What is manage by exception and why should you use it?

Jesse Meijers

The old management systems

If you have been in the business long enough, you will remember management systems with multiple big screens full of data. Data was represented in tables, fancy maps, diagrams with on-screen alarms, and automatic messages that were sent to the wrong people. Endless data analyzing the business operations and creating reports which only generated more data.

Storage had become cheap and for a while, all data that could possibly be collected and generated would be presented. “Here’s your business, nothing is stopping you to use all this information to your advantage. You choose yourself; we just give you the data and the tools”. It all looked very impressive. But what to do with all that information?

The screens with data looked impressive but ultimately all you got was a fancy spreadsheet with endless lines with items you might have had, or might not have had, any use for. The difference between a database vs spreadsheet is that a database is organized data that will provide you with information. So, you had to turn your spreadsheet of data into a database of information.

That required a lot of specialized people who could understand the management software, interpret the data and generate meaningful and actionable information. These people often did understand the software, but not your business, so there could easily be a mismatch between what they thought was interesting and what you thought was important. Storing data was cheap, yes, doing something with it became terribly expensive, and there was too little to show for in business efficiency to justify the investment. Too much data, and too little actionable information.

How to manage your data so it becomes meaningful information

We don’t need to know about processes that don’t require human interference. When you send an e-mail to someone else, many processes and actions take place between you typing your messages on your laptop and the receiver reading it on his or her screen. Who cares what all these steps are! All you want to be sure of is that the e-mail will reach the right person.

The same principle applies to your internal business processes. Why would you want to know about data showing you something you don’t need to act upon? You want to manage the right things; you don’t need to manage everything. In other words, you manage by exception.

What is manage by exception?

An item in a process that doesn’t require any immediate action is data we don’t need to worry about and should not be presented to the user. And as we are getting better and better at automating processes, that means most items don’t need any human intervention, and we can eliminate a lot of data we need to look at. This immediately saves a lot of fancy screens with stuff you don’t need.

We now also know that what is presented to the user is interesting and actionable data, we don’t have to look for that through meaningless noise. Everything you see is something useful. Information you need to know, and which requires some type of action. This also reduces the chance of errors. With too much information it is easy to miss something important, which adds unnecessary stress and pressure to the responsible people. A system you can rely upon gives you peace of mind.

Problems can be quickly identified and solved before damage is done. Your business becomes more reliable, and your workforce will have the confidence important things don’t get missed or forgotten.

Both the volume of information is reduced, and the quality of information is increased. This is much more efficient. A single user can handle more data because all of it is meaningful and at the same time is presented with less noise because all the rest is filtered out. That is what we call Management by Exception (MBE).

Let’s look at an example. When you want to know what new customer requests have come in, it is useful to be presented with just these new customer requests. That might seem common sense, and it is, but too often you must filter through all customer requests first before you get this information. A request can be new, in progress, canceled or completed. Why should you have to look through all the completed requests when trying to find the new ones? Of course, we do store all that information somewhere in an archive, for bookkeeping, reporting and analysis when needed. In a different process you might in fact want to just look at the completed requests, in which case you shouldn’t have to browse through the ones that are not yet completed. But when you simply want to deal with new requests, you should only be presented with new requests by default, without having to select things first.

Even better is when certain requests always trigger the same action. These actions can be automated, in which case there is no need for human intervention, and therefore no need for a customer representative to look at it. This means you don’t even have to know about it and the item can be eliminated from the data you are shown. Store it somewhere where you can look it up when you do need it, not on your default screens.

These automated actions are called Straight Through Processes (STP) and the combination of STP and Management by Exception (MBE) is extremely powerful.

Combining STP and MBE

When you know what the start of a process should look like, and the end of that process, there is a good chance you can automate some of the steps you must take to get from the start to the end. Some human interaction might also be required. A physical action maybe, like actually baking the pizza which was ordered online. Or a decision by someone which is not easy to automate. STP takes care of everything you can automate, and MBE makes it easy and efficient for a user to take action when needed.

Graphic showing how to combine STP and MBE

For an online shop a new customer request is received, an automatic confirmation e-mail is sent, an order number is assigned, an existing client is attached, or a new client is created, and the order is sent to the warehouse. Now the warehouse employee gets a notification, finds the order, and collects the item the customer had ordered. He presses a button in the system, the address is printed and attached to the item, and here the automation kicks in again. Another e-mail to the customer, an entry in the database, several items in the financial system, and everything else that is part of the process. When the package is picked up by the courier another button is pushed, more automation. Once the item is delivered a last human interaction takes place which will trigger the further items necessary to complete the order. No human intervention is required here, and all data is stored somewhere in case there is a need to look at that another time.

It sounds logical and with most online shops a process looking somewhat like this will take place: STP and MBE in action. The more you apply this concept the more efficient you will be, and the more you will understand your own business.

Does this work for my growing start-up?

The above example assumes a large online shop with the means to have people designing the automations and processes to create an efficient business. If you are a small business owner you might think this is not applicable, something for the future and out of range for your small operations. However, even small businesses will often have many complex processes with unnecessary human actions and management systems nobody really understands. Every efficiency you build in your processes today will save you once you have grown in the future. Not only that, but by having a clear grasp of what is possible within your business processes you also get a better grasp of where exactly your growth opportunities are. When you realize a process that requires 2 people half a day could in fact be done by one person in an hour, you can take on different customers, orders, and opportunities.

It still might sound like quite an up-front investment with complications you find hard to predict and understand. This is where Triggre can help. Triggre is a no-code platform that makes it easy to identify and automate the processes that can be automated. And you don’t have to have a programming degree to use it, Triggre is user-friendly, easy to understand and accessible, and provides many templates and examples to get you started implementing STP and MBE for your business. What’s more, a team of experts is always available to help you out.

You can download our free whitepaper "The ultimate scaleup guide to automating business processes. A simple step-by-step agile approach to grow your revenue, not your workforce" to get a better understanding of how this works and how Triggre will help you with your business processes.

Grow your revenue, not your workforce

By using Straight Through Processes (STP) you reduce the number of human actions required in your processes, and by combining this with Management By Exception (MBE) you make sure that the people who are required can work more efficiently, thus also reducing the need for a large workforce. The added benefit is that your business processes become much clearer, which will give you insights into where bottlenecks are, or which processes can be further automated. You can use your existing workforce to help grow revenue, and you don’t have to grow your workforce for processing the increased operations.

The efficiency and reliability you have gained by implementing STP and MBE will in fact become one of your selling points and by itself, help increase your revenue. You can promise your customers a level of services that is scalable and which doesn’t have to keep you awake at night. Worrying about how to serve your new customers and exciting new business opportunities without increasing your workforce at a time when it is almost impossible to find good people, which you don’t really want to do in the first place. Growing your business becomes a lot easier, with the right focus on the right things, and with a clear knowledge and understanding of what happens at the backend without having to look at all the details and steps in your processes. And your existing workforce is happier too.

Happy workforce, happy customers

People want to add real value to their job, by helping you grow your business, creating better products and services and by having positive interactions with your customers. Spending too much time with admin work, and endlessly repeating tasks and processes is often de-motivating. “It comes with the job; no job is perfect” is what you hear. Eliminating repetitive work will help motivate your workforce. It will create the space for your people to bring a more valuable, creative, and innovative solution to your business, the very reason you have the business in the first place.

Because Triggre is so user-friendly it is fun to work with as well. Your team will quickly see the possibilities and find their own solutions, for your unique business model and challenges. For them, it will be motivating and rewarding not only to come up with the idea but to get the tools to implement it and see the results as well. Making work easier for your workforce and increasing your efficiency.

By using STP and MBE it is also easier to know what you are looking at and simplify things even more. The next step in automating your organization is to look at the exceptions you still have and automate these even more. And to be able to present real data in a meaningful way so the right business decisions can be made. The possibilities are endless. Triggre makes it possible.

Triggre is a robust no-code platform that helps entrepreneurs, start-ups, SMEs and large corporates alike in their automation journey. You can sign up for free and try out templates that are fully customizable and ready to use, based on real-world use cases. Or, if you prefer, start from scratch and build your unique software solution, completely adapted to your company's needs from zero. Moreover, you don't have to start this journey alone: you can make use of our learning resources to master the tool in no time or contact a certified Triggre expert to help you out.

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