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Are KPIs Critical to BPM Success?

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As this Process Marker blog asks, Are KPIs Necessary for BPM Success?

Also, please note, coming this June 23rd is the fifth annual BPM in Action virtual conference!

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  • If anything KPI’s should be defined as the precursor before going for broke with BPM, not only will they support the business case for deciding whether an initiative is viable but it sets off the thought process in terms of what should be measured after implementation well in advance instead of as an afterthought.

  • Oh, well. How else would you measure the success or whether you got any success with the initiative at all?

    KPIs don't have to be all the rocket science and all top-down correlation stuff every time, if that's the scary part. It's plain simple Key Indicators for your performance - you define how you plan to measure your performance, you measure how you perform, do something to improve it (here BPM), and measure how successfully you improved.

    Yes, critical. Not only for success of the initiative (any, not only BPM, actually) - but in order to also measure how well you did whatever you planned to.

  • KPIs are definitely critical to success. How otherwise would we know if a process is working or not? Improving or deteriorating?

    The art is in defining the KPI. Starting with agreement on the end-to-end process first means that KPIs can be made more real. Not just what we already measure, but what we should find a way to measure. More leading and fewer lagging indicators.

    fyi - for a client story about a great KPI metric for operational excellence in CRM - which has parallels in many other areas: http://bit.ly/brMpKx

  • Ashish beat me to it. Yes, KPI's are critical, for any endeavor not just to measure but to motivate and direct activity.

    Here's a very non-BPM example. When your team goes to a trade show, how many leads/scans should they come home with in order to consider the iniative and the expense a success? Based on historical data, I challenge my teams to come home having scanned the badges of 25% of the approximate addressable attendee population. That gives me a benchmark of how well we were able to attract traffic.

    That metric has created motivation. The teams at the last few conferences we have attended have treated the 25% number as a contest. They came charged up to scan their buns off.

    "What gets measured gets done."

  • I’ll be the contrarian and say no -- they aren’t critical. Of course, having data about what is going on is valuable, but I think that management often over-emphasizes hard data to the exclusion of critical characteristics of the business that may be difficult to measure. If employees are motivated entirely by specific measurements, then the result is usually to skew behavior so much toward the measurement that it doesn’t make business sense.

    In Doug’s example of challenging marketing staff to scan 25% of the conference attendee badges, what happens? Yes, you get more badges scanned. Does real business depend only on the number of leads? If a marketing person runs into someone who is a clear potential buyer for their product, will they use that valuable contact time to tell them about the company’s product or will they quickly abandon that prospect in order to scan the badges of a group of people who (for some reason) are clearly not potential customers of the product?

    In Amy’s blog, which was linked in the question, I was struck by the fact that she only seemed to care about measuring KPIs in order to justify the spending on the BPM project. To me that smacks of internal politics. The point of KPIs should be to measure what is going on in the business, so management can better understand what is happening. Often process applications do not just automate already existing business processes, but will also incorporate innovations in the way that they do business. It also often the case that the old way of doing things just wasn’t collecting the relevant data that would make it possible to get an apples-to-apples comparison between the old process and the new process.

  • KPIs are critical to BPM success. As the old management adage says, ‘You can’t manage what you don’t measure.’ Unless you define what success looks like and introduce metrics to monitor and track, how will you know if your organization is making progress towards the BPM goals? Identifying a few key metrics and better yet, tying those metrics to performance evaluations, keeps employees on track, engaged and working towards common objectives that align with your organizational strategy.

  • Absolutely. Business Process Management is about "managing" business processes so that you can continually improve your business. KPIs are a way to measure improvement. You can't improve what you can't measure.

  • This article resulted from my comment to another Ami's post.
    For me, the question isn't about whether KPI is a good thing - of course it is - but is it the number one thing? For example, what if you have to sacrifice either a KPI measurement or a project timeframe? We hit this choice all the time, especially at the pilot zone.
    There are number of cases where KPIs are irrelevant/not critical, e.g.:
    - if you are targeting the business transformation rather than gradual improvement then you'll know what to measure at the end of the project, not at the beginning
    - some managers trust their personal impressions more than figures knowing too well how the latter can be manipulated
    More arguments at http://mainthing.ru/item/284/

  • It all depends how the “Success? is measured. If the success criteria are to deploy BPM for process automation, visibility, and management, KPIs are not critical. However, if the success criterion of the deployment is to quantify and measure the business processes performance, KPIs are absolutely critical. My personal preference would be to separate BAM from BPM. KPIs are more relevant in a BAM implementation compare to a pure BPM deployment.

  • Do KPIs only come into existence as a result of BPM activity? Of course not, few businesses operate for long with no idea as to how they are performing. Mahbub makes a good point in that it is important to understand success criteria and how benefit is derived from activity in the first place, knowing how you intend to measure BPM success and expect to drive benefit from any activity helps to define meaningful measures that can support process improvement and motivational goals. The example of badge scanning may serve to motivate some but does it really work? is 26% better? Is 1% which leads to real business of more value? As with any target setting if you set bad targets you don't improve and can make matters worse - take health and education targets as examples - sure, what gets measured gets done, but are the results successful? How much organisational effort is wasted measuring pointless KPIs that add no real business value, yes they are critical, but only when they are meaningful.

  • Getting a little warm in here....

    I agree with Ian and Michael. If the metrics are set improperly and measure the wrong thing, then of course you will get what you ask for, which is the wrong thing.

    Setting the target as the number of badge scans reflected our event strategy to maximize the number of scans. You pay a lot of money and get one chance to stand on the floor and scan the badges. We then apply resources to qualify the leads. Get as many as you can and sort it out later.

    Is that the right strategy? It's an eternal debate. But, it's the one we've chosen so we had to pick the right metrics to drive the right behavior. Are all metrics chosen with this degree of deliberation? IME, no. Definitely a critical distinction.

  • Hi,

    Thanks very much for this comment. It help me to think about my ideals.

    Tks again and pls keep posting.

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    Just wondering what could be the possible success criteria for a BPM Pilot? KPIs may not be the sole criteria, because there may be larger issues like organizational impact, adaptability and many others that can tell you whether you can evangelize BPM in your organization or not even if your pilot scores in all your targeted KPIs. Any thoughts?

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