Global markets are increasingly experiencing digital revolution as a result of the rising market demands. This demand has seemingly birthed a new form of business process management that is typically implemented by BPMS (Business Process Management Software). As a result, businesses can easily manage operations like sales, marketing, production, customer support and communication among many more using this technology.
Business process is the foundation of all business actions. It therefore drives all the various organizational departments in order that they work in unity while correlating with both customers and suppliers. Business process management system is therefore a tool that supports business systems in whole and not just part. BPM is therefore more robust in supporting businesses to grow supply, improve efficiency and enhance customer satisfaction. It provides more links for better understanding of the correlation between use of BPM tools and improved business efficiencies.
On the other hand, BPMS refers to a software tool that organizations use to improve their business processes through definition, automation and analysis of the said business processes. Companies therefore use BPMS to enable the various aspects of BPM as a discipline used to identify, document and improve business processes.
In order to better understand the essence of key performance indicators, it’s important to mention the main steps of PBM in defining indicators for different time. These are – modelling business process using BPMN, using a BPM Engine to execute the modeled process, measuring the business process execution using key performance indicators (KPIs) and finally defining improvements as well as optimizing the process. Let’s look at some of the key performance indicators used in BPM.
Long Term Key Performance Indicators
Long-term indicators used in BPM are basically based on business Intelligence Technology. This indicator uses larger time frames of between six months to one year back. It offers a number of advantages to users such as the ability of users to generate reports, slice and dice data, browse through the information, analyze and even export data.
Some of the examples of long-term key performance indicators include:
- Number of process instances: this KPI aids a “seasonality” analysis such as identification of the number of documents processes in every step or when are more documents or processes created.
- Average time within which a process instance is completed: you might be interested in identifying process types, when it was created such as the month and other relevant variables. This particular indicator is important in meeting service level agreements and assessing if deadlines were exceeded or not.
- The average time required by each process step. This is very important especially for the identification of process bottlenecks and analysis of the possible causes. Companies would therefore identify the time taken for the completion of every step in a process and earmark the most time-consuming stages as actual process bottlenecks for review and improvement.
Short-Term Key Performance Indicators
Short-term indicators used in BPM provide short term analysis going as far as a minute, hour or day back. They are typically referred to as real-time indicators.
The information derived from short-term indicators are generally dependent on Business Activity Monitoring (BAM) Technology. In addition, the information is displayed in a Balanced Score Card (BSC).
These tools allow users to set alerts for indicators that go beyond predefined deadlines. Any time deadlines are exceeded, users get alerts and they understand it is time to take action.
Generally, a single indicator does not provide satisfying information for decision-making in BPM. It is therefore important to compare one KPI to others to be able to prove or even disapprove hypothesis derivative from the very first indictor.
A good example is when analyzing the productivity of workers. If the first indicator shows that it takes longer time to complete a process than anticipated, the management is likely to think that productivity of the teams involved is low because workers do not perform their duties as fast as it is anticipated. However, this indicator should be supplemented with the number of instances created. If the team detects that there are a vast number of instances, then the actual cause of delay is clearly far from the level of productivity.
This is therefore to say that indicators always provide partial information and should be used in complementary terms.