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WHAT IS ISO 9000?

You probably have heard of it and maybe have even dealt with companies that are ISO certified. But what does it mean? ISO is the International Organization for Standardization with its headquarters located in Switzerland. The name ISO actually isn't an acronym, but is a word derived from the Greek word "isos" meaning equal. The name is used worldwide for this organization; therefore, avoiding the many acronyms that would result from the translation of the "International Organization for Standardization" into different languages. ISO is a nongovernmental entity and was established in 1947 to develop common standards that could be used throughout the world. Some of the things this organization is responsible for are the standardization of film speed, the size of bankcards, freight containers and metric screw threads.

In 1987 ISO published its first set of "generic quality management standards" known as the ISO 9000 series. They have since been revised in 1994 and then republished in 2000 but the purpose has remained the same, to assist international trade by providing a single set of standards that everyone everywhere would recognize and respect. The majority of the certifications issued currently are held in Europe, but more certifications are spreading quickly throughout the world. ISO itself does not issue the certifications, rather a third party commonly referred to as a registrar, independent of ISO, certifies that companies are in compliance with ISO standards.

The most updated standards, referred to as ISO 9001 2000, apply to all types of businesses and organizations in a multitude of fields. For example, it can apply to manufacturing, wholesaling, servicing, printing, aviation, agriculture, construction and software development, just to name a few. The certifications that have been recognized in the past were ISO 9001 1994, ISO 9002 1994 and ISO 9003 1994. These will soon be obsolete as ISO 9001 2000 has integrated them all into one. Any company that was certified under these standards now must update their quality system by December 15, 2003 and become certified under ISO 9001 2000. For the sake of simplicity in this article, we will refer to the applicable certifications as ISO 9000.

Why would a company choose to become ISO 9000 certified? Many decide that they need to improve the quality of their products and services or to become more competitive in the marketplace. Also, some companies must become ISO certified because their customers require the certification in order to do business with them or a governmental agency requires it. While the standards prescribed for ISO 9000 are within itself practical and significant, this isn't the only reason for its widespread appeal. The benefit of having an ISO 9000 certification is because of its international orientation. National standards bodies from more than 120 countries support ISO 9000. ISO 9000 is an obvious choice for any company doing business internationally or who services customers who demand an international standard of quality. Another advantage of conforming to ISO 9000 standards is that it lays down what requirements the company's quality system must meet, but does not mandate how these requirements will be met. This allows for flexibility in implementing quality systems across diverse businesses and cultures.

How do you become ISO 9000 certified? There are many companies and on-line resources that can guide what your company needs to do in order to comply with the new ISO 9000 Quality Management Standard. Once your quality system has been fully developed and implemented, an internal audit needs to be performed in order to ensure that every ISO 9000 requirement has been met. When the company has passed the internal audit, the company must use a registrar to audit the effectiveness of the company's quality system. If the registrar auditors agree with the company's systems, they will certify that the company's quality system has met ISO's requirements. An official certificate of conformity will be issued and the company's certification will be recorded. However, ISO doesn't require formal certification. A company can be in compliance without being registered by an accredited ISO certification auditor. But, customers will put more reliance on the quality management system of a company if it has a certificate of conformity to the ISO 9000 standards.

With all the benefits, becoming ISO 9000 certified can be a costly and time-consuming process. An estimate of the amount of time it takes to develop a complete quality management system can be from 3 months to 3 years depending on the number of people involved in the process, how knowledgeable they are, and how large the company is. It would be unreasonable to try to give an estimate of cost due to the number of factors involved, but the costs that can be incurred include internal costs for analysis of current quality systems, project planning, system development, system documentation, system implementation, training, internal audit and modifications. External costs can include consulting fees to assist with all of the internal costs just cited in addition to costs for registrars who perform the audit of quality systems and issue the certificate of conformity.

Becoming ISO certified is a big step, not one for every company. All the factors that are influencing your decision need to be carefully evaluated before moving ahead with the certification. Using consultants that specialize in ISO certifications can help alleviate the process and get it done more quickly. For more information and resources, the ISO headquarters' web site can be accessed at www.iso.ch.


Jennifer Raybon, CPA