Implementing and developing ISO management systems
Who is interested in the party?
In this blog we are going to explore clause 4.2 of the ISO 9001 standard which has some crossover with the previous requirement for context (clause 4.1). External interested parties may be, but equally may not be, highlighted as part of the context analysis.
So, what are and who are interested parties?
At this stage it might be useful to define what an interested party might be. An interested party is:
- A person or organisation that can affect, be affected by, or perceive itself to be affected by a decision or activity.
The “interested parties” clause then suggests that:
- Interested parties relevant to the quality system need to be identified.
- The requirements of these interested parties need to be determined.
- The organisation needs to monitor and review information about the interested parties and their requirements.
But why are they important?
As ISO 9001 “only” gives us the “requirements”, to find out “why” they are important we need to take a peek at ISO 9004. 9004 is essentially a set of guidance notes that are interestingly titled “guidance to achieve sustained success”. Here the emphasis is on building a company with a long term, sustainable future that makes an ongoing and positive contribution to society. No company operates in splendid isolation, so here we begin to define why interested parties are important; ISO 9004 says:
The organisation should determine which interested parties:
- a) are a risk to its sustained success if their relevant needs and expectations are not met
- b) can provide opportunities to enhance its sustained success.
Once the relevant interested parties are determined, the organisation should:
— identify their relevant needs and expectations, determining the ones that should be addressed;
— establish the necessary processes to fulfil the needs and expectations of the interested parties.
The 9004 standard goes on to suggest that the organisation should consider how to establish and develop ongoing relationships with interested parties in order to develop a common understanding of objectives, targets and values which might then in turn drive improved performance.
The relative importance of different interested parties:
The importance of different interested parties will be different for different companies and sectors. In some highly regulated sectors external interested parties, like the regulators, may well be more important than the owners and shareholders of the business. However, for the most part we are interested in owner managers so we would suggest that you guys (and gals) are the most important interested party. From there we would work through other interested parties in an order where the final interested party was the one we are least interested in.
So, let’s take a look at different interested parties and their needs and expectations… Starting with the shareholders!
| Owners, shareholders & directors | Needs & expectations |
|---|---|
| Shareholders are interested in how well the company and the management system performs and how well the objectives, goals and targets of the organisation are set and met. | The shareholders would expect to see: • A return on their investment, • Compliance with any legal or other obligations. |
| Note: that in some instances directors may not necessarily be shareholders or owners | |
| Staff | |
| Staff will want to work in an environment that creates products and services that meet the needs of customers. Additionally, staff are the only source of creativity and innovation. | Staff would expect; Professional development, prompt payment, good health and safety, a work/ life balance, employment security, employment contracts, job security and a good working environment |
| Unhappy workers will leave potentially creating skills and experience shortages. | |
| Customers | |
| The company needs to understand the needs, expectations, and requirements of customers. | The customer expects the company to: |
| · Deliver professional and reliable products and services, of the right quality, on time and to the correct specification | |
| · Provide value for money | |
| · Good communications and possibly a fast response | |
| Suppliers | |
| Suppliers want to be able to provide you with products and services over the longer term, so they are certainly interested in your ongoing survival. | Suppliers expect the company to: |
| · Make prompt payment for the service that they have provided | |
| · Develop a good long term working relationship. | |
| Sub contractors | |
| Subcontractors are a special type of supplier and would include contractors working at your premises and potentially those providing services for you in your name. | Provide any necessary information for them to effectively execute the work assigned to them. This might include; instructions, drawings, specifications and a where relevant robust health and safety arrangements |
| Competitors | |
| Competitors, usually, want to grow and expand and in doing so take chunks of your market share. | The competitors expect to take business away from your company. Consequently, you should understand this and have good business practices in place, so that that you are not adversely impacted by their activities. |
| Worthy competitors also help drive sector wide change and innovation | |
| Banks, credit agencies and finance companies | |
| Relationships with banks credit agencies and finance companies could significantly impact your cash flow, profits and ability to trade. | The bank / financial institutions expect the company to be able to honour any financial commitments that the company has, in line with applicable contractual and compliance requirements. |
| Insurers | |
| Insurers are a special type of supplier covering a wide range of issues, for example: | The insurers expect the company to: |
| Public liability | · Have effective risk management and mitigation in place in order to reduce the potential for claims |
| Professional indemnity | · Pay premiums promptly |
| Vehicle | |
| Buildings | |
| Contents | |
| · Product liability | |
| Landlords | |
| The decisions of landlords may affect an organisation in a variety of ways; They may sell or renovate the building, they may increase rents, if they use a managing agent they may change them, any of which may significantly impact your business. | Landlords expect to company to: |
| · Pay rent on time | |
| · Maintain the property / premises in a suitable condition in line with any applicable compliance requirements. | |
| National and local government | |
| National and local government provide the legislative framework within which the organisation has to operate | The National and Local Government expects the company to: |
| · Comply with the applicable legislation and any bye laws | |
| · Pay applicable taxes and conduct business accordingly | |
| Regulators | |
| The two main regulatory bodies in the UK, there are many others, are probably: | Any regulatory body will want the company to demonstrate that are complying with the relevant requirements. |
| · Health and Safety Executive (HSE) | |
| · Environment Agency (EA) | |
| Trade associations | |
| Trade associations provide their members with sectors specific guidance and information. Different sectors will have different trade associations, some might have more than one. Each will have their own membership requirements that members would have to comply with. | Trade associations will expect their members to work in accordance with any relevant membership guidelines, standards and current “best practice”. |
The above is just a sample of interested parties and others may include: Utility companies, trade unions, emergency services, charities, young people, NGO’s, advisors, accountants, the public and … oh, and last, but not least, certification bodies themselves!
Understanding the level of risk each interested party poses to an organisation, or indeed any opportunity they may be able to assist you with exploiting (in the nicest possible way) helps you in classify and address their needs.
Conclusion
Clearly interested parties covers a wide range of people and organisations any one of which can potentially affect your ability to consistently provide products and services that meet customer requirements and indeed any statutory and regulatory requirements.
Clause 4.2 of the ISO 9000 standard requires that any organisation review, in detail, the impacts that these interested parties to establish the risk of not complying or indeed any opportunity that can be developed in a way that promotes growth and development.
Related tools and ideas
Recommended references
Downloadable resources
- Various templates and checklists be found in each of the recommended references above
