Since its inception in 1987, over a million organizations have obtained ISO 9001 certification. Though, the certification benefited them financially, it’s a known fact that those who obtain the certificate to ensure a robust internal quality management achieve more than those who use it in response to customer pressure or short term benefits. Financial and economic benefits come automatically once the organization implements ISO 9001 quality management principles, such as customer focus, involvement of employees, process approach, and constant improvement.
Importance of the certification
Studies show that organizations with ISO 9001 certificate made inroads into new markets and increased their sales, which eventually enhanced their financial performance.
A certified organization ensures better process management, productivity, and efficiency, which results in customer satisfaction, and certain external benefits automatically follow. However, once a company establishes its credibility in the market, the certificate itself may produce financial benefits, as it indicates that the company is complying with international quality guidelines. Though, the certification has helped companies to increase their sales, it’s largely unknown whether it’s a result of enhanced customer satisfaction or the signaling effect of certification.
Reports suggest that companies that implemented Quality Management System to achieve long term quality improvement have enjoyed more benefits as they are not driven by market demands and are internally motivated to perform better. They implement the underlying principles of quality management on a regular basis and succeed in quality improvement, which yields long term benefits.
External benefits that come with quality improvement include, quality products supplied to customers, an enhanced market share, better services, ability to compete in international market and conformance with their norms, recognition and presence in the market, and new market penetration.
Internal factors that generate financial benefits are increased productivity, effective use of resources and decreased percentage of products failing to meet the criteria, quality-oriented operation, reduction in complaints and redressal management, and employee motivation.
Some of the other benefits, which are not classified as either external or internal, are better documentation, customer perception of higher quality, competitive edge, better organizational communication, increased production effectiveness, and clarity of work. Though, accounts vary as to whether company size is correlated with level of benefits, the companies with ISO 9001 certification had better returns on investments than those who did not have one. Overall organizational improvement and cost-effective processes, such as reduction in cancellation of products owing to poor quality and surplus production eventually translate into financial benefits.