Setting high impact KPIs to get real value of BPM investments
One of the key benefits of BPM solution is that it provides insights into the performance of business processes through Business Activity Monitoring (BAM), and enables process analysts to identify impediments & bottlenecks in performance of the business processes. While that sounds very exciting, getting pointers to the real bottlenecks is not easy. ......
For any meaningful process performance analysis, it’s imperative that the statics gathered through BAM have business significance. For this it is very important that business relevant high impact KPIs are defined during process design. ...
To define business relevant KPIs following methodology can be adopted
- Define key objectives for BPM initiative, such as enhance customer responsiveness, improve quality, expand market share, reduce product design cost etc.
- Translate the objectives into quantifiable goals, e.g. reduce turnaround time for customer on-boarding from 5 days to 2 days, increase new customer contacts in southern region to 45 per week, …
- Having defined quantifiable goals for BPM initiative next step would be to identify candidate processes for implementation and categorize these processes into critical process, value add process, support process etc. Categorizing processes into these broad categories helps define goals for the process categories (and thus for each process), e.g. value add process have maximum potential for enhancing market penetration, increase revenue etc, while support processes greatly impact customer satisfaction.
- Once processes are categorized and process goals are defined, business analysts would analyze each process and from the process goals derive matrices and KPIs for all critical activities
- Next step is to set milestones and targets for improvements in these KPI measures
Defining KPIs derived from business goals helps analyze performance of the business processes and facilitates identifying real impediments in achieving the performance goals, which helps redesign the business processes and improve business performance
