What are the benefits of ISO 9001?


An ISO 9001 certified quality management system can provide a whole range of benefits.

I love hearing from clients about the benefits they achieved via doing ISO 9001. The things they say most are that their business runs better, everyone is clearer about what they do, processes are improved, they know they are managing things more effectively, they feel much more in control, they notice increases in customer feedback, employee satisfaction and positive feedback, and noticeable reductions in duplication, recurring problems, rework and other frustrations or time-wasters. 

Worth reading is this definitive joint statement from ISO (who create the Standards) and IAF (who oversee accreditation) on the Expected Outcomes from ISO 9001 If you're a SME (Small to medium-sized enterprise?) ISO has a nice little brochure with 10 SMEs describing the benefits they got from 9001.

See these case studies from ISO on the economic benefits.  They showed these three key benefits


Selection of Research Studies

1. A joint study in the Asian region looked at the economic benefits of 9001, its credibility and purchaser perceptions.  The study found that implementation of accredited certification to ISO 9001 has positive results for the certified organisations and their customers, and thus ultimately the economies.

Key findings

Reference:ISO 9001 - Its relevance and impact in Asian Developing Economies, a joint study by ISO, United Nations Industrial Development Organisation (Unido), IAF and NADC. Pub. 2012

2. A 2007 Australian study looked at why businesses implemented ISO 9001, their approaches and experiences, and particularly comparing the 2000 version with the earlier 1994 version it replaced to see if it really better (yes!).

Major findings:

* Reference: The Implementation of ISO 9000 in Australian Organisations, Australian Supply Chain Management Research Unit, Monash University, supported by JAS-ANZ. Dr D Prajogo & Professor Sohal. It was conducted by Monash University in collaboration with JAS-ANZ. Findings from 326 organisations, evenly spread between manufacturing and service; majority (87%) = small to medium- sized organisations. Available from JAS-ANZ. 

3. An earlier study (2003) found a significant and positive relationship between management's motives for adopting ISO 9000 certification and business performance. Organisations that pursued certification willingly and positively across a broad spread of objectives are more likely to report improved organisational performance. The individual element found to contribute most to business performance was Customer Focus.

* Reference: The Longitudinal Effects of the ISO 9000 Certification Process On Business Performance, 2003 Terziovski, Power and Sohal, Melbourne & Monash Universities. Findings only from manufacturing.

4. Positive effects of Certification - a US survey in 2006 got the following answers asking about whether they had gained internal benefits. Of 2500 surveyed, there were:

*Reference: Survey conducted by The Independent Association of Accredited Registrars (IAAR) - an association of accredited management system registrars operating in North America.

5. A UK Study survey wanted to find out if consumers know (or care) about ISO 9001. The UK has perhaps the most mature usage of the ISO 9000 series worldwide.

Findings:

*Reference: Do consumers really care about ISO 9001 certification?, J Tannock & Henry Brown, Nottingham University Business School, published in ISO Management Systems, May-June 2006 edition, Vol 6; by a professional market research organisation.

6.The Phoenix Police reported $11m in savings

Source: ISO video (previously published, but no longer available to public).

7. A detailed analysis of financial performance of ISO 9000-certified organizations over a 10-year period, found that companies who implemented a system certified to ISO 9000 gained a greater return on assets (ROA).  This study was conducted by a distinguished group of business school academics from The Anderson School at UCLA, R.H. Smith School of Business, University of Maryland and Universidad Carlos III, Spain. They found that "Firms that failed to seek certification experienced substantial deteriorations in ROA [Return on Assets], productivity and sales, while firms that did seek certification generally managed to avoid such declines".
Source: July-August 2002 issue of ISO Management Systems

8.  In a BSI survey of 227 US firms, one company reported a sales increase after certification of $6 m. Another reported a 75% improvement in customer satisfaction. (What would a 75% increase in customer satisfaction do for your business?)

Other findings from the survey:

Source: BSIGroup (global quality certifier).

9.  In a 1992 survey of companies who had held certification for several years:

Source: LRQA, a global certifier

What does this tell us?  

For a start, that there are very real benefits to be gained.  For around 20 years now I've worked with many organisations and the ISO 9001 Standard. The more I do that, the more respect I have for it, because I see how it helps organisations things improve if it's used intelligently.

Yes, it has its critics and no, nothing's perfect. But my experience of bad ISO 9001 systems is they are almost always due to failures in understanding of the Standard or failures in implementing it (how you do it).  The unanswered question for critics remains: What do you propose instead?  


BUT - does everyone get these benefits?


No. They don't.

You see, while the benefits of 9001 are very real, they are not automatic. As one study says (bolding added added):  

"...the motive for adopting ISO 9000 certification and the maturity of the quality culture are significant predictors of the benefits derived from ISO 9000 certification... organizations that have been audited to the ISO 9000 standards believe that the quality audit process contributes to business performance when the quality culture in the organization is well developed and the manager's motivation to gain certification has been to improve business performance nd not to conform to an international standard.

The individual element found to contribute most to business performance was Customer Focus"

Ref:  LONGITUDINAL EFFECTS OF THE ISO 9000 CERTIFICATION PROCESS ON BUSINESS PERFORMANCE, Terziovski, Power and Sohal, Monash University. 

In other words, why (and how) you 'do ISO 9001' will determine whether you gain the benefits available.

Or not.

Author:

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