I want to make a special case tonight for the reasoned approach to Key Performance Indicators (KPIs) that involves what happens before, during and after your process. This field (business process management and analysis (and on and on with the jargon)) makes the very most sense when we stop seeing processes as discrete “events” much the same way we advocate for “seeing” tasks in relation to one another when strung together to form a process. That was a mouthful but I hope you get the point. The more holistically we see these phenomena unfolding, the better we can manage them.
We’ve Seen This Movie Before
This is rather basic no matter how “new age” it might still sound to some people. My process can be viewed and considered in relation to the process prior (which constitutes the “triggering event” and the processes immediately following it. We’ve approached the physical sciences in this fashion for a pretty long time and it works very well. Smaller phenomena are nested inside larger phenomena. They are included in yet transcended by larger phenomena. It also helps to understand that the larger has more inherent value than the sum of its smaller parts.
By studying my triggering events and measuring them accordingly, I inform the process I am analyzing. By measuring what happens downstream, I similarly inform my analysis. Suddenly, if I have metrics for Input and Output that tell me something important which translates in favor of my goals and objectives, I will know precisely how to calibrate my process in terms of its productivity, efficiency, quality, volume, throughput and so on.
I know this is going to sound remedial to some of you and I also know that others will find this concept and practice confusing. The best I can do is point you in the direction of BPMS solutions that include simulators. There are also simulation engines from ProModel that are very good.
Simulation allows you tweak your Inputs and imagine what your Outputs will look like under different conditions. This is a practice that involves rigor and discipline. Everybody around you will find it boring. That is, until you point out the impact a process design change can have on suppliers at the point of Input or the impact on customers at Output. There are top-line sales and bottom-line inventory considerations here so do make sure your teams understand that it isn’t enough to see tasks strung together as processes but they must also see processes strung together – end-to-end – to form your entire enterprise. From this vantage point, you will all make your best business decisions and manage your risks effectively along the way.
Key A Good Fit
One final note relating to the title of this post: this practice of looking downstream and upstream for metrics is what makes your measures “key”. They describe critical indicators at critical junctures. If I screw up upstream, you can bet it will ripple through your process and screw things up downstream. One critical “key” performance indicator depends on others in its “ecosystem”. Again, I know it sounds a little cheeky for some of you but others of need to keep your eyes on all of these variables throughout your analysis. This is how you manage Unintended Consequences.
Do you have any horror stories you’d like to share? Any unintended consequences in making radical process changes? We’d love to hear from you.