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BPM: Theory to Practice

Tim Huenemann

Metrics per Gallon

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Metrics are a big part of BPM. "If you can't measure it, you can't manage it." Raise your hand if you've heard that one enough times! Rather than go into a discussion of how to decide what to measure - identifying your KPI's, operational metrics, scorecards, etc. (a topic for another day), I want to discuss a nuance of metric definition that I've run into on occasion: how to represent the numerical metric for a rate (e.g. rate of production, rate of consumption).

A good example for this topic is fuel mileage. In the United States, we are intimately familiar with the metric of miles per gallon (MPG). In comparing vehicles, you analyze fuel economy by comparing this number. Obviously, this is a key metric for automobile performance. Easy to evaluate, right? The higher MPG, the better. As cars get more efficient, they go from 15 mpg, to 25 mpg, even 35 mpg. This gives people a good quantitative view of car A vs. car B.

But wait - let's consider Europe. They measure fuel economy in liters per kilometer (or, to compare apples to apples, gallons per mile (GPM)). That seems confusing to Americans. Upside down, even! So which method should you use? Is one better than the other? Consider these graphs (over the years I have drawn these on white boards, but recently I did it on a tablecloth at a business lunch - it was part of the restaurant's motif - paper tablecloths to write on - honest!):

miles per gallon_2615_image002.png

This graph shows the annual cost in gasoline, assuming 15,000 miles driven. It shows that "step by step" improvements on an MPG scale can be misleading. Because it's not linear, a one MPG improvement on the MPG chart is worth more on the left side of the chart (with your old gas guzzler) than on the right. The value of a stepwise improvement declines as the metric improves. Now, this is easy enough to understand if you explain it, perhaps with a graph like this, but do we need to require that extra analysis? Can we improve the information?

miles per gallon_2615_image004.png

On this GPM chart, on the other hand, the linear representation makes it more clear. Think of why you have this metric in the first place: you want to know how much money you spend on gas, and how that expense changes as mileage changes. That is the purpose of the metric. And this perspective provides a more straightforward way to judge that.

How can you apply this to a business scenario? Compare this fuel mileage example to an inbound call center operation. Instead of needing to drive 15,000 miles per year, say you need to handle 15,000 calls per year. And instead of your resource input being gasoline, it's call center representative labor. Now consider a metric for the call rate. Do you want to report on calls handled per hour (production per labor input, similar to MPG), or do you want to see minutes per call (labor input per production unit, similar to GPM)? My default recommendation is always to go with minutes per call. Again, this is a nuance, not a make-or-break consideration. But this is an opportunity to review your metrics to make them as crisp and meaningful as possible. As always, your mileage may vary. ;-)

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This blog offers a true “practitioner’s perspective,” with issues and commentary based on real-world experience across many industries.

Tim Huenemann

Tim Huenemann is the senior principal for business architecture and process management at Trexin Consulting. He has more than 20 years of experience in process management and business-focused IT. In his consulting work, he helps organizations execute business strategy by implementing effective process management and IT solutions. He regularly translates BPM theory into practice, and practice, and more practice. Contact Tim at tim.huenemann[at]trexin.com.

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