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Key Performance Indicators for BPM

Blog: BPM Leader

Let’s recap BPM’s main steps that we introduced in a previous blogpost:

  1. Process modelling
  2. Process automation
  3. Process analysis using key performance indicators (KPIs)
  4. Process optimization

This post is entirely dedicated to the third step: key performance indicators (or KPIs) for BPM.

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Analyzing process performance consists of:

The analysis of processes is a major (but often forgotten) step in business process management, since it provides objective information (instead of personal perceptions) that helps identifying improvement opportunities within the organization.

Long-term KPIs

This kind of indicator uses a larger time frame (typically one year or six months back). Long-term KPIs are usually based on Business Intelligence (BI) Technology, which provides several advantages. For example, the user can generate his/her own reports, browse through the information, slice and dice the data, export it and ultimately analyze it as needed.

Typical examples of long-term KPIs for BPM are:

Short-term KPIs

These indicators provide a short-term analysis (typically go as far as one minute, hour or day back). That’s why they are also called “real time indicators”.

The information provided by these indicators tends to be based on Business Activity Monitoring (BAM) Technology and displayed in a Balanced Scorecard BSC. In addition, these tools let us set alerts so that when an indicator exceeds the predefined deadlines, the user knows it’s time to take some action.

Typical examples of short-term KPIs for BPM are:

Combining key performance indicators

Usually a single indicator doesn’t provide enough information for decision-making, and it’s necessary to compare it to others. This further analysis can prove or disprove the hypothesis derived from the first indicator.

Example: if an indicator shows that the total time required to complete a process is longer than the one established, we might think that our team’s productivity is low because our employees don’t work as fast as expected. However, this indicator should be complemented with the number of instances created. If we discover that there are too many instances, the real cause of the delay is clearly not the level of productivity.

In general, the indicators always provide partial information, which reflects situations that may be relevant and important to detect early. But before drawing any conclusions we should complement the results with other KPIs.

You can’t optimize what you can’t measure

Key performance indicators (KPIs) are essential to measure and subsequently improve business processes in an organization. It is crucial for a BPM suite (BPMS) to provide tools that automatically measure these indicators. Plus, the information must be displayed in an intuitive and simple way. Before jumping to conclusions don’t forget to compare results with other indicators to prove (or disprove) the initial hypotheses.

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