If you were to measure Key Performance Indicators (KPI)s for Business Processes, what would you measure? A Proper Framework approach ensures that you balance Efficiency Metrics with Effectiveness Metrics and also, you make it as comprehensive a set of metrics as possible.
Efficiency Metrics (How well are you doing things?) and Effectiveness Metrics (How well are you doing the Right Things?). Sometimes Efficiency Metrics go hand in had with Effectiveness Metrics and many times not.
In an Insurance Claims Settlement process, settling the claim qucikly achieves the Turn-Around Time (TAT) Efficiency Metric, customers are also very happy increasing the Customer Satisfaction Index (CSAT) Index, an Effectiveness Metric.
On the other hand, if the business process is Customer Support on the phone, the Efficiency Metric may ba Average Handle Time (AHT). Companies may try to keep this metric within a certain range. However, keeping calls shorter may affect the Customer Satisfaction Index (CSAT) metric the opposite way. Getting off the phone quickly withour resolving the problem fully will only make the customers less happy! In this case, the Efficiency Metric and Effectiveness metric may be oppoed to each other!
Here's a framework for determining what metrics may be of use for any business process. The framework can be quite comprehensive when considered under three main groups - People, Process and Techniology.
People Metrics are important, especillay in business processes where there is an inordinate proportion of manual activities - Like for for example Insurance Underwriting of Commercial Properties for eacmple. People metrics become even more important when business processes are outsourced.
Technology Metrics are also important, especially business processes that involve computer systems and application software. When customers can apply for Insurance online or file claims online or pay their annual road tax at the local Department of Motor Vehicles, availability of servers and response time become important metrics that may need to be monitored.
Process Metrics are the biggest group - They contain an equal number of Efficiency and Effectiveness Metrics.
A Framework approach to thinking about Business Process Metrics makes sure that you measure an as comprehensive set of metrics as possible.
This will also enable someone to include metrics that are complementary to each other as well those that are in conflict with each other.
It is the framework which changes with each new technology and not just the picture within the frame. - Marshall McLuhan
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