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Setting up a BPM Measurement System - Part 1 of 3

Screen Shot 2014-09-08 at 12.06.04 PMDo you know how each process is performing right now in your organization? And if you’ve improved a particular process do you know if you achieved the level of improvement you wanted?  It’s necessary to quantify data to be able to answer these two questions and provide objective ways to measure process and level of change.

So if you’re working on a single business process improvement project or many processes across the enterprise, you need a measurement system.  But how do you build one that is comprehensive, efficient and effective?

Where  do you start?  You have to start from where you are, so the Process Maturity Framework can help identify where on the continuum your organization is.  The first graphic below shows the five levels of the CMMI Process Maturity Framework, with descriptors at each level

CMMI process maturity graphic

The second graphic shows how data and measures contribute at the different levels.

Measures in CMMI graphic

As the graphic depicts, at Level 1, the measures are financial and operational, numbers that are needed to record how the business operates.  There is probably employee data as well.  But there is probably only anecdotal process data.

At Level 2, as the organization recognizes process and begins to do process improvement projects, it is critical to establish the basics of a measurement system.  This measurement system would start with data which provides quantitative information about how the process is currently working, what I call baseline data.  This data is likely to be about time, quality/defects, volume, costs, productivity or customer satisfaction.  The business process improvement (BPI) team needs to gather one to two output measures for each improvement target in the charter (Read more about the charter in “Is the BPM Charter an Important Starter?”), which will show the current health of the process—namely, how is it performing today.    Once this initial data is gathered, the Process Owner can set goal metrics, or metrics he wants to meet after the process is analyzed and improved.  In the process analysis phase, the BPI team gathers additional data to see where the biggest problem areas are, and then figures out how to improve steps, subprocesses, for these problem areas. At Level 2 the data is all about understanding and improving individual processes, and identifying measures that are relevant to the process being studied.

It is often not be easy to gather data at Level 2 as the data may have to be collected manually – from observing situations, by looking at emails and seeing where they start and go for workflow, by noticing the time stamps on emails, or from mashing together reports developed for another reason, but containing useful data.  It is not likely that the process data needed will be readily available because process data has not been as important as financial and operational data.

At Level 2 it is also critical to collect voice of the customer data as well as internal process data. The customer is the person who receives or uses the output of the process.  It can be an internal or an external customer.  Without customer data the team is staring at its navel, and is missing a bit part of feedback from this stakeholder.  

Part 2 will discuss Level 3 when the measures need to function at an organizational level. Part 3 will discuss Level 4 and 5 and provide a summarizing table of measurement system elements.

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