Process capital
Process capital is the value to an enterprise which is derived from the techniques, procedures, and programs that implement and enhance the delivery of goods and services. Process capital is one of the three components of structural capital, itself a component of intellectual capital. Process capital can be seen as the value of processes to any entity, whether for profit or not-for-profit, but is most commonly used in reference to for-profit entities.
A process comprises a "series or network of value-added activities, performed by their relevant roles or collaborators, to purposefully achieve the common business goal.
Process capital can be created and enhanced by using business process mapping, business process modeling and business process management
Roots
Process capital in organisations
Organisations invest in process capital in order to build a company’s unique infrastructure for achieving operational and strategic goals. Given the dynamics of industry and technology, the development of process capital evolves and interacts with environmental changes. Organisations have invested in information technology and organisational change programs to build process capital for achieving business excellence through customer satisfaction. The vast investments include: IT infrastructure implementation, quality-improvement projects, process-redesign projects, and various process integration projects. Although process capital plays an important role in organising resources, processing information, interacting with stakeholders, and delivering organisational values, few studies have discussed its specific content, and it is rare to focus attention on the level of its management. Instead, process capital has usually been hidden in the measurement of IT investment or organisational intellectual capital as an intangible element of organisational assets. Failure to treat process capital as a separate and unique management issue is widespread among both businesses and researchers because most of the systems and processes within the organisations are interdependent. Therefore, a systematic approach to measuring process capital is necessary to manage process potential to its full extent.Definition
is something owned which provides ongoing services. In the national accounts, or to firms, capital is made up of durable investment goods, normally summed in units of money. Process capital, in practice, embraces the practical knowledge of operations, techniques, and employee programs in the effort to extend and enhance the efficiency of manufacturing or the delivery of products and services for long-term value.Failure to treat process capital as a separate and unique management issue is widespread among both businesses and researchers because most of the systems and processes within the organisations are interdependent. Therefore, a systematic approach to measuring process capital is necessary to manage process potential to its full extent.
Strategy development
Process capital is essential for strategy development and implementation. Business processes are large with technology, location and other factors combining to generate limitless possibilities. Throughout the process of developing and appropriating technology-enabled processes, collective brainpower is formalised, captured, and leveraged to produce an asset of higher value and affect organisational performance in all aspects.Organisational performance
Organisational performance can include the operational, managerial, and strategic impacts of different business efforts on the management of business processes. However, because organisational performance is influenced by numerous factors, the benefits from process capital can be expected to take up to several years to filter through the various levels of business performance. For example, a process integration technology may take months to develop and transform into real processes and to generate increased productivity. In addition, after processes emerge into business operation, greater managerial and strategic performance may appear later. Therefore, it is important to use proper measures to reflect process value for both the short and long term.Measuring process capital
Input method
The input method is measured by the resources invested in process capital for business operations. In economic terms, this is expected to predict the future value of the processes. The two measurement indicators for this method are investment in information technology and administrative expanses. Firm size and industry type are the two controlled variables that are used in all three methods.Output method
The output method is measured by the total effort of managing the technology and operations which achieve business effectiveness. The process indicators measure the actual value of labor productivity, such as profit per employee, to determine the contribution to the firm's overall productivity. This method is based on reviewing past performances to predict future results.Management capability
Management capability is the capability of constructing and coordinating resources to integrate and develop processes to respond to changing business conditions. The method measures the value of the process capital at the time of the measurement as a percentage change of the productivity compared to the previous year.Green capital
Studies show that process capital has a positive influence on competitive advantages of firms.Competitive advantage
Companies engaging in environmental management and green innovation actively can not only minimise production waste and increase productivity, but also charge relatively high prices for green products, improve corporate images, and thereby obtain corporate competitive advantages under the trends of popular environmentalism consciousness of consumers and severe international regulations of environmental protection. Therefore, the stocks of organisational capabilities, organisational commitments, knowledge management systems, reward systems, information technology systems, databases, managerial institution, operation processes, managerial philosophies, organisational culture, company images, patents, copy rights, and trademarks, etc. about environmental protection or green innovation within a company can help companies obtain competitive advantages.Measuring green capital
The measurement of green structural capital comprises the following nine items:whether the management system of environmental protection in the firm is superior to that of its major competitors;
whether innovations about environmental protection in the firm are more than those of its major competitors;
whether the profits earned from environmental protection activities of the firm is Effect of Green Intellectual Capital on Competitive Advantages of Firms 277 more than that of its major competitors;
whether the ratio of investments in R&D expenditures about environmental protection in the firm to its sales is more than that of its major competitors;
whether the ratio of employees about environmental management to the total employees in the firm is more than that of its major competitors;
whether investments in environmental protection facilities in the firm are more than those of its major competitors;
whether the competence in the development of green products in the firm is better than that of its major competitors;
whether the overall operation processes about environmental protection in the firm work smoothly;
'' whether the knowledge management system about environmental management in the firm is favorable for the accumulation and sharing of the knowledge of environmental management.''
Process capital and nursing
Process capital is one of the three components of structural capital. Nursing structural capital is knowledge converted into information structures that nurses can use to assist with their clinical decision-making and care planning. Nursing structural capital in the form of practice guidelines, care maps or protocols is believed to provide relevant information to nurses for improving the quality of care they deliver. Care maps, practice guidelines and protocols have been found to contribute to improved patient outcomes and reduce the rate of adverse events.Transforming human capital to structural capital
Distinguishing between information elements
The intellectual capital model distinguishes between three distinct elements: Human Capital, Structural Capital, and Relational Capital. Leadership represents ideas of Human Capital, the intellectual value of the employees in a firm. All intellectual capital first originates as Human Capital. Innovation and process capital represents components of structural capital, elements that show the legal and process value of the company. Innovation capital includes embodied knowledge sets like patents and copyrights. Process capital tends to consist of more intangible elements of a tacit knowledge set which includes process technologies. In other words, structural capital consists of elements with which the firm's members interact to create more knowledge or get the work done. Relational capital is moderated by cultural capital and both of these elements represent the knowledge needed to provide ongoing value-added relations with shareholders.(Figure 1 source.