Many companies focusing on "wrong" metrics for BPM projects, according to Forrester Report
Are you still focusing on quality and productivity to measure the success of your BPM project or programme? If so, that may not be enough, according to a new Forrester report. Here’s why.
Process performance metrics can give insight into how well a business process delivers against a range of metrics: time, resources, costs, quality, etc.
But in a recent Forrester report, analyst Craig Le Clair, argues that much of the information companies collect is just noise. "We often focus on what’s easiest to measure," he writes, "not what’s most important."
Part of the problem is that the business landscape has changed dramatically over the last two decades. The relentless digitization of the workplace continues, with technological innovation disrupting long-established industries and ways of working. Technology is both an opportunity as it enables new business models and a headache as its ceaseless drive forward leaves companies scrambling to keep up.
How much of what you're measuring really matters?
Le Clair’s research, done in conjunction with PEX Network, surveyed over 700 process professionals asking questions about the range of metrics that they are using to measure quality, productivity, customer experience, and business agility (i.e. the speed at which a company can launch new products and services to respond to changes in the market).
The report found that while companies have a vast array of metrics available to them, most focus on the metrics that are easiest to capture rather than the critical few that really make a difference. Productivity and quality metrics were the ones most commonly used in BPM projects, with "process cycle efficiency" (i.e. how long did it take?) dominating the list for productivity and "percent complete and accurate" (i.e. how much went right?) topping the list for quality metrics.
Many of the process professionals who responded to the survey would have had formal training in Lean and Six Sigma, both descended from manufacturing processes. Although both methodologies have expanded in scope over the last decade to include service industries like banking, healthcare, government, etc. a continued focus on quality and productivity metrics within this pedigree is unsurprising.
The trouble is that these metrics don’t tell the whole story, according to Le Clair.
Le Clair cites several problems with the way that companies are employing metrics including poor links between commonly used process performance metrics with business goals and the financial metrics typically being used in the C-suite in addition to metrics. Further, the metrics often only measure part of a process rather than getting a sense of performance across the entire business.
"Metrics today are limited to monitoring the efficiency of isolated enterprise functions and fixing tactical process gaps," writes Le Clair. There is a need, he says, for a "broader and more systemic set of metrics" to "discover, monitor and improve processes."
The key areas of opportunity Le Clair cites are better metrics for linking customer experience to the bottom line and more useful metrics for measuring how quickly the business processes and IT systems can respond to the changing markets (i.e. "agility").
This seems even more salient as the gains to be gotten from process automation and outsourcing have been falling as companies have squeezed cost and inefficiency out of many processes.
Craig Le Clair joins podcast programme Process Perspectives this week to tell us more about the report’s findings. Listen to the podcast here: BPM needs to go "moneyball"
A slide deck summarizing some of the key findings of the report is available for free on the PEX Network website. Access the slides here: Using Metrics To Drive BPM Excellence or access the full report Use a Metrics Framework to Drive BPM Excellence on the Forrester website (Forrester subscription or purchase is required).