Version 1.0.

0 April 2011 1
KNOWLEDGE, I MPROVEMENT, AND CHANGE MANAGEMENT
DEFI NI TI ONS AND KEY MEASURES
THE FRAMEWORK FOR PROCESS IMPROVEMENT
Experience shows that benchmarkings potential to drive dramatic
improvement lies squarely in making out-of-the-box comparisons
and searching for insights not typically found within intra-industry
paradigms. To enable this type of benefcial benchmarking, the APQC
Process Classifcation Framework
SM
(PCF) serves as a high-level,
industry-neutral enterprise model that allows organizations to see
their activities from a cross-industry process viewpoint.
Originally created in 1992 by APQC and a group of members, the
framework has experienced more than a decade of creative use by
hundreds of organizations worldwide. The PCF is supported by APQCs
Open Standards Benchmarking research and an advisory council
of global industry leaders. The PCF will be continuously enhanced
as APQCs Open Standards Benchmarking team further develops
defnitions, processes, and measures related to process improvement.
Please visit APQCs Web site periodically for updates. The PCF is
available for organizations of all industries and sizes at no charge by
visiting www.apqc.org/pcf.
The PCF enables organizations to understand their inner workings
from a horizontal process viewpoint, rather than a vertical functional
viewpoint. The PCF does not list all processes within a specifc
organization, and every process listed in the framework is not present
in every organization.
HISTORY
The Process Classifcation Framework was originally envisioned as
a taxonomy of business processes. The initial design involved more
than 80 organizations with a strong interest in advancing the use of
benchmarking in the United States and worldwide. Since its inception,
the PCF has been updated a number of times to refect changes in the
way organizations do business.
In response to feedback from users of the PCF, APQC engaged
practitioners, consultants, and academics to develop defnitions based
on real-world experience with the processes. That collaborative effort
resulted in this document: a listing of processes with defnitions and
selected key performance indicators. The defnitions contained in this
document are to be considered in conjunction with the PCF. The content
in this document will be updated according to research performed by
APQC and subsequent updates to the PCF. This document was created
using PCF version 5.2.0.
12.0 Manage Knowledge, Improvement, and Change
2 Permission granted to photocopy for personal use. 2011 APQC
12.0 Knowledge, Improvement, and Change Management Defnitions and Key Measures TABLE OF CONTENTS
RIGHTS AND PERMISSIONS
2011 APQC. ALL RIGHTS RESERVED.
APQC encourages the wide distribution, discussion, and use of the PCF
for classifying and defning processes. APQC grants permission for
use and adaptation of the PCF for internal use. For external use, APQC
grants permission for publication, distribution, and use, provided that
proper copyright acknowledgment is made to APQC. No modifcations
to the look or content should be made in external venues.
Please use the following text when reusing the PCF in external
print or electronic content.
The PCF was developed by APQC and member companies as an open
standard to facilitate improvement through process management
and benchmarking regardless of industry, size, or geography. The PCF
organizes operating and management processes into 12 enterprise-
level categories, including process groups and over 1,500 processes
and associated activities. The PCF and its associated measures and
benchmarking surveys are available for download and completion at
no charge at www.apqc.org.
About APQC
For over 30 years, APQC has been on the leading edge of improving
performance and fostering innovation around the world. APQC works
with organizations across all industries to fnd practical, cost-effective
solutions to drive productivity and quality improvement. We are a
member-based nonproft currently serving more than 500 organizations
in all sectors of business, education, and government.
12.3 Develop enterprise-wide knowledge management
(KM) capability _______________________________6
Key Performance Indicators ____________________6
12.3.1 Develop KM strategy ____________________6
12.3.2 Assess knowledge management capabilities __7
12.3.3 Identify and plan KM projects _____________7
12.3.4 Design and launch KM projects ____________7
12.3.5 Manage the KM project life cycle ___________8
12.4 Manage change _______________________________8
Key Performance Indicators ____________________8
12.4.1 Plan for change _________________________8
12.4.2 Design the change ______________________8
12.4.3 Implement change _______________________9
12.4.4 Sustain improvement ____________________9
12.1 Create and manage organizational
performance strategy __________________________ 3
Key Performance Indicators _____________________ 3
12.1.1 Create enterprise measurement
systems model __________________________ 3
12.1.2 Measure process productivity _____________ 3
12.1.3 Measure cost effectiveness _______________ 4
12.1.4 Measure staff effciency __________________ 4
12.1.5 Measure cycle time ______________________ 4
12.2 Benchmark performance _______________________ 5
Key Performance Indicators _____________________ 5
12.2.1 Conduct performance assessments _________ 5
12.2.2 Develop benchmarking capabilities _________ 5
12.2.3 Conduct process benchmarking ___________ 5
12.2.4 Conduct competitive benchmarking ________ 5
12.2.5 Conduct gap analysis to understand need
for change and degree needed _____________ 6
12.2.6 Establish need for change _________________6
Version 1.0.0 April 2011 3
12.1.1 Create enterprise measurement systems model (11075)
The Create enterprise measurement systems model process refers to the development of a high-level measurement
system to track performance across the enterprise or in specifc functions or business units. In this process, organizations
determine which processes to measure, which measures to use, how often to measure, and what the target measurement
results should be. Decision makers usually also defne which actions will be taken given certain measurement results. This
process does not refer to actual measurement activities or consequential actions; it focuses on strategic decisions about
how to best measure an organization. Because measures should be revisited and realigned with organizational goals as
time passes, this process should repeat on a regular basis as a review.
12.1 Create and manage organizational performance strategy (11071)
Total cost to create and manage organizational performance
strategy per $1,000 revenue
Total full-time employees (FTEs) to create and manage
organizational performance strategy per $1 billion revenue
12.1.2 Measure process productivity (11076)
The Measure process productivity process includes all activities associated with measuring how productive processes
are. This process will vary depending on which activities and business components are being measured. Unlike process
12.1.4 Measure staff efciency, process 12.1.2 measures outcomes (e.g., how much of X is produced within X time period).
A manufacturing process may be measured according to number of units produced per FTE or number of high-quality
units produced. A marketing department might be measured on the completion of a target number of campaigns per
marketing FTE. Some organizations choose to include measurement analysis in this process. Actions taken based on the
measurement typically exist as activities within process group 12.4 Manage change or within the other function-specifc
categories. (For example, if measures indicate that inventory levels need to be better optimized, the resulting actions
would take place under the process 4.5.3 Operate warehousing.)
This process group encompasses those processes required to develop a strategy for monitoring and improving the performance of
an organization. Although this process group is related to process group 1.2 Develop business strategy, 12.1 Create and manage
organizational performance strategy focuses more on internal performance rather than external or competitive positions in the
marketplace. Process group 12.1 centers around measurement, including the creation of measures and the act of measuring itself.
This is the measurement of internal performance within a strategy for tracking, streamlining, and improving it.
Activity 1.2.2.6 Develop lean/continuous improvement strategy also relates to these activities but is more typically used when executives
are developing a business strategy to enhance external market position. 1.2.2.6 focuses on high-level strategy development, whereas
12.1 encompasses the tactical measurement of internal processes and work force improvement.
The measurement processes in process group 12.1 should align with human capital management processes such as 6.6.5 Develop and
Manage Employee Metrics. Process 6.6.5 and other human capital management processes refer to the overall management of employee
information and the use of metrics to guide employee development and rewards. Process group 12.1 refers to the collection of the data
and the strategies employed to gather it. It does not refer to the day-to-day activities of human capital managers, but instead to the
development of strategies and systems that allow human resources to more effectively manage personnel. Process group 12.1 also
includes the measurement of machines, entire processes, facility and environmental effciency, overall cost effectiveness, and other
activities not directly related to human performance.
Key Performance Indicators:
4 Permission granted to photocopy for personal use. 2011 APQC
( 12.1 Create and manage organizational performance strategy continued )
12.1.3 Measure cost effectiveness (11077)
The Measure cost effectiveness process covers all activities associated with measuring the cost effectiveness of
a process. This process will vary depending on which activities and business components are being measured. An
organization may want to track its return on investing in activities like marketing campaigns, new equipment, and process
redefnition. It may also measure cost per employee or cost per cycle for a given process, function, or business unit. Some
organizations choose to include measurement analysis in this process. Actions taken based on the measurement typically
exist as activities within process group 12.4 Manage change or within the other function-specifc categories. (For example,
if measures indicate that inventory levels need to be better optimized to reduce costs, the resulting actions would take
place under the process 4.5.3 Operate warehousing.)
12.1.4 Measure staff effciency (11078)
The Measure staff efciency process covers all activities associated with measuring how effciently employees perform.
This process will vary depending on which activities and business components are being measured. This process often
focuses on measuring activities performed manually or compares manual completion with completion aided by automation.
These measures can help determine where automation could increase effciency or identify differences between the
effciency of one employee or group and another. This process could also include an evaluation of the quality of work,
which could potentially reduce or increase the amount of automation or review included in the process.
This process, unlike process 12.1.2 Measure process productivity, does not measure outputs of a process. Instead, it
measures the agility and speed of the activities that lead to a fnal product. Some organizations choose to include
measurement analysis in this process. Actions taken based on the measurement typically exist as activities within process
group 12.4 Manage change or within the other function-specifc categories. (For example, if measures indicate that
the invoicing cycle is too long or has redundant steps, the resulting actions would take place within process 8.2.2
Invoice customer.)
12.1.5 Measure cycle time (11079)
The Measure cycle time process includes all activities associated with measuring how long it takes to perform certain
processes or cycles of action. This process will vary depending on which activities and business components are being
measured. Organizations typically include the measurement of cycles like customer response time, invoicing, or order-to-
cash under this process. Some organizations choose to include measurement analysis in this process. Actions taken based
on the measurement typically exist as activities within process group 12.4 Manage change or within the other function-
specifc categories. (For example, if measures indicate that the invoicing cycle is taking too long or is inconsistent, the
resulting actions would take place within process 8.2.2 Invoice customer.)
Version 1.0.0 April 2011 5
12.2.1 Conduct performance assessments (11083)
In order to benchmark, an organization must frst examine its own performance. The Conduct performance assessments
process includes activities related to measuring, researching, and recording the performance of people, processes,
mechanisms, or other areas of the business that the organization wants to benchmark or track. Usually, these assessments
are performed on a regular cycle to monitor long-term performance. But this can also refer to an in-depth pre-
benchmarking exercise to look at specifc process that might not be regularly assessed.
Total cost to benchmark performance per $1,000 revenue Total FTEs to benchmark performance per $1 billion revenue
12.2 Benchmark performance (11072)
Process group 12.2 Benchmark performance encompasses all the processes required to compare organizational performance internally
or externally with other organizations. Some organizations run benchmarking through a central group or department. In other cases,
benchmarking takes place as part of a specifc project or within a particular department that sees the need to compare its performance
with other departments or organizations.
Key Performance Indicators:
12.2.2 Develop benchmarking capabilities (11084)
The Develop benchmarking capabilities process refers to tasks associated with increasing an organizations ability to
compare its performance internally or externally or maintain benchmarking relationships with other organizations. This can
include training staff in benchmarking, developing technological solutions or other materials to aid benchmarking efforts,
or consulting with external entities to gain knowledge or tools to help benchmark.
12.2.3 Conduct process benchmarking (11085)
The Conduct process benchmarking process includes the activities required to benchmark a given process. This process
differs from 12.2.4 Conduct competitive benchmarking in that it focuses on more qualitative measures of performance in
the marketplace rather than strict process performance. Competitive benchmarking is concerned with the organizations
position and perception in the marketplace relative to peers. Process benchmarking concentrates on improving internal
behaviors and outcomes to perform more effciently or with higher levels of quality. Changes made as a result of process
benchmarking may ultimately affect the competitive factors at play in process 12.2.4, but process 12.2.3 focuses on
internal improvement through comparison with either internal departments or other organizations and how they perform
similar processes. During this process, an organization determines which departments or organizations to benchmark
performance against and which specifc metrics and activities to concentrate on. It will also actually measure and execute
the comparison during this process.
12.2.4 Conduct competitive benchmarking (11086)
The Conduct competitive benchmarking process includes the activities required to benchmark an organizations market
position, competitive position, external image, customer perception, or other organizational characteristic. This process
differs from 12.2.3 Conduct process benchmarking in that competitive benchmarking addresses the attributes or
perceptions of an organization rather than physical or generally quantifable performance. Competitive benchmarking tends
to focus on more qualitative elements of the organization and marketplace factors. During this process, an organization
will determine which departments or organizations to benchmark performance against and which specifc metrics and
activities to concentrate on. It will also actually measure and execute the comparison during this process.
6 Permission granted to photocopy for personal use. 2011 APQC
( 12.2 Benchmark performance continued )
12.2.5 Conduct gap analysis to understand need for change and degree needed (11087)
In the Conduct gap analysis to understand need for change and degree needed process, the organization examines its
performance against that of the benchmarked organizations or entities. It notes the differences between organizational
performance and that of the benchmarked standard and studies those differences to identify what specifc changes need
to be made. The organization determines how much its performance needs to change to meet expectations and help the
organization reach its strategic goals.

12.3 Develop enterprise-wide knowledge management (KM)
capability (11073)
This process group comprises processes associated with knowledge fow within an organization (e.g., create, identify, collect, review,
share, access, and use knowledge). At its heart, knowledge is information in action. Knowledge management (KM) is a systematic
process that enables information and knowledge to grow, fow, and create value. The KM discipline is about connecting people to
the information and expertise they need to achieve business results. Various approaches can be used to support this goal, including
content management, communities of practice, transfer of best practices, lessons learned, expertise location, virtual collaboration,
and social computing.
The specifc KM approaches that an organization pursues are determined by the business problems it wants to address. For example,
if an organization is seeing similar mistakes repeated across business units, it may implement a lessons learned process so that
employees can learn what has and hasnt worked in other parts of the business. Similarly, an organization that is concerned about
knowledge loss due to retirement may consider interviewing senior-level employees who are nearing retirement and making their
expertise accessible through documents or videos.
Although technology plays a role in KM, it is critical to implement technology as part of a larger, systematic change initiative. The
introduction of new tools will not change behavior unless people understand when, how, and why to share knowledge and are
incentivized to do so.
Key Performance Indicators:
Total cost of knowledge management per employee
Total number of participants in KM approaches per knowledge
management FTE
Number of FTEs for the KM program per $1,000 revenue
Number of unique participants as a percentage of total
potential participants
12.2.6 Establish need for change (11088)
The Establish need for change process includes all the activities involved in reporting the benchmarking results and
formulating a list or report of the organizational processes, characteristics, mindsets, activities, or technologies that need
to change. The fnal outcomes of this process will typically lead the organization to continue on to process group 12.4
Manage change, where the determined changes are actually implemented.
12.3.1 Develop KM strategy (11095)
The Develop KM strategy process includes activities related to establishing an enterprise KM program. A KM program
is an organization-wide effort to standardize and excel in KM. The frst set of activities relates to logistics such as
governance, roles, and funding. An organization with a clear business case for KM is in a better position to select an
appropriate governance model. For example, a program focused on expertise location might need ties to the HR function,
whereas a program focused on content management might be better housed in the IT function. Funding is also impacted
by the business case, but most organizations use a combination of corporate and business-unit funding for KM.

The second set of activities relates to linking KM to business objectives and managing KM-related change. Again, the
specifc tactics involved will depend on the business problems that KM is intended to solve, as well as the current culture
and its receptiveness to KM. Note that processes 12.3.1 and 12.3.4 both contain activities related to technology needs,
training, communication, and change management. The difference is that the activities in the Develop KM strategy process
relate to the KM program as a whole, as opposed to specifc KM approaches.
Version 1.0.0 April 2011 7
12.3.2 Assess knowledge management capabilities (11096)
Before improving how it manages knowledge, an organization must evaluate its current KM processes and practices. The
Assess knowledge management capabilities process includes activities for determining exactly where an organization
stands on the KM learning curve, pinpointing gaps, and identifying KM approaches and tactics that will have meaningful
impact on strategic objectives. For organizations that struggle with this process, frameworks like APQCs KM Capability
Assessment Tool provide standard structures for measuring KM maturity and identifying performance gaps.
Key Performance Indicators:
12.3.3 Identify and plan KM projects (11097)
The activities in this process involve taking the analysis performed in process 12.3.2 Assess knowledge management
capabilities and applying it to make targeted improvements in the way an organization handles its collective knowledge.
Once an organization selects the areas of the business it wants to focus on, it must lay out a comprehensive plan: What KM
approaches should it implement? What is the audience, and what special efforts will be required to encourage engagement
and participation? How much funding is needed, where will it come from, and how will success be measured? Articulating
answers to these questions early in the process will ensure that the KM initiative remains focused and positioned to effect
positive change.
12.3.4 Design and launch KM projects (11098)
This process involves implementing the blueprint created during process 12.3.3 Identify and plan KM projects. Most of the
activities relate to the logistics of implementing a new tactic or approach: What process changes are needed? Who is
responsible for what, and where does ultimate accountability lie? What new tools must be deployed, and how will the IT
infrastructure be impacted? And fnally, what steps can the organization take to motivate employees to embrace the new
processes and tools? Often, organizations will test new KM approaches with a pilot group and then use feedback to fne-
tune the tools and processes before the broader enterprise rollout.
Key Performance Indicators:
Communities of Practice
Transfer of Best Practices/Lessons Learned
Number of KM FTEs per total KM investment
Number of KM FTEs per cost of KM capability
Annual maturity assessment of KM capability
Total cost of communities of practice
Total cost of communities of practice per community
participant
Number of communities of practice
Community of practice participation
Number of participants per community of practice event
Total cost of best practices transfer processes
Total cost of after-action reviews
Total cost of lessons learned processes
Total cost of expertise locator systems
Total cost of content management systems
Total cost of virtual collaboration
( 12.3 Develop enterprise-wide KM capability continued )
8 Permission granted to photocopy for personal use. 2011 APQC
( 12.3 Develop enterprise-wide KM capability continued )
12.3.5 Manage the KM project life cycle (11099)
The Manage the KM project life cycle process includes activities related to the ongoing maintenance of the KM program.
Sometimes, organizations roll out KM tools and approaches with a big splash only to see rates drop once the initial energy
dissipates. If an organization wants employees to integrate KM activities into their daily work, it must demonstrate a
consistent, ongoing commitment to KM. This involves evaluating the KM approaches on at least an annual basis, analyzing
the data to determine whats working and what isnt, and making strategic adjustments to ensure that KM remains aligned
with the organizations business goals.
12.4 Manage change (11074)
This process group includes all processes involved in implementing and facilitating major changes throughout an organization or in
a selected unit, department, division, etc. The needed changes are typically identifed in process groups 12.1 Create and manage
organizational performance strategy, 12.2 Benchmark performance, or 1.3 Manage strategic initiatives. Process group 12.4 Manage
change deals with the activities necessary to plan, develop, implement, and monitor those changes. These are often project-related
processes for activities that may have a set start and end date. However, activities in process 12.4.4 Sustain improvement may continue
periodically well into the future. In some organizations, monitoring and sustaining improvement takes place within the other process
categories specifc to the area of the business where the change occurred, and those organizations track change-related processes in
those appropriate categories.
Key Performance Indicators:
Total cost to create change management strategy per
$1,000 revenue
Total FTEs to create change management strategy per
$1 billion revenue
12.4.1 Plan for change (11134)
The Plan for change process involves all processes, from selecting the methodology for implementation to identifying
stakeholders, resources, and preliminary measures. It also includes the identifcation of any barriers to the change and the
formation of the team who will implement the change. Although the change methodology is selected in this process,
the change itself is not extensively designed until process 12.4.2 Design the change. 12.4.1 is a planning and foundation-
laying process.
12.4.2 Design the change (11135)
During the Design the change process, the change team aligns the change with other activities already in place or planned
for the organization. It develops specifc training and implementation plans, including communication schedules, new role
assignments, and budgets.
Version 1.0.0 April 2011 9
12.4.3 Implement change (11136)
In the Implement change process, organizations embed the new processes, systems, or other changes into the business.
During this process, training is administered; stakeholders are consulted; and new documents, policies, processes, and
technologies go into effect. Processes to continuously measure the change also begin, but measurement activities are
typically tracked within the processes under process group 12.1 Create and manage organizational performance strategy.
12.4.4 Sustain improvement (11137)
The Sustain improvement process encompasses the tracking of changes made to the business and the general monitoring
and maintenance of performance related to the change. This process includes post-improvement project activities, like
debriefngs where lessons learned during the change are shared and recorded. These processes may be revisited regularly
to monitor performance, but these regular processes may eventually be tracked as part of continuous organizational
processes under process group 12.1 Create and manage organizational performance strategy.
( 12.4 Manage change continued )
123 North Post Oak Lane, Third Floor
Houston, Texas 77024-7797
800-776-9676 phone +1-713-681-4020 +1-713-681-8578 fax
pcf_feedback@apqc.org www.apqc.org