68 Scaling BPM Adoption from Project to Program with IBM Business Process Manager
3.4.3 Defining the business case
During process discovery you will continue to improve and refine the business
case started during initial assessment. The business case will be important to
justify the continued investment in analysis and the transition to plan and charter
a BPM project, implement a process application, and deploy a first release of the
business process application.
Establishing critical success factors
Your business case describes the critical success factors for the project including
sensitivity to time, cost, and scope. In a BPM program with many proposed BPM
projects and limited resources, projects with a clear, objective definition of critical
success factors might be more likely to get funded, staffed, and deliver
successfully on those success factors.
Examples of critical success factors include external time-sensitive factors such
as changing regulatory requirements that impact the financial services industry
or changes to corporate tax policy that impact capital expenditure decisions and
revenue recognition processes. In these examples, the time axis might outweigh
success factors that are cost-sensitive or scope-sensitive.
Identifying key performance indicators (KPIs)
During process discovery it is important to identify, define, and continuously
validate the KPIs. These are the metrics used to measure process performance.
Most managers are already comfortable with cost and time KPIs and typically
report on activity-related cost or time metrics in some manner already today.
What a KPI is
There is some confusion about the relationship between KPIs, metrics, SLAs,
reports, and scoreboards. A KPI is a quantifiable measurement that tells us what
to measure and the unit of measure. An common KPI is cost. This KPI measures
cost of something, and the unit of measure might be U.S. currency (that is,
U.S. dollar). For a
time KPI, the unit might be minutes, hours, or days. A metric is
the combination of measures that provides more information but typically
requires additional context in order to be meaningful in the types of decisions that
separate a managed process from an unmanaged process.
Chapter 3. Process discovery 69
The operator of an automobile relies on KPIs and metrics to manage the
performance of the automobile. Examples of KPIs and metrics include:
Key performance indicator (unit)
– Distance (miles)
– Time (hours and minutes)
– Fuel (gallons)
– Temperature (degrees fahrenheit)
– Pressure (PSI)
– Vehicle speed (mph)
– Fuel mileage (mpg)
– Engine speed (rpm)
– Oil temperature (F)
– Oil pressure (PSI)
Validating KPIs with process owners and stakeholders
Some process owners have difficulty identifying even one or two KPIs, whereas
other process owners can produce a list of 250 KPIs that turn out to be irrelevant.
Start first with time-based and cost-based KPIs. Most business processes
contain steps (activities) that have service level agreements (SLAs) derived from
the time it takes to start or complete an activity or the cost associated with
performing the activity.
70 Scaling BPM Adoption from Project to Program with IBM Business Process Manager
All KPIs should trace to a decision, a stakeholder who makes that decision, and
ultimately to process goals and corporate strategy (Figure 3-13). Arguably, if a
KPI does make visible performance data in a way that enables stakeholders to
make decisions, the KPI is irrelevant. If you have a list of KPIs, validate each one
by tracing each up the hierarchy shown in Figure 3-13 and identify the
stakeholder and the decision made to support corporate goals. Though the KPI
might be interesting, if the KPI does not support a decision it is irrelevant.
Figure 3-13 Validate KPIs by tracing upward through the decisions to core business
Consider the average speed metric recorded by many modern automobiles. You
might find it interesting to notice that the average speed (that is, 34 mph) over the
life of the automobile might suggest some mix between highway and city driving.
Though interestingly, what decision does this metric support? Without a decision
that requires this metric, the data collected, and thus the KPI, is irrelevant.
If you have trouble identifying KPIs, go directly to the stakeholders and ask
questions to solicit examples of decisions made by the stakeholders. Learn the
frequency of those decisions and trace each decision to corporate strategy to
validate the decisions. With a list of decisions, the necessary data (KPIs and
SLAs) and presentation (scoreboards) will begin to materialize.
• Corporate Strategy
• Core Business Objectives
• Manage People, Processes
• Metrics and Reports