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“In each of our engagements, Shelley took the lead to work with me individually to design our objectives, approach, and measures of success. Working with Shelley, I was able to achieve clarity of the goal and methodology for achieving the goal prior to engaging within the stakeholder communities.

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Top Ten Metrics for BPM Projects (part 2)

Executives always want to know the metrics for a BPM project, and so they should.  But what metrics are important and for what reason?  Part 1 of this blog discussed the purpose of metrics (to make decisions and take action) and 5 key metrics for Getting Started with a BPM Project and for Analysis.  This blog completed the topics with 5 more metrics.

Take this 1 minute survey first to tell me about your projects and metrics. I will send you the results.

https://www.surveymonkey.com/s/6LRYTHC

Analysis Phase Metrics

Metric 6: Root cause metrics.  There are many techniques to determine root cause, such as Cause and Effect Diagram, Five Why’s, and Causal Loop Analysis.  Once you have used these qualitative tools, determine what quantitative data will further your analysis.  The most obvious data gathering tools are the Check Sheet and Pareto Analysis,  run charts and others. Again, it is up to the team to select where to gather the quantitative data.

Metric 7:  Flow metrics show where the bottlenecks in the process are.  To find the bottlenecks, gather data such as a time line showing the process time and wait time within steps and the wait time between steps. Look at piled up inventory–real supplies, in process product or tasks in queue.  If the process can remove or reduce the bottlenecks the flow will be smoother and faster with greater throughput.

Metric 8 – Input metrics/ Supplier metrics capture data about inputs to the process, either before the process begins or from outside suppliers or customers at steps within the process.  Often a process receives ‘defects’ or “incomplete and inaccurate information” when it accepts supplies or information into the process that are not complete and accurate.  Then the process has to do some rework to get them complete and accurate.  So gather quantitative data at the input point to find out how much data is missing, in what categories, and the cost and time of the rework necessary.  If the process fixes this problem at the source it reduces cycle time and increases quality, which will impact later steps positively. In one example, the Legal department took three weeks to approve the new sales contracts.  The BPM team found out that 35% of the new contracts had missing information; once the process was improved and got complete information upfront, the legal approval time dropped to less than one week.

Ongoing Monitoring and Continuous Improvement Metrics 

The purpose of these metrics is to track how the process is performing once the improvements or new design have been implemented.  Operators in the process use this data to make real time decisions about the process, such as getting additional resources or stopping the process if needed.  The Process Owner uses this data to say we need to study this sub process, and find out what is happening and take corrective action.  The Process Owner could compare this data to competitive data to see if there is a need for change.

Metric  9: Leading Indicators are measures at some early step or gateway in the process which show the early health of the process.  The leading indicator gives a signal that the process is on track toward the necessary output or not.  The leading indicator enables the employee or manager to monitor the process early and intervene to make adjustments as needed.  For example, if an order of 100 items was put into production at 10am and was scheduled for completion by 4PM, a leading indicator could be completion rate per hour.  If it was 1PM and there were only 10 items complete, and 50 should have been completed by that time, it would be time to take action.

Metric 10: Output metrics are metrics that measure the output.  This is the most general measure of the health of the process.  It could be a throughput number, a profitability number, a productivity rate, a quality rate, or others.

The Top Three Metrics

Which are the top three?  I will cheat a bit, and say here are the top three for the process improvement effort, and then choose three others for the Ongoing Metrics.

The top three for the BPM effort are

  1. Baseline Metrics
  2. Customer Metrics
  3. Improvement Targeted Metrics

Baseline metrics let the team know where the process is today; customer metrics provide the voice of the customer; improvement targeted metrics provide data that are relevant to the goals.  Of course these could be several, so again it’s kind of a hedge, but it is the right focus.

The top three for the Ongoing Metrics are leading indicators, output metrics, and again Customer Metrics.  You can’t ever forget the customer.  Of course you could also change what leading indicators and output metrics needed to be tracked, depending on process and Process Owner goals. 

Want to learn more about how to use key metrics and 3 other required techniques?  Register for my online course:  Analyzing and Optimizing BPM Processes (March 12 and 13). 

Don’t forget to take this 1 minute survey to tell me about your projects and metrics. I will send you the results overall.

https://www.surveymonkey.com/s/6LRYTHC

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1 comment to Top Ten Metrics for BPM Projects (part 2)

  • Great post about the subject.

    Business process metrics are not only essential for improvement initiatives, but they are key in day to day operations measurement. This applies to small manufacturers and Fortune 250 companies alike. The biggest challenge with defining business metrics and KPIs relative to most businesses, is how to find a benchmark that is truly comparable. Even harder to define and measure are KPIs for knowledge work and overhead groups. Any helpful starting point or template can jump start the effort. An example of metrics for corporate finance processes can be found here: http://opsdog.com/improvement/finance/processbenchmarking

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