The Road to Business Excellence – Processes & KPIs

Alexander Hemzal

Business excellence is the systematic use of quality management principles and tools in business management, with the goal of improving performance based on the principles of customer focus, stakeholder value, and process management. Your thoughts, processes, innovations, creativity, quality, it all aids in the construction of a successful and excellent business. Regardless of sector, size, structure or maturity, organizations need to establish an appropriate management system to be successful. The Excellence Model is a practical tool to help organizations do this by measuring where they are on the road to excellence; helping them understand the gaps; and then stimulating solutions. The British Quality Foundation (BQF), with the European Foundation for Quality Management (EFQM), is committed to researching and updating the Model with the inputs of tested good practices from thousands of organizations both within and outside of Europe.

The Excellence Model is an over-arching, non-prescriptive framework based on nine criteria. Five of these are 'Enablers' (Leadership, Policy & Strategy, People, Partnerships & Resources, and Processes) and four are 'Results' (Customer Results, People Results, Society Results, and Key Performance Results). The 'Enabler' criteria cover what an organization does. The 'Results' criteria cover what an organization achieves. 'Results' are caused by 'Enablers'.

Business excellence to a large extent is defined by process excellence. Companies that have developed the organizational maturity and have implemented the right Business Process Management (BPM) environment are generating more robust, flexible, and agile business processes. Best-in-Class organizations are delivering process management capability to their non-technical business users faster and more efficiently for a substantial reduction in operating cost and cycle time. As in many countries the economy limps along through a recession companies are looking for solutions to help identify and streamline inefficient business processes.

Without making it very complex Best-in-Class Performance can be measured along three criteria: An average year-over-year reduction in 1) operating cost, 2) a reduction in process cycle time and 3) improvement in output capacity. Some companies also measure the innovation capability in tracking the mix of new and old products. If you have those numbers established you can now compare them against the industry and you know if you are Best-in-Class, Industry Average, or maybe just a Follower. Those are very powerful benchmarks for the business units as well as the IT organization. A horizontal process approach with end-to-end responsibility, clear business driven KPIs, and the right amount of creativity, innovation, and a pragmatic approach to BPM will strongly help to improve the image of the IT organization as contributor to Business Excellence. Most IT organizations have not yet mastered this challenge but they need to get on this road to business excellence.