As mentioned in a previous article “Introduction to Business Process Management“, setting up a BPM tool is ideal for companies looking to automate their business processes, standardize them and optimize them, on a continuous basis.
To assess the effectiveness of their automated processes and make sure they contribute effectively to strategic objectives, it is necessary to measure their performance using KPIs (Key Performance Indicators) and other well-identified key indicators.
In this article, we suggest exploring some of the main performance indicators to track in order to assess the effectiveness of your processes when implementing a BPM solution. Be careful, KPIs must always be specific to each organization. Some of the KPIs presented will not be relevant to you, while others will be essential. Ultimately, it is your needs that must define the choice of your KPIs.
1. The Fundamentals of KPIs and Key Indicators
As you will have understood, KPIs, or key performance indicators, must be the starting point of any performance measurement. While this may sound obvious, far too many companies embark on process digitalization with a view to automating them without really defining their expectations and identifying the expected results. Unfortunately, this very often leads to disappointment and misunderstanding, even to questioning the chosen BPM solution.
KPIs are measures that are most often quantifiable, but can also be qualitative, which make it possible to assess the effectiveness of a process in achieving the defined objectives. These indicators help to monitor performance, identify weak points and make informed decisions to improve processes. They must imperatively be specific, measurable, achievable, relevant and time-bound (SMART).
2. The main KPIs for assessing the performance of automated processes
2.1. The “Cycle Time”
“Cycle time” measures the total time needed to complete a process, from start to finish. A short cycle time generally indicates efficient execution of the process, while a long cycle time can signal inefficiencies or bottlenecks. Be careful all the same: some cycles may by nature be long, because they meet standardized requirements, and are therefore perfectly efficient, for example the product innovation process. Indeed, developing a new product can take months, even years, yet it is not inefficient for that.
2.2. The compliance rate
The compliance rate is a good example of an objective that is both quantitative and qualitative. It assesses the proportion of processes carried out in compliance with established standards and procedures. It is very important to ensure that processes comply with regulations and internal standards. A high compliance rate means that the process is generally followed correctly, thus reducing the risk of non-compliance and errors.
2.3. The error, or defect, rate
This KPI measures the frequency of errors or defects in automated processes. A high error rate can indicate quality problems or gaps in the training of the people involved in the process. Tracking this KPI makes it possible to identify areas requiring improvement and to put corrective actions in place to reduce errors.
2.4. The cost per process automated
The cost per process calculates the total cost associated with carrying out a specific process. The goal is to be able to assess the economic efficiency of the process. A high cost, for example, can signal inefficiencies or waste, and an in-depth analysis can help reduce costs and improve profitability.
2.5. Customer satisfaction
This is perhaps the KPI that should come first. Indeed, if the process to be optimized does not directly affect customer satisfaction, it must in any case always be studied with regard to this objective. Customer satisfaction is a central KPI for assessing the impact of processes on end customers. Generally measured through surveys or customer feedback, it indicates whether processes meet customers’ expectations and contribute to their overall satisfaction. High satisfaction is often concomitant with a well-executed process. Response times, for example, assess the time needed to respond to requests or events in a process. Particularly important in customer-oriented processes, where fast response times can improve customer satisfaction and service efficiency.
2.6. Productivity
Productivity measures the ratio between the output of a process and the resources, human and material, used to achieve it. Productivity is, naturally, one of the first KPIs measured in companies. High productivity indicates efficient use of resources, while low productivity may suggest inefficiencies or work overloads or poor use of material resources.
2.7. The completion rate
The completion rate measures the proportion of tasks or projects completed relative to the total number planned. It is often expressed as a percentage and makes it possible to track the progress of a project or initiative. A high completion rate indicates that processes are well managed and that objectives are being met within the planned deadlines.
3. How to choose the appropriate KPIs?
The choice of appropriate KPIs depends on several factors, notably the organization’s strategic objectives, the type of process to be assessed and the stakeholders involved. You must keep in mind to select KPIs that align operational objectives with strategic objectives and that provide clear and actionable information for your company.
But above all, the choice of KPIs is up to you, your needs, your objectives! Don’t look only at what your neighbour is doing. Ask yourself what you want to improve, optimize, evolve… and you will define the KPIs that suit you.
