Point Kaizen Vs Flow Kaizen

You hear a lot about key performance indicators (KPIs), metrics and dashboards when it comes to both business process outsourcing as well as outsourced software development.

The funny thing is that most of them are about "Point KPIs" rather than "Flow KPIs."

If it is a telephone based business process, you will hear about Average Handle Time, Average Wait Time, etc. You will hear about time taken to perform non-telephone based process steps as in TAT - Turn Around Time.

But what really matters to end customers and end users is the overall Throughput or Overall Time taken to order something and get it shipped to them or the Time Taken from the first contact to a Help Desk until the time their problem is solved.

There is a historic reason for this obsession with Point KPIs and not Flow KPIs. The reason is simply that information is hidden in many different information silos and needs coaxing out of where it is for someone to determine how a process "flowed" rather than how it performed in its various steps.

Which brings us to longer term process improvement - most process improvement is focused on Point KPIs and hence are Point Kaizen efforts. Flow Kaizen efforts may be just as important! Focusing on Point KPIs may lead to people "gaming" the system while focus on Flow KPIs may keep the whole process honest.

Something to think about!