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October 30, 2012

8

Biz Study: BPM, Analytics Driving Business Outcomes

By Marie Lingblom

A new study from APQC underscores the importance of business process management, alignment of strategic objectives, and strong use of analytics among the best practices driving bottom line results.

APQC, a member-based nonprofit benchmarking organization, based its study on results from research focused on four organizations: Cargill Corn Milling, Delta Dental of Kansas, DM Petroleum Operations and Public Service Electric & Gas.
In releasing the results, Chris Gardener, director of performance improvement for APQC, said the study of these four organizations reveals measurement systems that truly impact business outcomes share several key attributes:

• Having a business process management center of excellence

• Ensuring a strong or very strong alignment of the organization’s measures with its strategic objectives

• Compensation and rewards that are linked to achieving targeted measures and results;

• A process to provide pertinent measurement data to the employees doing the work being measured

• A culture of accountability for measures and results

• A centralized group responsible for analytics

APQC notes in its report that choosing the correct performance measures can be difficult. Delta Dental of Kansas and DM Petroleum report they use customer feedback to help balance input. Feedback from external and internal customers, observes, APQC, helps identify and validate measures and define customer-centric metrics.

Should go without saying that having accurate data is essential. Cargill Corn Milling, Delta Dental of Kansas, DM Petroleum, and Public Service Electric & Gas appoint owners for their systems to ensure data accuracy. Clear accountability for performance measures is critical, finds APQC, because it leads to data accuracy, instills confidence in performance targets and creates one version of the truth for measurement.

One approach to help create an outstanding performance measurement system is to embed it into the planning process. All four organizations in APQC’s study say they identify and select measures as part of a formal, annual planning process.

And, as with any important initiative, performance measurement needs to align with broader strategic objectives. In this instance, all four organizations in the study use strategic alignment to guide their selection of performance measures.

Of course, if employees aren’t supportive at all levels of the organization, most measures will likely fail. APQC’s “Using Metrics that Drive Bottom Line Value” best practices study emphasizes that involving employees in the development of systems makes them more likely to understand and support them.

Cargill Corn Milling, Delta Dental of Kansas and DM Petroleum say they involve staff in the development of measurement systems, and are finding that has fostered a sense of ownership and buy-in across the board. Collaboration systems, they say, allow direct stakeholder feedback. A variety of techniques, meanwhile, such as measures as part of performance appraisals and rewards, foster accountability within an organization.

APQC’s study authors say results show that selecting the right metrics via focused planning and stakeholder involvement delivers a critical foundation for achieving value-driven business process management.

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