CROMWELL Business Resultancy Limited Heinz Wehrli heinz.wehrli (at) eBEx

1. CROMWELLServicesOperatingProcedures2008CSOP2008 Training – ID:CSOPT40” Auditing” (Time Schedule ca. 6 hours) CROMWELL Business Resultancy Limited Heinz Wehrli heinz.wehrli (at) eBExperts.com

2. THANK YOU, MERCI, DANKE, GRAZIE

3. All you need to know to get started • AGENDA: • CROMWELL’s Quality Statement • What is Quality, and a ISO9000 certified QMS? • The Audit Process • Auditing Definitions • Planning & Preparation • Conducting & Writing Up • Following Up • One Slide Summary • Training Courses • 3 Exercises included in this training to get a 1st Audit experience by yourself CSOP2008

4. OUR QUALITY STATEMENT CROMWELL’s Quality Statement The Quality of everything we do, brings value to our Customers and justifies their decision to do business with us. We will keep improving our Quality to our Customers, maintain the highest level of confidence in our Products and Services. To meet those, needs will be driven by our Key Result Areas of: Accountability, Sustainability Growth and Development We will continue to support the quality of CROMWELL Services through our values of: Equality of Access, Integrity, Openness in Communication Reliability, Social Justice, Service Excellence Workplace Trust and Harmony We strive to be a benchmark Consulting Services Organization and through the implementation of our Quality Management system we seek to continually develop and improve our: Customer and Market Focus, Customer Satisfaction Innovation, Quality and Improvement Knowledge and Information Leadership, People, Strategy and Planning Success and Sustainability Peter Endress, CEO, CROMWELL Business Resultancy Ltd.

5. - Competitive Advantage - Mandatory in some sectors - Good story to tell - Reduces risk - Maximizes (chance of) success - Global objectives CUSTOMER SATISFACTION - The Advantages of having an ISO 9000 certified QMS

6. Our QMS is named CSOP2008Overview Manual(Overview) Processes Method, Rules,WorkInstructions

7. Our QMS CSOP2008Manual and Procedures 100 - Quality Handbook QMS CSOP2008 101 - Bid & Proposal Management 102 - Contracts 110 - Engagements 111 – Audits, (Projects System + Branches) 112 - Reviews 113 - Health Checks 120 - Document Control 121 - Document Filing AA - Roles & Responsib. AB - SLA’s & Interfaces

8. WHAT & HOW • - tasks • - deliverables • - procedures • - standards • templates & tools • Roles Mechanism to defineWHAT, HOW, WHO and WHERE for the work in a specific organization WHO - org. structure - roles & responsibilities WHERE - Location - Milestone What is a Quality ManagementSystem (QMS)? …or in real words: The Critical Success Factor’s (CSF) are: Implementation, implementation,… not Documentation!

9. CSOP2008 Material Policies & Procedures

10. The Audit Process Auditing Definitions - General • We distinguish between: • Audit • Health Check (short comparison with Audit next Slide) • Review (short overview next Slide)

11. ReviewsThe Purpose of it • Find errors • Find problems and issues • Evaluate consistency • Check conformance to procedures and standards • Evaluate completeness

12. Concentrate on Process and following Standards >100 days FP or >200 T+M Regular planned during engagement Uses Checklist Also used at Organization level and Externally Concentrate on Progress, Status and Commercial Health >100 days FP or >200 T+M On Startup and when RED in Tracking Uses Checklist Also may be used where Customer is managing the engagement (appropriate parts) Audits & Health ChecksDifferentiating Audits vs. Health Checks

13. System Audit • Compliance Audit • External Audit (“3rd Party” e.g., Certification Body) • “2nd Party” Audit (e.g., Supplier) • Internal Audit The Audit Process Auditing Definitions - Types of Audit

14. The Audit Process Planning & Preparation - Plan Audit Defined in annual Audit Programme • Organization (internal & external) • Project Defined in the Quality Plan or PMP Plan for Engagements (Assignments + Projects) Guideline when planning project audits • Size of project (e.g. <50kEUR, <200kEUR, >200kEUR?) • Duration of project • Project risk • Balance what you are trying to achieve against the effort required to achieve it

15. Experience & Knowledge • Personal Skills • Independence • Trained The Audit Process Planning & Preparation - Plan Audit (Skills)

16. The Audit ProcessPlanning & Preparation - Prepare for Audit Before the Audit... • audit agenda • preparatory documentation • checklists • balanced audit sample • well-briefed auditor • control the audit The Value of Checklists...

17. The Audit ProcessPlanning & Preparation - Prepare for Audit (Checklists) • How many? • How detailed? • Obtain preparatory documents • Use it properly!

18. Workshop - Prepare a Checklist • You are preparing to audit an CROMWELL-managed project. • It is a straightforward custom development project, i.e., no application implementation is involved. • The System Specification stage (analysis) has already been completed (by CROMWELL) and signed off by the client. • Given this scenario, using the QP/PMP for the project, and assuming that the project is currently in the middle of the System Level Design Stage, please write a short checklist that you would use to conduct this audit, (you may refer to the generic audit checklist). E X E R C I S E 1

19. The Audit ProcessConducting & Writing Up - Conduct Audit (Strategy) • Introduction Is Important • Strategy • Current = recommended approach • Completed (upstream/downstream) • Questioning • Management and team members • Be understanding!.... (& polite) • No question is too simple! • Open questions • Listen • Remain neutral • Ask for explanations/example • Objective evidence Listen! Current? Completed?

20. The Audit ProcessConducting & Writing Up - Conduct Audit (Tips) • Work through checklist • - Auditor should select sample • - To pursue or not to pursue..… • - Take notes but be discrete! • Objective Evidence • (“Quality Records”) • - Documentation • - Statements • - Observations

21. The Audit ProcessConducting & Writing Up - Conduct Audit (Reactions) • Reactions will vary • Tactics • - diversionary • - delaying • - arguments • Reasons for Hostility? • Stay Calm!

22. Quality? Cost Time The Audit ProcessConducting & Writing Up - Conduct Audit (Effectively) • What to look for? • Add Value • Keep your Perspective

23. The Audit ProcessConducting & Writing Up - Conduct Audit (Nonconformity) What Is A Nonconformity? • Minor Nonconformity - Occasional Lapse • Major Nonconformity - Total lack of adherence to a part of QMS or paragraph of standard- Too many minors.......… • Check A Representative Sample

24. The Audit ProcessConducting & Writing Up - Writing Up (Record Nonconformities) • Inform Auditee as soon as possible! • Weigh up explanations & facts • Take your own notes during Audit • Formally document at end of Audit • Remember: • what is a nonconformity? • objective evidence required • if in doubt, consider checking wider sample

25. The Audit ProcessConducting & Writing UpWriting Up (Writing Nonconformity Statements) • Accurate • Complete • Helpful • Brief …& at all times FACTUAL & NON - PERSONAL

26. The Audit ProcessConducting & Writing Up Writing Up (Writing Corr. Action Statements) • Always address: • Immediate Action • Root Cause Action

27. The Audit ProcessConducting & Writing Up - Complete Audit • Signed AAF’s • Your Notes • Agreed Follow Up Date • Copies of AAFs

28. The Audit ProcessExample – Audit Action Form (AAF)

29. WorkshopWriting Nonconformity & Corrective Action Statements For each of the following auditor findings you should decide:-> what nonconformity should be raised-> what the corrective action should beRecord these statements on the audit action forms (supplied to you on overhead slides) and be ready to present these to the group. • 1. The team leader’s copy of the ABC Project’s Quality Plan does not have a reference number. • 2. The team leader said that the client had raised a problem 2 weeks ago concerning the fact that when they enter the “department” field on the “employee details” screen, the list of values (LOV) does not come up. The auditor could not find this problem recorded anywhere. • 3. The auditor spoke to one of the programmers. When asked about testing the programmer said that he was very rigorous about testing. When asked , the programmer said he hadn’t produced test specifications for modules 4, 5 and 6 because he had been in the industry 12 years and felt that since he was so experienced he didn’t feel that it would add any value. • 4. Module 34 was at version 3. According to designer X, changes had been necessary because of a change in the customer’s requirement to the way that they wanted to process invoices. There was no evidence that these changes had been approved by CROMWELL, or the client. • 5. The ABC Quality Plan states that “audits will be conducted at the discretion of the project manager”. According to the project manager he is thinking about having an audit towards the end of the project. • 6. When speaking to the Consulting Director, it was found that he had not attended the last two meetings covering a management review of the quality system. as he was not aware of the requirement to do so. On further investigation, the auditor discovered that a Management Review of the quality system had not taken place for over a year. • 7. When looking at the Customer Complaints Log for November and December 2009 for the S.M.A.L.L. business unit, it was noted that 1 complaint (for customer XYZ) was still open after 30 days. The S.M.A.L.L. complaints administrator had not been able to get a response from the complaint owner. • 8. The auditor could not find any Bid Qualification & Approval Forms for S.M.A.L.L.. Additionally, auditor discovered a bid been sent out on the day of the audit to customer X which had an estimated total value of EUR 1million, was 1Y duration and had non standard T&C’s, and it was not approved. E X E R C I S E 2

30. The Audit ProcessConducting & Writing Up - Write Audit Report • Write Audit Report From Agreed AAFs • Use Audit Report Template (when available) • Management Summary • Word for word copy of AAF nonconformities and corrective actions • Observations • Date to follow up • Factual, Objective Wording!

31. The Audit ProcessConducting & Writing Up Write Audit Report (Distribution) • Authorization Prior To Distribution • All Reports Should Be Distributed:- to: Participants & Management - cc: Group Quality Management + Operations • Reports Citing major nonconformity MUST be copied to the Group CEO

32. Exercise – Do your Audit Interview You have to do an Audit interview • Focus to the planned script and questions • Please stay cool • Ask the questions in a controlled manner • Be kind E X E R C I S E 3

33. The Audit ProcessFollowing Up - Monitor Actions • Always Follow-Up • Follow-up AUDIT needed? • Close the loop- Sign original audit report- Inform/copy Auditee

34. The Audit Process Summary - Audit Programme Dates - Date(s) in Quality Plan Plan Audits - Audit Agenda - Audit Checklist Prepare for Audit - Audit Action Forms Conduct Audit Produce Report - Audit Report - Quality Records - Evidence Monitor Actions

35. CSOP2008 – One Slide Summary • Audits are necessary to compare an ensure the audited result is conform to the expected one. • Plan/Schedule always the Audit! • Communicate upfront the Audit what is expected from the Auditee • Have an opening Meeting with the folks involved in the Audit and communicate crystal clear what is expected • State with objective and written wording what your findings are • Agree the Action points to be resolved until a defined date • Have a closure meeting with the same audience of people and agree the follow up Process: Action and Time Schedule! • Always be kind and helpful to the Auditees!

36. Training Courses CSOP2008 Specific CSOP2008 training courses have been designed to address communication of the detailed requirements of CROMWELL’s QMS. • An appropriate alternative could be mentoring - on an Engagement this may be done via “one to one” coaching by a senior (CSOP2008 knowledgeable) to a junior team member. • To find out what the pre-requisites for attending a specific course are and where the next course will be held and to book, please contact the CROMWELL Group Quality Manager.  Check out, if further details of courses may are published: http://www.cromwell-br.com/csop This Course Next is doingan Audit byYourself!

37. Q u e s t i o n s…

38. Thanking for your ContributionAnd Please enjoy your further QMS Course Ride!