Graduate Program in Business Information Systems

1. BIS 581 Business Process Management Lecture-2 Graduate Program in Business Information Systems Aslı Sencer Department of Management Information Systems

2. Business Process Management- 2 Key Performance Indicators Process Identification

3. Key Performance Indicators - KPI • Performance measures called key performance indicators (KPI) are developed to evaluate the processes from different aspects. • BPM requires that the performance of the processes should be continually observed with respect to these KPI’s and documented periodically. • In the next step, current performances are compared with the target values that have been generated for these KPI’s. • Modifications are made in the process flow to improve the performance. You can not control without measuring!

4. Classification of KPI’s:Effectiveness, Efficiency, Flexibility Effectiveness: • Measures the degree to which an output fulfills the customer needs and requirements. • Measures if the right output is provided at the right time, place and price. • Can the process provide what is intended initially? • Can we produce more with the same input by decreasing defectives?

5. Classification of KPI’s:Effectiveness, Efficiency, Flexibility Efficiency: • Measures how much resource are used to obtain a given output? Resources are manpower, energy, machinery, raw material, capital and knowhow. • Measuring efficiency is more difficult than measuring effectiveness. • Aim is to decrease the amount of resource used to produce the same output. • Can we decrease the used resources by eliminating the non value adding activities?

6. Classification of KPI’s:Effectiveness, Efficiency, Flexibility Flexibility: • Measures the adaptability of the processes to the changing environmental conditions like special customer needs, new rules, regulations, emergency cases, etc. • A flexible process can be performed in a different way in special cases. • Flexibility is the most difficult performance to measure.

7. Process Identification Form

8. Ex: Cross Functional Process Map A Product Quality Test Process in a Fast Food Restaurant Handoff Handoff

9. Example: Process Identification Form M101 Product Quality Test Process in a Fast Food Restaurant Periodically checking if the quality of the food prepared in the fast food restaurants conforms the quality standards. Managerial process for internal customers Istanbul Municipality Department of Public Health General Product Quality Test Process in a Fast Food Restaurant This process includes: Checking the hygiene of the kitchen and service area Product quality test process Implementation of the test results Take samples: Choose a samplePut into an hygienic bag  Put into a cooler Take to laboratory: Put into the car Take to the lab Analyze: Obtain the chemicals Apply test Prepare a fine document Prepare an appropriate condition document

10. Example: Process Identification Form (cont’d.) Pass/fail document approved by the test team Sample food Test team member Istanbul Municipality Test team member, Lab. Analyst, Lab. chemicals, Hygienic bag, Cooler, Lab materials Checking the hygiene of the kitchen and service area Take samples Take to laboratory Analyze Prepare a fine document Prepare an appropriate condition document Implementation of the test results General product quality testing process Process duration Cost Number of tests/day 3-1= 2 (to be improved) 100-20=80 (to be improved) 10-30= -20 (to be improved) Decrease Decrease Increase Hr TL items 1 20 30 3 100 10 It takes long time to go the lab. (traffic problem exists, might think of portable analysis tools) Long waiting time for the analyst (might think of increasing the staff size, check the support process for maintaining the chemicals)

11. Gap Analysis Improvement needed • Measure to be decreased Gap=Current-Target • Gap > 0 • Measure to be increased • Measure to be decreased • Gap < 0 Improvement needed • Measure to be increased

12. Group Exercise 2: Process Identification 1) Complete the process identification form for the registration process.