What does performance say about a process model?
If process performance is high, that indicates a well set up and effectively implemented process. High performing processes are based on strong process models.
How is process performance measured?
Standardization as an indicator.
The higher the standardization, the higher the process performance. High standardization means that a process is implemented in a few process variants called the main variants. The main variants are those variants that are implemented or run through by most business transactions. In most cases, the main variants correspond to the target process or reference process—that is, the ideal process as it was originally set up and intended, for example, by process management. The main variants are generally rule compliant. However, process sequences that are not planned often develop over time. After all, not all circumstances or relationships are predictable or calculable. This applies to both internal and external factors. For example, overload, technical problems, or supplier problems can be causes for an unplanned process implementation or process run.
A high number of process variants, and thus low standardization, often has a negative impact on performance. A standardized process implementation saves resources and is essential for good process performance.
Cycle time as an indicator.
The cycle time of a case indicates how long a business process took from start to end. For example, how long a manufacturing process took to produce a single product. In order to assess the efficiency of an entire process, look at relevant key figures for the cycle time, such as the average cycle time or all cases that exceed the target duration. The shorter the cycle times in a process, the better—as long as the quality of the performance or the product does not decrease as a result. Short cycle times tend to increase customer satisfaction and reduce costs.
Product quality as an indicator.
The most important thing in a business process is the output—that is, the result that contributes to the added value of the company. Outputs can be end products, but they can also be services supported by a process. Depending on the service or product, there are different methods of measuring quality. In general, however, the better the quality of a product or service or the more often the output meets the quality standard, the higher the process performance will be.
Cost expenditure as an indicator.
Costs that are incurred due to the process implementation and not as investment goods can give us information about the process performance.
What information does the amount of cost provide about process performance? To answer this question, first consider the relation and the causes of the costs:
- Relation: Are the calculated costs higher than at an earlier time or period? Or are the costs higher than those of a comparable product or service?
- Causes: What caused the costs? Process changes, restructuring, or problems and unexpected process developments?
Are the calculated costs above relevant comparative values, such as previous values or parameters of comparable products or services? Are they not attributable to temporary factors, such as restructuring? If any of these things are true, then these costs may indicate a performance deficit.