4 ways to measure your process performance
By: Akash Kotadia
Tags: Metrics, Bpm, Performance Analysis, Process Automation

Business Processes are definitely like a work of art. But unlike other art forms, it is not fully subjective. You can measure the performance of your processes through certain metrics. Here, we have written 4 of the most useful and accurate process performance metrics that you can use right now. Let’s dive in.

1. Return on Investment

It is out first and one of the most used process performance indicators around the world. You need to identify all the expenses incurred while completing a single process and the revenue that you generated from it.

Return on Investment = (Net Profit/cost of investment) x 100

You can bifurcate the revenue/net profit generated through your targeted process or at least round it up through approximation.

In order to increase the ROI, you need to either find a way to increase the revenue generated or find a way to decrease the expenses incurred.

Simply, if you are incurring a cost of 10 dollars per bag and you sell that bag at 20 dollars. Your ROI is 10 dollars. This cost of 10 dollars includes everything from the electricity bill of the factory to tax paid to the government. It is a part of cost accounting.

2. Throughput time

Throughput time is the amount of time taken by your business to finish a process from beginning to end. It includes all the time taken from starting of the idea to the output given.

The throughput time calculations depend on the model of the business.

For eg. — If you are managing a chips factory, the throughput time of making a bag of chips can be calculated. You can start tracking the time from choosing a potato, to cutting it and finally completing the packaging process.

Whereas if you work at a mobile phone service store, the throughput time can be calculated on one customer service provided. From signing the customer to an employee to get their query solved. All the time is calculated in the throughput time.

3. Quality indicators

This process performance metrics is popular in a mass-production setting like factory or assembly lines. It is the percentage of good quality output out of the total output. Good quality standards are pre-determined according to the requirements of the business. Although, there is no rule that businesses other than production can’t use it.

Extending the example of chips, we can understand this clearly. You can determine a set quality of the chips you make. And pass them through a check at the end. If the 90 out 100 chips are of your set quality, your quality is 90% of the time accurate and high. You can take conscious action like hiring more manpower or getting tougher quality checks to change this number.

For the service industry, the scale to measure quality can be customer satisfaction ratings. If an average review of 100 customers is 4/5 for your services, then the quality of your service is 90%. Determine your own quality score and make sure you stick to it.

4. Productivity Indicators

It is calculated by taking a percentage of output generated by an employee and the number of resources assigned to the same. Productivity might be a subjective term but you can always calculate it in the number of units or time. It is a really simple and easy way to measure the performance of your project. This is more of a theoretical measure as there are very few businesses that have such simple processes.

Wrap up

Return on Investment, Quality, Throughput time, and Productivity. These were the four ways to measure your process. If you liked to read it, you must go through a more extensive and detailed overview of process performance metrics. Also, If you know any other way to measure processes effectively, let us know in the comments down below.