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1 I
Measuring What Matters: Value Delivered by Process
Speaker: Alexandre Magno Vazquez Mello Duration: 60 minutes
Author:...
2 I2 I
Different types of indicators, different approaches
Indicators Types
Organizational
Strategic
Operational
Process
A...
3 I3 I
Presentation Motivation
How to do what measurement gurus´ tell you to do
Measurement Gurus´ Guidelines:
1. Measure ...
4 I4 I
Discard
Indicator´s Life Cycle
Identify Describe Implement Deploy Use Evaluate
Refine
5 I
What is a Process?
Process Definition
Stakeholder
Process Definition
(after Michael Hammer & Roger Burlton)
“A process...
6 I
After all, What is Value?
Value = Benefit-Cost
According to Roger Burlton (2010)
According to Philip Kotler (2000):
“T...
7 I7 I
Expectation = the experience perspective
• anticipation of how we should interact
and deal with the stakeholder
• h...
8 I8 I
What is a Process?
Value Delivery: Process Configuration (*)
• Methods / Techniques
• Standards and Policies
• Chec...
9 I
What is Business Process Management?
BPM Definition
BPM Definition
"Discipline that sustains and
improves the measurab...
10 I10 I
Why do we measure processes?
The Essence of Process Measurement
Why Do We Measure
Processess?
1. To evaluate if a...
11 I11 I
What Matters to Be Measured?
Discard
Identify Describe
Imple
ment
Deploy Use Evaluate
Refine
What “Matters” to be...
12 I12 I
What Matters to Be Measured?
Needs: Purpose statement
About "Purpose“:
• Responds to: "Why is the
process there?“...
13 I13 I
What Matters to Be Measured?
Needs: Purpose statement
Good Purpose statement
characteristics:
1.Define clearly th...
14 I14 I
What Matter to Be Measured
Result Statement: Definition and Chacteristics
About Results:
1.Must be established
fo...
15 I15 I
Example of a Business Result of Value from Customer´s
Standpoint
Process: Lend Financial Resources
Needs Money le...
16 I16 I
Example of a Business Result of Value from Customer´s
Standpoint
Process: Lend Financial Resources Performance Le...
17 I17 I
Example of a Business Result of Value from Shareholder´s
Standpoint
Process: Lend Financial Resources
Needs Make ...
18 I18 I
Example of a Business Result of Value from Shareholder´s
Standpoint
Process: Lend Financial Resources Performance...
19 I19 I
Implementing Indicators
Implementation Focus
• Which indicators to
implement
• Who will use the
measurements
• Ho...
20 I20 I
From Potential to Chosen Measures
How to select measures to be implemented
Measures to Be
Implemented:
• Identify...
21 I21 I
From Potential to Chosen Indicators
Identifiy Main Concerns
Main Concerns:
• Evaluate if process is working
well ...
22 I22 I
What Matters to Be Measured?
Value Measurement: Needs and Expectations
Which Process Went Wrong?
❶ ❷
23 I23 I
From Potential to Chosen Measures
What are Key Process Performance Question Characteristics? (1)
KPPQ Characteris...
24 I24 I
From Potential to Chosen Measures
Identifiy Main Concerns – Key Process Performance Question KPPQ (1)
Typical Key...
25 I25 I
CockPit Prototype Example
0
200
400
600
800
1000
1200
1400
1 a 10 11 a 20 21 a 30 > 30 days
Cancelation by Quitcl...
26 I26 I
Wrap-up
Approach´s step-by step
1. Select the right indicators
• Begin with effectiveness indicators (See Purpose...
27 I27 I
Wrap-Up
Let´s use the step-by-step guidance
❶ ❷
28 I28 I
Wrap-up: Which “Sell Cake” Process went wrong
Result Statement: Example and potential measures
Process: Sell Cake...
29 I29 I
Wrap-up: Which “Sell Cake” Process went wrong
Role:
What we have to be shown on a cockpit?
Performance compared t...
30 I30 I
Wrap-up
Measurement System Pilars
Basic Performance Measurement
Transformational Performance Measurement
“Transfo...
31 I
Measuring What Matters: Value Delivered by Process
Speaker: Alexandre Magno Vazquez Mello Duration: 60 minutes
Author...
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Medir o que importa: Valor entregue pelo processo

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Muitos gurus de medição afirmam que somos ser sobrecarregado por medidas porque nós não focamos no que realmente importa. Concordo e acrescento que a de identificação de medidas tem sido muito mais uma tarefa de criatividade do que uma investigativa ou analítica.
Com base no conhecimento sobre que resultados de valor estão sendo produzidos e quais são principais preocupações da gestão do desempenho de processos, esta apresentação irá mostrar uma abordagem para identificar indicadores e mostrar suas medida de uma forma muito prática e útil. A apresentação abordará os tópicos:
• O que realmente importa ser gerenciado
• Ciclo de vida de Medição
• Definição de resultados do processo: as partes interessadas, necessidades e expectativas
• Identificação de Indicadores: de potenciais a necessários
• O papel das “Questões Chave de Desempenho” aplicadas a processos
Criação de cocktpits: dicas práticas

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Medir o que importa: Valor entregue pelo processo

  1. 1. 1 I Measuring What Matters: Value Delivered by Process Speaker: Alexandre Magno Vazquez Mello Duration: 60 minutes Author:Date:Presented at: November, 6th - 2015
  2. 2. 2 I2 I Different types of indicators, different approaches Indicators Types Organizational Strategic Operational Process And much more ... Sub-Types: • Lagging • Leading Sub-Types: • Lagging • Leading
  3. 3. 3 I3 I Presentation Motivation How to do what measurement gurus´ tell you to do Measurement Gurus´ Guidelines: 1. Measure what matters 2. Define a small set of good indicators 3. Establish a context to help to understand the measurements 4. Look for a Measurement System that inspire improvements and business insights
  4. 4. 4 I4 I Discard Indicator´s Life Cycle Identify Describe Implement Deploy Use Evaluate Refine
  5. 5. 5 I What is a Process? Process Definition Stakeholder Process Definition (after Michael Hammer & Roger Burlton) “A process is a repeatable and organized set of actions performed to produce a result of value to customers and other stakeholders”
  6. 6. 6 I After all, What is Value? Value = Benefit-Cost According to Roger Burlton (2010) According to Philip Kotler (2000): “The total cost is the set of costs that consumers expect to incur in evaluating, obtaining, using and disposing of a product or service” "The benefits in customer insight comes from fulfilling their needs or meeting their expectations"
  7. 7. 7 I7 I Expectation = the experience perspective • anticipation of how we should interact and deal with the stakeholder • how we deliver service • if not met, we will have disappointed the stakeholder but perhaps not failed outright • what potentially delights the stakeholders as long as needs are met Define Stakeholder Needs and Expectations (*) 7 Need = foundational products and services value perspective • a fundamental necessity of what we must accomplish now and in the future • essentially the process outcomes and perceived stakeholder value • if not met we will have failed outright • what satisfies the stakeholder Kano Chart (*) Roger Burlton
  8. 8. 8 I8 I What is a Process? Value Delivery: Process Configuration (*) • Methods / Techniques • Standards and Policies • Checklists • Skills requirements • Quantity definition • Bonuses rules definition • System and Tools requirements • Networks and computers performance requirements • Layout requirements • EHS Requirements • Vehicles requirements • Organizational requirements (formal and informal) and reports • Management roles to be played • Inputs specification • Demand forecast • Stakeholder´s partial and final results identification • Outputs definition and destinations • Purpose, Results, Goals Business Process: • Activities flow • BUs involved Business Performance: • Performance Goal/Level (*) After “Roger Burlton Hexagon” Start: Business Event End: Business Outcome Enabling Technology Business Performance Intent & Strategy OutputsInputs
  9. 9. 9 I What is Business Process Management? BPM Definition BPM Definition "Discipline that sustains and improves the measurable performance of business processes by optimizing processes and capabilities throughout the Organization." (Roger Burlton)
  10. 10. 10 I10 I Why do we measure processes? The Essence of Process Measurement Why Do We Measure Processess? 1. To evaluate if a process has been producing the results that it is supposed to after being: • Created, • Changed (to keep its intended performance level) or • Improved (to reach a new performance level) 2. To evaluate if it will produce the results that it is suposed to during its execution 3. To promote/ensure good behaviors Appearances are deceiving
  11. 11. 11 I11 I What Matters to Be Measured? Discard Identify Describe Imple ment Deploy Use Evaluate Refine What “Matters” to be Measured • Everything that describes what the process is supposed to do or produce, specially: • Process´ Purpose • Process´ Results
  12. 12. 12 I12 I What Matters to Be Measured? Needs: Purpose statement About "Purpose“: • Responds to: "Why is the process there?“ • Determines the effectiveness of the process • Synthesizes knowledge about what the process is all about • Helps to understand why the process is needed
  13. 13. 13 I13 I What Matters to Be Measured? Needs: Purpose statement Good Purpose statement characteristics: 1.Define clearly the the needs to be met 2.Specific 3.Is the cornerstone to measure process effectiveness
  14. 14. 14 I14 I What Matter to Be Measured Result Statement: Definition and Chacteristics About Results: 1.Must be established for each stakeholder 2.Are comprised by 4 parts: • Closing event • Outputs • Value attributes • Performance level 3.Drives process development / improvement 4.Is the cornerstone for indicators identification Lend MoneyLoan request Inputs Applicant Share holders Stakeholders Loan portfolio Money available Request rejected Outcome of Value
  15. 15. 15 I15 I Example of a Business Result of Value from Customer´s Standpoint Process: Lend Financial Resources Needs Money lent from an Organization Purpose Lend money to Customers according to Customer´s needs and payment capacity Expectations (Perceives) ↓ Time ↓ Interest rate ↓ Embarassment ↑ Convenience Outputs (Receives) Signed Contract Money Application Rejected Customer´s Perspective End Amount avaiable to be used Value Atributes
  16. 16. 16 I16 I Example of a Business Result of Value from Customer´s Standpoint Process: Lend Financial Resources Performance Level Needs Money lent by an Organization Purpose Lend money to Customers according to Customer´s needs and payment capacity Expectations (Perceives) ↓ Time Application approved in 2 hours or less ↓ Interest rate X% or less ↓ Embarassment Y% complaints ↑ Convenience 95% channels 24 x 7 x 365 Outputs (Receives) Signed Contract Money 30 minutes 2 hours Customer´s Perspective End Amount avaiable to be used 24 working hours
  17. 17. 17 I17 I Example of a Business Result of Value from Shareholder´s Standpoint Process: Lend Financial Resources Needs Make Money from lending Purpose Lend money to Customers according to Customer´s needs and payment capacity Expectations (Perceives) A healthy loan portfolio ↓ Risk of not getting the money back ↓ Minimum default rate → Competitive loan conditions ↓ Minimum time ↑ ROI Outputs (Receives) Signed contract Loan portfolio Shareholder´s Perspective End Booked loan Value Atributes
  18. 18. 18 I18 I Example of a Business Result of Value from Shareholder´s Standpoint Process: Lend Financial Resources Performance Level Needs Make Money from lending Purpose Borrow money to customer as negotiated Expectations (Perceive) A healthy loan portfolio ↓ Risk of not getting the money back 2% ↓ Minimum default rate 2% → Competitive loan conditions Within X% of average in market ↓ Minimum time Approved in 2 hours or less ↑ ROI X% Outputs (Receive) Signed contract Loan portfolio Shareholder´s Perspective End Booked loan 72 working hours
  19. 19. 19 I19 I Implementing Indicators Implementation Focus • Which indicators to implement • Who will use the measurements • How to present the measurements • How to organize measurements in order to be useful • ETL and Cockpit coding Discard Identify Describe Imple ment Deploy Use Evaluate Refine
  20. 20. 20 I20 I From Potential to Chosen Measures How to select measures to be implemented Measures to Be Implemented: • Identify Decision Makers • Identify Their Main Concerns
  21. 21. 21 I21 I From Potential to Chosen Indicators Identifiy Main Concerns Main Concerns: • Evaluate if process is working well through Key Process Performance Questions (KPPQ) (1) (1) After Key Performance Question (KPQ) by Bernard Marr
  22. 22. 22 I22 I What Matters to Be Measured? Value Measurement: Needs and Expectations Which Process Went Wrong? ❶ ❷
  23. 23. 23 I23 I From Potential to Chosen Measures What are Key Process Performance Question Characteristics? (1) KPPQ Characteristics: • Open question • Performance related to allow evaluate how well process is performing • Short and clear • Focus on present and future • Refined and improved as used • Base for reports, communication and review performance (1) Based on Key Performance Question (KPQ) by Bernard Marr
  24. 24. 24 I24 I From Potential to Chosen Measures Identifiy Main Concerns – Key Process Performance Question KPPQ (1) Typical Key Process Performance Question • To what degree … • To what extent … • How well … • How effective … • Why do we believe that … (1) After Key Performance Question (KPQ) by Bernard Marr
  25. 25. 25 I25 I CockPit Prototype Example 0 200 400 600 800 1000 1200 1400 1 a 10 11 a 20 21 a 30 > 30 days Cancelation by Quitclaim Untill: DD/MM/YYYY Value Quantity 0 50 100 150 200 250 1-3 4-6 6-12 >12 Consecutive Withdraws (Qtty) Period: de MM/YYYY a MM/YYYY Role: Executive Management KPPQ: Why do we believe we are reaching the right target on selling retirements funds?
  26. 26. 26 I26 I Wrap-up Approach´s step-by step 1. Select the right indicators • Begin with effectiveness indicators (See Purpose) • Focus on value creation (See Value Atributes) 2. Measure what matters (few & good indicators) 3. Don´t expect to be perfect on the first time (Identify, Describe, Implement, Deploy, Use, Evaluate, Refine) “Transforming Performance Measurement“, Dean R. Spitzer
  27. 27. 27 I27 I Wrap-Up Let´s use the step-by-step guidance ❶ ❷
  28. 28. 28 I28 I Wrap-up: Which “Sell Cake” Process went wrong Result Statement: Example and potential measures Process: Sell Cakes Performance Level Needs A cake for a party -- NA Purpose Sell cakes, produced on demand, as ordered by the customer 0.5% returns 2% complaints Expectations ↑ Resemblance to the model 3% complaints ↑ Tastes good 5% complaints ↑ Healthy Up to X calories ↑ Delivery on time 98% ↓ Mishandling 1% ↓ Damages (aftaer delivery and set up) 1% ↓ Cleanliness complains (after delivery and set up) 3% complaints Outputs The cake Customer´s Perspective End Cake where the party will take place -- NA
  29. 29. 29 I29 I Wrap-up: Which “Sell Cake” Process went wrong Role: What we have to be shown on a cockpit? Performance compared to each specific goal. , Senior Management Profits Fines Suits Sales Management KPPQ: Why do we believe we are making good sales? or To what extent we are fullfilling our promisses? Taste Healthy On-time delivery Mishandling Damages Cleanliness Resemblance
  30. 30. 30 I30 I Wrap-up Measurement System Pilars Basic Performance Measurement Transformational Performance Measurement “Transforming Performance Measurement“, Dean R. Spitzer Interactivity Integration Focus Context Outstanding Management Outstanding Organizational Performance Negative: Control, Punish, Reward Positive: Give feedback, Learn, Improve Negative: Industry measures Positive: To measure what matters Negative: Disfunctional Measures Positive: Cause & Effect Relationship Interdepartamentals measures Negative: Focus on the technical aspects of measurement Positive: Focus on the social aspects • Traditional Measures • Greater emphasis on volumetric • Main use: judgment and consequent reward and punishment • Static measurement system • Measurement by functional area • Lack of charge of the measuring system
  31. 31. 31 I Measuring What Matters: Value Delivered by Process Speaker: Alexandre Magno Vazquez Mello Duration: 60 minutes Author:Date:Presented at: November, 6th - 2015

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