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What do the prices of exotic vegetables say about your BPM initiative?

Blog: Application Platform Strategies

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Blogger: Richard Watson

How do I know my BPM program is improving my business?  How do we know if conditions are improving in Afghanistan? In each case, there is only one way: You measure the right things.

If you are a regular reader, you’ll know I’m not only interested in business processes, but I also have an interest in foreign affairs, especially in the conflict in Afghanistan. In a series of articles [1] for Foreign Policy, Thomas Ricks discusses a paper by counter-insurgency expert David Kilcullen which looks at metrics in counter-insurgency campaigns. When Ricks quoted Kilcullen discussing non-obvious metrics, such as “Transportation prices” and “Prices of exotic vegetables” this made the connection to the BPM field research findings I am documenting [2]:

“… to understand this weird [metric], you need to understand local conditions. What people are paying for vegetables grown outside their district is a quick indicator of road security. Trucking companies factor in the risks they face, as well as the cost of bribes and other forms of corruption. So variations over time may be a helpful indicator of trends in public perception of security conditions and the corruption level of government security forces.”

The example of imported vegetable prices is a metric that may not be obvious but is having a real effect on the local people, and is connected to the outcome required from the counter-insurgency. Safe passage to and from markets is an indicator of commerce returning which heralds a return to normality for local people. Taliban insurgency will be sidelined by normality.

MAIDEN SHAHR, Afghanistan--A fruit and vegetable vendor sits outside his store in the Wardak Province central market on Dec. 9, 2008. ISAF photo by U.S. Navy Petty Officer 2nd Class Aramis X. Ramirez (RELEASED) ISAF photo by U.S. Navy Petty Officer 2nd Class Aramis X. Ramirez.

What not to Measure

The key thing about those counterinsurgency metrics is that they facilitate tracing a line from the desired outcomes to measurements. The greatest challenge for BPM is that organizations have difficulty clearly articulating the value they derive from it. One key finding of the study is that participants find it hard to recognize, measure, and sell successes, indicating a lack of metrics aligned with business outcomes. One participant told us: 

“Management is not asking for any BPM metrics – for them – ‘gut rules’.”

The table below highlights the difference between metrics that are connected to business outcomes and those that are unconnected.

Metric connected to outcome

Indicators and outcomes

Metric unconnected to outcome

Indicators and outcomes

(Counter-insurgency)

Price of exotic vegetables in Afghan markets

Indicator: road security Outcome: commerce and normality returns, terrorism is sidelined.

Enemy fatalities

None

(Business Processes)

Customer satisfaction

Indicator: customer loyalty/retention

Outcome: increased revenue per customer

1000 processes automated by 2011.

None

Increasing the number of automated processes is a success metric pursued by one of the BPM teams we spoke to. It is a good metric by most “SMART” standards. We are always told to aim for these criteria: it is (s)pecific: an increase of 1000; it is (m)easureable; it is (a)mbitious but (a)chievable: if the IT department is given the budget and sponsorship to do it; it is (t)ime-bound: by the end of 2011, but it is not (r)elevant or (r)esults-oriented because it is not connected to a business outcome.

Similarly, Ricks discusses bad metrics, such as enemy fatalities. ‘Body count’ is a SMART, but short sighted metric. As Ricks, reporting Kilcullen, says, “when you have 100 enemies and kill 20 of them, you may wind up with 120 live enemies, because you just created 40 more. It’s more algebra than arithmetic.”

One BPM field research study interviewee started their BPM effort by asking their customers what they need to complete a process and how they define “good service”. Starting process analysis with the business outcome desired is a rare, but welcome approach. The majority of BPM teams we spoke to had strategic aspirations for their initiatives, but could only quote tactical success metrics.

Breaking Through to Strategic Wins

The reason Anne Thomas Manes published the blog posting “SOA is dead; long live services” in January 2009 was to highlight that SOA initiatives Burton Group studied were failing to articulate and deliver business value beyond “doing SOA”. Many people think the implicit benefit of BPM is that you can “do BPM”. The inability of a majority of participants in the study to articulate business value they derive from their BPM efforts is a concern for the viability of those efforts. Metrics should very clearly articulate the value of BPM. The counter-insurgency metrics are not just interesting indicators, as Economist blogger Free exchange says:

“these metrics strike me as more likely than to encourage the right strategic thinking. Asking yourself the question, “How do we reduce transportation prices,” is more likely to produce strategy leading to a better Afghan outcome than asking, “How do we minimise coalition deaths?” And it may well actually minimise coalition deaths.”

Encouraging that kind of strategic thinking is the source of richest value of BPM. In the field research study, the claim that one interviewee’s BPM program “is adding value by breaking through assumptions and seeing what people do to add value” is the closest any of the participants came to sharing a lasting strategic result of their efforts, in this case a changed organizational mindset. 

This mirrors the current thinking of some foreign policy analysts. Writing in the Financial Times today about the need to focus on a better outcome from the latest “surge” in Afghanistan, Philip Stephens [3] says

“Operation Moshtarak carries the risk that tactical gains will be mistaken for strategic success. This is not the time to go deeper into Afghanistan. Rather it is the moment to think harder about withdrawal.”

Our customer-focused BPM interviewee expressed this business optimization sentiment another way, 

“Sometimes we need to sub-optimize individual processes to improve the business overall.”

[1] Thomas E. Ricks. Foreign Policy. Published 8-9 Feb 2010. Accessed online 16 Feb 2010.

http://ricks.foreignpolicy.com/posts/2010/02/08/kilcullen_i_here_s_what_not_to_measure_in_a_coin_campaign

http://ricks.foreignpolicy.com/posts/2010/02/09/kilcullen_ii_how_to_tell_the_effect_of_your_operations_on_the_population

http://ricks.foreignpolicy.com/posts/2010/02/09/kilcullen_iii_how_to_take_the_measure_of_an_afghan_official

[2] The findings of the BPM Field research study will be presented in Prague, April 19-22 at Burton Group’s Catalyst Conference.  The first 3 parts of the 6 part series of field research findings will also be published (for Burton Group clients) in April:

[3] Philip Stephens. “Britain needs an Afghan exit strategy“. Financial Times. Published 16 Feb, 2010. 

http://www.ft.com/cms/s/0/dc5e92f8-1a66-11df-a2e3-00144feab49a.html

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