In its relatively short existence, ISO 9000 has become a presence in more than 226,000 organizations worldwide. In the United States alone, there are nearly 19,000 registered companies. Originally, ISO 9000 was intended for manufacturing companies engaged in global trade. For this reason, the majority of registrations have come from the manufacturing industries, such as electronics, fabricated metals, and rubber and plastic products. During the last few years, however, ISO 9000 has steadily gained momentum in the U.S. service industry.
The most recent ISO 9000 Registered Company Directory North America reports that one in every 10 North American registrations comes from a nonmanufacturing company. In the United States, more than 2,000 certificates have been issued to the service sector. The fact that more service companies are adopting ISO 9000 should come as no surprise--service is the fastest growing segment of the U.S. economy. As of 1997, service organizations represented 80 percent of all U.S. companies. ISO 9000 analysts have been tracking the developments in the service industry and believe this growth trend will continue in industries such as food, transportation, insurance, health care, education, finance, employment, hospitality, and consulting and training.
The AICPA pursues ISO 9000
The American Institute of Certified Public Accountants' successful ISO 9000 implementation demonstrates how beneficial the ISO 9000 process can be for service organizations. The AICPA is the national professional association for certified public accountants. Founded in 1887, it is now one of the largest membership organizations in the United States, with some 340,000 members. The AICPA offers many services to its members, including advocacy, certification and licensing, communications, recruiting and education, and standards and performance. Its members include CPAs in firms of all sizes, managers in business and industry, educators and government leaders.
AICPA's members didn't pressure the Institute to become ISO 9000-registered; in fact, most members had probably never heard of ISO 9000. Nevertheless, in June 1998, the AICPA became the first professional membership organization to earn ISO 9001 certification in the United States. What led to its decision to pursue registration? What benefits did the association hope to reap? How did its implementation project turn out? The feedback from those most familiar with the project--the AICPA, its consultant and its registrar--offers valuable insight for other service organizations interested in pursuing ISO 9000 registration.
The decision to become ISO 9000-registered can be summed up by a statement made by an AICPA executive management team member. "The ISO 9000 process will help the Institute make decisions that will positively impact the way we run our business, as well as the bottom line," explains Chuck Peck, AICPA senior vice president of product, marketing and organizational development. "Holding the coveted ISO 9001 registration will also differentiate the AICPA both as a top-flight professional association and as a world-class publishing organization in an increasingly complex marketplace."
The implementation process
The AICPA enlisted the aid of Alamo Learning Systems--a nationally recognized training and consulting firm--and utilized its Fast TrackŪ program, an implementation system that helps organizations of all sizes prepare for registration. "AICPA's management recognized that ISO 9000 was the best known independent stamp of approval, indicating that an organization is committed to providing quality products and services," notes Chuck Mitman, Alamo's vice president. "AICPA's goal was to demonstrate to its members that the Institute is committed to providing them with the highest level of quality service of any national professional association. In order to do this, they wanted to establish a quality consciousness in every AICPA employee."
After selecting a consultant, the AICPA chose a registrar. The executive management team picked Kemper Registrar Services, which has since been acquired by BVQI. "The ISO 9000 process will provide the AICPA a consistent approach to managing quality and a valuable tool in their continuous improvement efforts," says Al Egreczky, division business development director for BVQI. "The certification will give them a competitive edge in the marketplace, more efficient production scheduling flow, fewer customer complaints, continuous process improvement, clarification of job responsibilities and consistent training standards."
In some ways, the AICPA followed the same implementation process that any manufacturing organization would; in other ways, the AICPA faced challenges that made the process unique. Working with Alamo staff, executive management at the AICPA:
Committed to pursuing ISO 9001 registration.
Constructed an implementation plan, and identified internal and external resources (i.e., consultant, registrar).
Identified existing or additional documentation required for the ISO 9001 system.
Developed and implemented documentation that supports the quality management system.
Trained AICPA personnel to understand and take ownership of their role in ISO 9001.
Conducted internal audits of processes and took corrective actions as needed.
Contracted for and underwent preassessment and registration assessment by the registrar.
With upper management committed to the process, the next step of gaining acceptance for ISO 9000 from middle management proved more complicated. The AICPA's organization chart is rather flat and wide, meaning that while there are relatively few management levels, there are a significant number of managers responsible for each of the services provided. Acceptance of ISO 9000 took time and continuous communication, as the AICPA had its share of skeptics. If people had heard of ISO 9000, a common response was, "I thought ISO 9000 was only for manufacturing companies." In the initial attempts to develop documented procedures, some said, "You can't put what I do into a procedure."
These managers needed to be convinced that ISO 9001 applies equally well to a service organization as to a manufacturer. For example, the AICPA delivers services to members just as manufacturers deliver products to their customers. Because quality is more subjective in the service industry, it's important to define and delineate quality standards and practices. Although they may be easier to construct in a manufacturing environment, ISO 9000 flowcharts and a quality system manual can be just as effectively used by those in the service sector. The AICPA hoped that ISO 9000 would help its employees gain a broader view of the entire business proc-ess rather than simply focusing on their individual responsibilities.
Next, the AICPA structured its quality system in a manner consistent with its organization and the services it provides, both of which are more complex than many manufacturing operations of comparable size. A manufacturing company with 500 employees may produce a variety of products, but typically focuses on one or two primary products. It, therefore, can gear its quality system toward managing all aspects of those limited product lines.
The AICPA, however, provides such a large variety of services that they all require separate processes to manage them effectively. These services range from distributing CPA support material, offering training programs, coordinating conferences, providing technical accounting and tax information, maintaining an accounting library, and developing and administering the Uniform CPA Examination. Each of these services had to be incorporated into the implementation plan and required developing separate procedure documentation in order to be ISO 9001-compliant.
After constructing an implementation plan to account for the large number of services it provides, the AICPA next worked on documentation development. The AICPA began by developing documents utilizing facilitated meetings. These meetings included the people responsible for each process and representatives from internal suppliers and internal customers. The facilitated meetings resulted in consistent, user-friendly documents and provided ISO 9000 training. The facilitated sessions helped to translate ISO 9000 requirements into terms relevant to the AICPA.
"If you asked someone, 'Who is responsible for contract review?' the answer was, 'Go talk to the legal department' because the lawyers generally handle 'contracts' in service organizations," says Mike Reeve, Alamo's eastern regional director and primary consultant working with the AICPA. "When contract review was translated into 'the process by which AICPA enters into agreements to provide services to its members,' it became easier for everyone to understand the principles of contract review as they apply to the AICPA."
In manufacturing organizations, business processes can often be categorized according to a single ISO 9000 element. For example, a production process would typically be categorized according to element 4.9 for process control. In service organizations such as the AICPA, business processes often have multiple ISO 9001 elements that apply to a single process within the organization.
The association's CPA exam provides a good example of the challenge of interpreting ISO 9000 in a service organization. The AICPA is responsible for the design and delivery of the CPA exam, which is administered to CPA candidates around the United States twice a year. The entire process is extensive, and each exam cycle--including preparation, production, delivery and grading--spans more than six months. Figure 1 provides an overview of the major phases in the CPA examination process and the primary ISO 9001 requirements that apply to each phase.
"A registrar has to be flexible when interpreting the standard and be willing to listen to the client's interpretation of what certain elements in the standard mean to them," explains Egreczky. "The outputs of a service organization may be a job opportunity, an interpretation, a first-class seat, a nonsmoking room facing the pool or a high-interest mutual fund. We're not just talking about widgets anymore."
After the task of developing documentation to match its practices was completed, the AICPA took the typical next steps to implement its documented processes. Employees were trained in ISO 9000 and on the procedures that specifically applied to them. Questions like, "Why is the AICPA getting ISO 9001 registered?" still persisted, but by the time the documents were developed, AICPA was better able to answer them.
Management conveyed the message that documented processes and training would help standardize practices to achieve consistent results. The AICPA also demonstrated to all levels of the organization how its documented processes helped achieve the overall mission and vision established throughout the Institute.
The AICPA used Alamo's internal auditor training and subsequent internal audits to convey these explanations to all staff members. The Institute was no different from most organizations implementing ISO 9000 in that the initial round of internal audits took more time than expected. In the end, the extra time taken achieved greater-than-expected results in building confidence in the ISO 9001 implementation process.
"Achieving ISO 9001 registration is a sign of the times for the CPA profession, as well as for the AICPA," remarks Barry C. Melancon, AICPA's president & CEO. "It demonstrates to our members, potential new CPAs, the business community and the public that quality and service are two sides of the same professional coin. As the CPA profession begins to deliver new, value-added services to clients and employers, it's fitting that its professional association is the first to bring the ISO 9001 designation to the expanding world of service delivery."
"It's like knowledge management for quality processes," adds Peck. "The ISO 9001 process has opened our eyes to the depth and breadth of quality already in place at the Institute, and made us put it into words that we now live by."
The ISO 9000 process has helped the AICPA uncover deficiencies in its service delivery mechanism as well as functions duplication, says Peck. Through the ISO 9000 documentation process, and in conjunction with the existing Process Improvement Program, the AICPA has plugged the gaps and reduced the number of steps and handoffs involved in delivering services to members. Also, ISO 9000 documentation provides individual employees and functional areas with guidelines to manage and conduct their work in accordance with their individual, team and organizational goals. It supplies them with the raw materials to craft a quality system that works.
ISO 9000's documentation, coupled with PIP's process mapping, contributed significantly to the Institute's 4-percent improvement in gross margins last year. That's the largest improvement in the Institute's history. Clearly, the ISO 9000 process has helped the AICPA operate more productively and efficiently.
AICPA has been so convinced of ISO 9001's value that it has promoted ISO 9000 services as an emerging business opportunity for its CPA members. CPAs have a solid, 100-year reputation for integrity and reliability with clients, employers and prospects. Their existing auditing skills make CPAs perfect candidates for this type of consulting. In the last two years, the AICPA and Alamo Learning Systems have offered a four-day training program designed to train CPAs in ISO 9000 requirements. The program also introduces them to providing ISO 9000 consulting as another value-added service to their clients.
The worldwide shift to a service-based economy is creating unprecedented industry pressures. The efficiencies that the ISO 9001 registration process has brought the AICPA have freed up needed resources to meet the challenges of a new financial services marketplace and a fiercely competitive economy. ISO 9000 can provide a qualitative method of ensuring standards of practice for other professions in the service industry as well.
About the author
Norman Ho is marketing manager for Alamo Learning Systems, an international training and consulting firm specializing in ISO 9000-based quality systems and custom-tailored solutions for problem solving, decision making, project management and process improvement. To learn more about Alamo, telephone (800) 829-8081, e-mail firstname.lastname@example.org or visit www.alamols.com .
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