9/1/2017 Using APQC Metrics | Claude Lanouette – CBPA

Claude Lanouette – CBPA

02 MEASURE

Using APQC Metrics

2015/04/07 | CLAUDE LANOUETTE | LAISSER UN COMMENTAIRE

As we explained in the article Measure Before Deciding
(h ps://claudelanoue e.com/2015/03/27/measure-before-deciding/), it is essential to measure the
effectiveness of a process during a modeling exercise.

But why should one start from scratch? The APQC Process Classification Framework (PCF) provides
practical metrics for each activity, within a process or a workflow, throughout their four level of
classification. Basically, for more than 1,200 activities, the list of metrics offers around 1,700 metrics
(formulas). It is a great starting point, instead of tinkering randomly. This is an immediate incentive
to download it (1).

Starting from this, you can quickly earn value from your measurement exercise, when stakeholders
want to quickly evaluate the process efficiency or the productivity of resources.

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Simple Rules – by Claude Lanoue e (c)

Be forward looking

Even if this exercise does not appear as something to do on the first run of your modeling workshop,
the suggested metrics shown below take into account the income of the business entity and the value
of materials purchased, in the case of the Purchase Order process for example. This provides a
different perspective, depending on the volume of business of the company.

If the enterprise has an annual revenue of $ 20 million and carries 11,700 PO per year, it is a very
different challenge for a company that has an income of $ 200 million.

Also note that one can also evaluate the process according to a group of higher processes; in this case,
one may wonder what percentage of the time is dedicated to fulfill Purchase Orders on the overall
procurement process (line 101455).

PCF Metrics example (click for details)

This table enumerates different metrics that could be used to explore financial perspectives that were
not part of our original calculation model. These are the suggested metrics for the 4.2.3 Order
material and services, from the previous article.

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Going further : Process performance measurement

Measuring a process can be considered as a benchmarking activity, either by providing data for the
current state or for the desired state. The previous articles focused on the process costs itself,
including the duration of the activities and the cost of the resources involved in the execution.

Process benchmarking can also be used for process control or for process performance monitoring,
and as suggested by the ABPMP (2). The process performance management is also a business activity
when it is time to implement a business process management discipline within an enterprise. We will
come back later on that specific topic.

Ge ing lost into figures

As you saw in this series of articles, we could lose the focus of our audience while measuring, given
the variety of data that can be put on the table to obtain a be er understanding of the business
processes and their related workflows in different business units.

At the beginning of this exercice, we looked at the process itself to evaluate its costs and eventually
evaluate how it could be streamlined to bring some savings and gain efficiency.

Furthermore, if we want to set some goals

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Furthermore, if we want to set some goals and some standards to a ain and maintain, the
measurement will need to be refined not only for the process itself, but also for quality, cycle time,
delays or errors, likely to control the process.

Thus, we will need to define the goals of measurements, the things to measure, against what we will
measure, where we will measure and who will be responsible to measure.

We will have to keep this in mind :

– The measurement itself is directly related to the quantification of data including in an accepted
standard and quality (accuracy, completeness, consistency and timeliness).

– The metric is a quantitative measure that a system, component, or process has a given a ribute.
Metric represent an extrapolation or a mathematical calculation of measurements resulting in a
derived value. The APQC PCF metrics act as such, by suggesting a good set of measures that are
adding value to the understanding of the processes and the workflow.

– Finally, the indicators would be a representation of a measurement or a metric represented in a

simple or intuitive way, to facilitate its interpretations against some goals when it is time to address
performance or quality issue. The common green, yellow or red flags are a common example of
measures set against a standard to reach.

In the next article, we will discuss about process simulation, to allow you to surprise your PMO, your
CIO or you CFO.

Reference :

(2) The ABPMP (h p://www.abpmp.org) (Association of Business Process Management

Professionals) provides a framework for a comprehensive business process management practice and
for process performance measurement practices,

(1) The APQC Process Classification Framework (h p://www.apqc.org/pcf) is used worldwide to

provide industry standard benchmarks, and members can gain access to benchmarking results when
it is time to compare with other companies in a similar business activity sector.

Publicités

APQC BENCHMARKING PCF

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