Process Improvement meets Performance Management

Recently there has been a spate of articles that hit the same theme: In order to improve business processes, you need to look at Operational Inteligence or Performance Management Information.

Small surprise! Slicing and Dicing of Sales Data to understand which of your products are selling in which regions or which of your sales people are meeting their sales targets by city, zone, region and state are all pretty common. Many enteprises have built these Sales Datawarehouses.

Companies like Hyperion enable you to slice and dice Financial Information; If your profit contribution for Product Group A is X, which among your products in that group is contributing more and which is contributing less? These kinds of financial insights can be obtained from Financial data Warehouses.

Same principle applies to most end to end processes. If your Order to Cash process takes 15 days and you are shooting for 10 days average, do you have insights on where the bottlenecks are? Is it because Dept X in this cycle is slower than Dept Y? Or does it have to do with the type of product or service? What type of clients are affected by this? Do you want to pay more attention to your high valued clients and speed up their processes alone?

What are root causes for not meeting your process cycle time goals? What are root causes for not meeting your Customer satisfaction goals?

All these answers require detailed Process Execution data collected properly and analyzed. This is where Operational Intelligence or Performance Management data comes into play and enables you to truly take an end-to-end view before you embark on process improvement efforts.

Otherwise, you may end up with a lot of sub-optimization of business processes that does not help anyone. Lean and Six Sigma efforts may show a lot of improvement in how Orders are entered into your Order Management system. However, are your orders entered faster, only to stagnate in the next step of the Order to cash process? You may have just wasted a lot of money improving something that causes a bottleneck downstream!!

Operational Intelligence is key to sane process improvement!

Continual improvement is an unending journey. - Lloyd Dobens