What are process metrics?

As Harmon says one of the key steps in developing a business process architecture is to "determine how you will measure whether or not the value chain achieves its goals."  This is a point that is reiterated by Cooper and Patterson; "Success with BPM is almost always measured with a clear simple business metric … If you can't identify a metric that is meaningful to your business partners, you need to step back and evaluate if you have identified the right target process.”  (Cooper and Patterson, 2007).  Measurement is closely related to the steps of identifying a specific value chain and determining the specific strategic goals that the value chain is to achieve. 

Harmon indicates that there are two types of measures of business processes; internal and external.  The external measures focus on the results achieved by the value chain that the process is a part of and relate to the ultimate customer of the value chain.  Internal measures are focused inward on the process itself and relate to the efficiency of the process.  "External measures let us know how well the process is doing what it is intended to do. Internal measures let us know how effective the process is in producing outputs. Put slightly differently, External measures check results and Internal measures check productivity."

One similarity is that both internal and external measures can be thought of as relating the activity of the process to its customer, if one wants to consider any process that receives another processes' outputs as its customer.  In that sense a process is both "a supplier of one process and a customer of another."  Looking at metrics related to the output of a process and the customer satisfaction with that output is what binds both internal and external metrics together. 

One key difference between internal and external metrics, is that internal measures are leading indicators and are easy for managers to identify, collect and interpret.  External measures are often harder to identify and obtain in concrete quantifiable measures.  Measures like customer satisfaction also tend to be lagging indicators and knowing about them only comes after the performance of the process.  However, Harmon points out that although they should be used in conjunction, "to effectively evaluate the performance of an organization, you must focus on the external measures.  Once you "lock down" the external measures, then you can begin to focus on improving your internal measures."

Works cited

Cooper, M., Patterson, P. (April, 2007). Business Process Management (BPM) Definition and Solutions. http://www.cio.com/article/106609/Business_Process_Management_BPM_Definition_and_Solutions (Accessed on September 18,2012).

Harmon, P. (2007). Business Process Change: A Guide for Business Managers and BPM and Six Sigma Professionals. Burlington, MA 01803: Morgan Kauffman Publishers.

Harmon, P.  Measurement and Services. (May 13, 2008).  BPTrends. (6:9).
http://www.bptrends.com/publicationfiles/advisor20080513.pdf (Accessed on October 3, 2012).