A process-based performance measurement framework for continuous process improvement

Abstract

Because enterprise performance is achieved through the execution of business processes, business process and performance measurement of an enterprise are closely interrelated. Performance measurement should therefore be based on the detailed activities of business processes. For process-based performance measurement, the proposed measurement framework consists of the following three models: a Key Performance Indicator (KPI) model, a process model and a KPI-Process (K-P) model. The structure of the business process is described in the process model. The amount of contribution of a specific KPI to another or higher level KPI is defined by the KPI model. In addition, the amount of influence of a business process on a specific KPI is defined by the K-P model. By using the proposed framework, the influences of process/sub-process on KPIs can be traced, and the contribution of tactical/operational level KPIs on strategic level KPIs can be easily calculated. To guide business practitioners in the implementation of the proposed framework, the procedure for developing a measurement framework is also presented. Significance: This paper proposes a process-based performance measurement framework (PPMF) which can be used to conduct a what-if analysis and to provide a measurement frame for real-time monitoring to achieve the strategic goal of an enterprise for Business Process Reengineering (BPR) or Process Innovation (PI).