Process Measurement - BPM Roundtable QLD
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For a copy of this presentation - please email marketing@leonardo.com.au Process Measurement is critical in ensure successful process based management It needs to be aligned and based on your view of the organisation i.e. your process architecture It is the means of governing process performance It is the key enabler for demonstrating process change It supports and it part of the ongoing nurturing of a process mindset – which includes a measurement friendly culture Understanding and managing process performance i.e. measures improves the organisation’s process capability
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Process Measurement - BPM Roundtable QLD
- 1. Process Measurement BPM Roundtable January 2015 Lida du Plessis
- 2. 2 Process Measurement © Leonardo Consulting 2015 Copyright Notice Copyright © 2015 Leonardo Consulting. All rights reserved. This work is licensed under a Creative Commons Attribution- NonCommercial-ShareAlike 4.0 International Licence Based on the Leonardo, Measuring Processes course . http://www.leonardo.com.au/documents/Leonardo-Consulting_Measuring- Processes.pdf delivered as part of the Leonardo Educational offerings: http://www.leonardo.com.au/downloads/education/Leonardo-Education.pdf
- 3. 3 Process Measurement © Leonardo Consulting 2015 Agenda 1. Process-based Management Context 2. A Methodology for Measuring Process Performance 3. Failure Modes 4. Wrap-up
- 4. 4© Leonardo Consulting 2015 Bank: $30 million annual savings [USA] Agency: -22% labour cost [Australia] Retail: +25% customer satisfaction [Europe] Manufacturer: -80% reported problems [Asia] Insurance: -97% assessment time [Australia] NGO: -80% procurement cycle time [Africa] Aid: 75% reduction in cost [International] Regulator: +500% productivity [Mid-East] Process-based management works
- 5. 5© Leonardo Consulting 2015 7 Enablers of Process-based Management
- 6. 6© Leonardo Consulting 2015 Why measure business process performance?
- 7. 7© Leonardo Consulting 2015 Reasons for measuring processes: • understand cross-functional performance • align with strategy • determine priorities • drive improvement • detect performance trends • determine capability range • uncover problems • change behavior • control risk • benchmark performance
- 8. 8© Leonardo Consulting 2015 Agenda 1. Process-based Management Context 2. A Methodology for Measuring Process Performance 3. Failure Modes 4. Wrap-up
- 9. 9© Leonardo Consulting 2015 ProMeasure® is the Leonardo methodology for process measures management Process Measurement Measure process performance If you aren’t measuring process performance, you aren’t doing process management, and can’t know if you are doing process improvement Measures and measurement methods
- 10. 10 SWOT, MoSCoW, Prioritization Matrix, Kano, Suggestions, Pain-Gain Analysis, Worrywillie Grid, Stakeholder Voting, Internal Selection Criteria Process Selection Techniques 1. Select Process Apply organization knowledge Develop Knowldege Management strategy Assess Knowledge Management requirements Identify and plan Knowledge Management initiatives Manage Knowledge Management initiative lifecycle Maintain ICT systems & services Develop ICT strategy Develop ICT architecture Implement & maintain ICT solutions Manage enterprise information Support ICT system users Generate innovative ideas Collect ideas Prioritize ideas Select idea Develop idea Maintain working environment Acquire operations assets Maintain assets Develop & execute Health & Safety Program Monitor working environment quality Resolve working environment problems Assure legal & policy compliance Document compliance requirements Assign compliance accountabilities Monitor & report compliance status Resolve compliance deficits Ensure data privacy & security Define data privacy & security policies Develop & manintain data managment controls Communicate data privacy & security standards Audit data privacy & security Support staff lifecycle Develop & maintain HR policies Recruit employees Develop & manage employee performance Reward & retain employees Redeploy & retire employees Onboard & maintain employee information Control financial resources Perform planning & management accounting Manage revenue Perform general accounting & reporting Manage asset accounting Administer payroll Control treasury operations Control accounts payable & expense reimbursements Establish & maintain financial controls * Patrick van Abbema, 2009 Boundary Conditions © Leonardo Consulting 2015
- 11. 11 Stakeholder Priority Matrix Stakeholder Diagram 2. Understand Stakeholders Process Vision Statement What is this process supposed to achieve? What do the stakeholders want it to achieve? If it was working as well as the key stakeholders, require, how would we know? © Leonardo Consulting 2015
- 12. 12 Measurement Themes Satisfaction, Time, Cost, Quality, Compliance, Capacity A Balance of Measures Internal /External Lead/Lag Quantitative/Qualitative Atomic/Aggregated Positive/Negative 3. Develop Measures © Leonardo Consulting 2015
- 13. 13 Is there a difference between process measures and organisational measures? © Leonardo Consulting 2015
- 14. 14 Good process measures ... highlight performance trends stimulate good behaviour align operations and strategy expose problems determine priorities create urgency encourage improvement deliver insights predict outcomes inspire commitment © Leonardo Consulting 2015
- 15. 15 Do we have the correct measures? Guess / Experience Reference Models Repeatable Methodology Rationalise the Measures The ultimate question: Do we have a viable set of the minimum number of important measures of actual process performance about which we have key stakeholder agreement and for which we have a measurement method that can cost-effectively gather objective, accurate data against a well-defined target? © Leonardo Consulting 2015
- 16. 16 Measuring Alignment Coordinate XYZ Program Award Competitive Grants (Type A) Allocate Regional Payments Award Competitive Grants (Type B) Award Competitive Grants (Type B) Seek proposals Monitor funding agreements Decide funded projects Develop funding agreements Resolve proponent queries Decide funded projects Receive proposals Decide final rankings Evaluate proposals Moderate assessments Communicate outcomes Does the set of process measures align with the next highest process level? Is there anything missing in the set of sub-process measures compared to the next highest level? © Leonardo Consulting 2015
- 17. 17 Look for Performance Leakage Points© (PLPs) Where 4. Validate Measures When As little as is necessary to understand current and trend performance of the process Stable process, less frequent measures Don’t become complacent about measuring an improving process. Dig deeper. Measures may need to change over time Measure the results of change © Leonardo Consulting 2015 © Roger Tregear, Leonardo Consulting
- 18. 18 For each measure we need to design an effective Measurement Method Is the MM reliable? Will it consistently provide accurate data? Is the MM cost-effective? Is the MM so difficult to execute that it will eventually stop being used? Does the MM rely on special skills or tools that may not always be available? MMs are important © Leonardo Consulting 2015
- 19. 19 Measurement Measurement Method Sources of data Set Target Ranges Estimate Current Performance Reality Check !! © Leonardo Consulting 2015
- 20. 20 Target the information Report by exception ‘Pull’ vs ‘Push’ reporting Visual Management Presenting performance data 5. Document Measures © Leonardo Consulting 2015
- 21. 21 Value Chain 1Process 1.1 Process 1.3Process 1.2 Lead the organization Manage risk & compliance Determine market strategy Manage capital Develop Vision Support the organization Deliver HR services Maintain physical facilities Deliver IT services Manage finances Value Chain 2Process 2.1 Process 2.3Process 2.2 A System of Measurement EPA Measures MMs Reports Response m Process 1.2 Process 1.2 The Voice of the Process - Process Owners are accountable for responding to actual and potential process performance failures. The Result… © Leonardo Consulting 2015
- 22. 22 Agenda 1. Process-based Management Context 2. A Methodology for Measuring Process Performance 3. Failure Modes 4. Wrap-up © Leonardo Consulting 2015
- 23. 23 Why does process measurement fail? © Leonardo Consulting 2015
- 24. 24 Too few / too many measures Wrong measures Narrow focus Measuring what is easy Confidence not evidence Unreliable data sources False precision Expensive collection Fear of measurement Lack of accountability Detached from value creation Common Failure Modes © Leonardo Consulting 2015
- 25. 25 Agenda 1. Process-based Management Context 2. A Methodology for Measuring Process Performance 3. Failure Modes 4. Wrap-up © Leonardo Consulting 2015
- 26. 26 Why Measure Process Performance? • Processes are the only way any organisation delivers value to its customers/stakeholders • No functional entity, by itself, can deliver value to an external customer • Organisations execute their strategic intent via their business processes © Leonardo Consulting 2015
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- 28. 28 © Copyright, Leonardo Consulting 2015 All rights reserved. The contents of this document are subject to copyright. No part of it may be reproduced in any way, by electronic means or otherwise without the written permission of Leonardo Consulting.