Process Performance Measurement
Process Performance Measurement is the formal, planned monitoring of process execution and the tracking of results to determine the effectiveness and efficiency of the process. This information is used to make decisions for improving or retiring existing processes and/or introducing new processes in order to meet the strategic objectives of the organization.
Having the right performance data at the right time in the right format is a prerequisite for effective management. Of course, ‘having data’ is just one part of good management—it is necessary, but not sufficient. We need to use that data to determine where, when, and how we should actively intervene to secure a well-understood organizational performance outcome. We also need good process performance measurement if we are to prove that process improvement has worked, that it has delivered real benefits. “Seems faster” or “probably cheaper” or “customers seem happier” are not the evidence we need for a solid business case. In developing support for process-based management there is no substitute for credible evidence of proven positive results. Why is it then that process performance measurement is both an obvious requirement and commonly absent management tool? Below are four main reasons — all of which can, and should, be overcome with appropriate responses.
- Lack of motivation. Why bother? We already have lots of KPIs. Some people immediately see the benefits of process-based management, some never get it, and the majority don’t care much either way. Benefits need to be defined and continually sold. Organizations always have functional KPIs (think KPIs related to boxes on the organization chart), but not so many that measure cross-functional processes, perhaps none. For process measurement to gain traction, the benefits of process-based management must be clear and accepted.
- Wary of measurement. In this organization measurement is a precursor to punishment. A manager in an IT services company resisted process improvements that would radically improve a serious customer satisfaction problem. What would he do that? Because he knew that he would be sacked for not improving the problem earlier. That sort of organizational culture will never be conducive to active process performance measurement—to believing that continuous problem finding is an obvious prerequisite for continuous improvement.
- Swamped by measurement. You’ve got to be joking—we’ve got hundreds of KPIs already. This is true. Organizations inevitably have lots of informal and formal performance measures. They are given different names, they are derived in different ways, and they have different impacts on management. Mainly though these existing measures are functionally bounded, i.e. they relate to something is within the control span of one organization chart box. This says nothing about end-to-end, or customer-to-customer, performance. Measuring the critical few KPIs of the high-impact processes will, over time, reduce the aggregate number of active KPIs as cross-functional process performance becomes more important than isolated points of performance. Process performance measurement rollout can be done one process at a time.
- Daunted by perceived complexity. How can we have KPIs for our thousands of processes? The idea of ‘measuring all of our processes’, is obviously daunting. However, not every process needs to be measured. A hierarchy of processes is defined by the process architecture. The measurement of the performance of any process also reflects the performance of its sub processes. Starting at the top of the process architecture, and identifying the subset of high-impact processes, allows the capture of practical process performance without the need to continuously measure every process. Which processes need to be actively measured will also change over time. Process performance measurement need not be complex if approached in a structured, methodical way.
These four reasons for a lack of effective and sustained process performance measurement can be summarized as: a lack of knowledge of the benefits, an organizational culture that is not measurement friendly, mistaken concerns about the enormity of having to actively measure a very large number of processes, and unnecessary concerns about the complexity of building a new measurement system. A practical approach to process performance management is needed that will deal with all these potential barriers to success.