Businesses operate on processes. Bad processes will shut your company down, good ones will keep your doors open for a lot of years, and great ones will make your brand synonymous with excellence in your industry. Simple enough, but sometimes it’s difficult to clearly see when a process is working and when it’s not. In keeping with Lean Six Sigma (LSS) methodology, there’s a tool to help you know for sure – in this case, a process by which to evaluate your processes.
Today’s business landscape is ultra competitive, with everyone competing for the same thing: providing customers with the best experiences. If your company can’t provide that, another one will. The first place to start is to make sure that your business is as efficient as possible. The process that helps you achieve this – the LSS tool – is called process performance management.
Overview: what is process performance management?
PPM is a form of continuous improvement that enables organizations to focus their efforts on improvement projects using data from multiple sources, including the company’s IT systems. The PPM tool provides companies with information they need to improve processes and make decisions about how to utilize resources within the organization.
As a key component of Lean Six Sigma, it uses a series of techniques and methodologies to monitor processes in order to maximize service offerings and reduce costs. By improving overall process efficiency, managers can more effectively balance work across individuals, departments, and times of day, leading to greater employee morale, efficiency, and customer satisfaction.
3 Benefits to process performance management
Three examples of how PPM can benefit businesses are:
1. Through a problem-solving approach it identifies problems early on in the process so that they can be fixed before they become even bigger issues.
By identifying problems early on in the process, and fixing them before they become even bigger issues, PPM ensures that processes are optimal to meet company needs. A problem-solving approach is also beneficial in that it identifies solutions that have been proven to work across other companies.
2. It improves accountability by identifying areas where employees can make improvements to their own processes.
If problems persist, managers will know exactly where they came from and who is responsible for fixing them. They can then shift resources to make improvements as necessary.
3. By assessing all steps in a given process together, one is able to identify opportunities for cutting costs.
This aids in the creation of new steps and processes that can result in new revenue streams (e.g., one may discover a way to save time on a process, then sell this time savings back to customers). This helps eliminate redundancy in processes and take advantage of synergies between teams, which can cut costs significantly.
Why is process performance management important to understand?
PPM is a vital component of Lean Six Sigma. It gives businesses a better understanding of their processes, where there are bottlenecks, and where to identify areas for improvement. It allows businesses to take on projects that provide maximum value with minimum resources.
By addressing the three aspects – process diagnostics, performance measures, and gap analysis – it provides a road map for improving a business’s overall efficiency.
An industry example of process performance management
Process performance management involves the identification, measurement, improvement, and control of processes within a business. One of the main goals of LSS is to improve process performance, so having an understanding of the concepts that this topic requires will help you see how it can be applied towards making businesses more efficient. To help explain this better, let’s consider IBM’s Smarter Planet initiative.
In 2008, IBM completely overhauled their processes to stay relevant to a demographic that had, over the course of the decade prior, changed completely. The Internet was now everywhere, and with it the never-ending stream of instantly available data and information. Businesses were no longer limited by geography, but by technology.
Not IBMs technology, however. They presented customers with a new framework built to support the emerging global workforce. By refocusing their efforts on – and optimizing their processes around – interconnectedness driven by intelligent automation, they made themselves a necessity for any business who valued responsiveness, productivity, and efficiency. The Smarter Planet initiative was designed to support the world’s connectivity in a profound way, simultaneously promoting more forward-thinking ingenuity and outside-the-box innovation, creating an ever-evolving cycle of new ideas birthing new technologies that birthed more ideas and more technology.
IBMs Smarter Planet initiative is still going strong, taking on exponentially more ambitious endeavors, and is arguably one of the most successful examples of PPM at work.
3 Best practices when thinking about PPM
PPM is a philosophy that focuses on continuous improvement, ensuring process efficiency and effectiveness, then applying the improvement tools (usually Lean Six Sigma) to achieve it. The three best practices of PPM are:
1. Quality must be defined by the processes.
This means that processes should be measured and improved at their own level of detail instead of considering an entire process from beginning or end so as not to miss issues with individual activities.
2. Continuous improvements are essential.
Through a structured, systematic process improvement cycle and by focusing on continuous improvement, organizations can achieve better outcomes.
3. Top management support is key.
PPM is an effective way to help companies develop strategies, identify potential problems with their processes, and find solutions to those problems. To do this effectively, PPM requires top management support.
Frequently asked questions (FAQs) about PPM
How can we determine whether our processes are optimized?
You determine process optimization by mapping a current process with its desired outcome. A workflow assessment tool is used to map out a specific process for your team as well as gather feedback from internal and/or external stakeholders so that you can get an accurate idea of what works, what doesn’t and how improve any areas where it may be needed.
How will PPM improve workflow?
By using a data-driven process mapping approach, which allows you and your team to identify bottlenecks and assign tasks effectively. In other words, it minimizes waste and maximizes productivity and profits.
What kind of budget will it take to implement this method?
The answer to that depends on the size of your company, where your company is located in their lean journey, and how much effort they want to put into it. There is no set budget for PPM, but the size of the organization will influence the amount of money needed. A small business can start out on a minimal budget and grow from there.
Necessary for optimal business
PPM is an important tool in establishing an optimal business process within a company. In simple terms, with it businesses are able to reduce waste and overall production time while making sure the resulting product meets customer expectations. But don’t let the seeming simplicity fool you – these are the foundational tenets of every successful, reputable, influential business. These are the business that go on to become giants in and titans of their industry.