A Short Note on Performance Measures, or

Measuring Processes

Imagine ...

  • you are a runner in a relay. Would you expect your performance to be judged by the achievement of the runner who followed you?
  • you had designed a building. Would you want your reward to be based on the competency of the builder to turn your design into reality?
  • you are an invoice clerk in a company. How would you feel if your salary was based on the speed of payment of customers?

I expect that in each case you would feel pretty hard done by. You would protest that you had done your job and it was unfair to judge you on the competency of others, on activities which were related to your job but over which you had no control or even influence (unless you made a hash of a baton handover I suppose).

So why do so many aspiring Business Analysis apply similarly incorrect measure to processes? Why, when asked to suggest a performance measure for a process, do they give a measure of a downstream process? Why is there such seeming confusion about performance measures?

In an attempt to answer this let’s go back to basics. All processes are supposed to achieve something. It does not matter whether we are talking of a complete organisation, a business process, or a process, all are established in order to produce a desired outcome. That is the fundamental basis on which business analysis sits.

If processes are to produce an outcome then it should come as no surprise that there must be a measure of how “well” the outcome is created. It seems self-evident that such a measure has to be based on the process under consideration and not on something else, yet this is where it starts to go wrong for so many BAs.

Take the simple example of an invoice clerk. When the example involves people, such as here, there is rarely disagreement that a measure based on payment is inappropriate, not to say, wrong. But, make the production of invoices into an automated process and things change.

People suggest ‘speed of payment’ or ‘number of defaulters’, yet these are no more relevant to the performance of invoicing as an automated process than they would be to it as a manual process.

This is a frequent error made by exam candidates. For some reason they propose measures which are way beyondthe scope of a process. Somehow their focus is wrong - perhaps they looking for something clever in the question. They should realise that there is never an attempt to be clever with exam questions!

So how do we focus on what is appropriate and relevant?

Well, remember that every process in a business system produces an outcome, an output if you will. This may be the creation of a flow, (a communication or transaction) leaving the scope of the business system, or may be an update of a file or files. If the achievement of this outcome is the purpose of the process then the measure of the success of the process should be a measure of how well that outcome is produced. Is its production quick enough? Is it accurate? Is it timely? Is it complete? Questions which may appear almost simplistic, yet they are exactly how I would judge an invoice clerk!

Can we generalise from this? Of course we can.

To define the performance measure look at the outcome required or expected of the process and ask ‘how should we judge the efficiency and effectiveness of the production of this outcome?’ If all else fails ask how you would know that it wasn't working well or to the correct level. (This is a standard example of reversal thinking.)

If we add efficacy to the question then we have Peter Checkland’s monitoring and control parameters.

Isn’t it strange how everything comes down to such simple ideas, which turn out to be remarkably powerful.

And finally ...

These ideas and more are addressed in our Modelling Business Processes course.

You might also gain from reading the book shown. This includes some interesting ideas on processes.