owner or company owner, are you planning to create your own standard operating procedure? If yes, then please follow the below sections to learn more about it.
i) Create a detailed list of business processes: First of all, it’s needed to find out and create a detailed list of business processes. This list can be reviewed by the managers; the managers can remove the redundancies and add any new points (if needed). Note, this list will act as the starting point when it comes to creating an SOP.
ii) Plan the right process: Once you have created the list, it’s time to plan for the right process. For example, whether the process will be written in the form of a workflow diagram or a step-by-step guide — this thing needs to be planned beforehand.
iii) Communicate with your employees: In the above steps, you have learned to create a detailed list of business processes and plan the process. Now, it’s time to speak with your employees as they need to understand and follow the process carefully.
iv) Write and review the process: Document the SOP instructions in a simple, clear, and detailed way so that it’s easy to follow by all. Also, you must review it at once.
v) Maintain the process: In order to make the SOP useful and relevant, it should be maintained properly. Additionally, you may need to update it from time-to-time basis so that it meets the current company needs and expectations.
In our trading industry, a lot of prop companies and trading corporate companies have SOP and all those procedures help that traders, analysts, managers work better in the ordered systems.