Process management

Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
1.2.7 Organisation and Process
Performance Management
Days 11-15
14.2.-18.2.2011
Process Performance Management
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Day 11
Introduction to process
management
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Process Management - introduction
 Process management is the ensemble of activities of planning and
monitoring the performance of a process. The term usually refers to the
management of business processes and manufacturing processes
But it is not only question about business processes
 The functions and activities of the public sector can also be seen as processes

 Business process management (BPM) and business process reengineering
are interrelated, but not identical.
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Process Management - introduction
 Process management is the application of
knowledge, skills, tools, techniques and systems
to define, visualize, measure, control, report and
improve processes with the goal to meet
customer requirements
 In the public sector it is also essential to meet the
requirements of the citizens, and to reach
outcomes and societal impacts
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Process management cycle
Analyze
Control
Measure
Strategy
management
Information
management
Process
execution
Align
Process design
Implement
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Present - target
1. The processes are not defined and/or descriped
2. Some individual processes are descriped
3. Processes are defined in the whole organisation
4. Processes (also cross-functional) are managed in
the organization
5. Processes across agencies (crossorganizational) are developed
6. Horizontal processes across administrative
sectors are managed, developed and reengineered
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
From organisational process development to
cross-functional process development
 The processes do not follow the
functional/organizational structures: typically the
agencies take care of certain parts of the whole
process
 Changes in one agency have effects on the same
process in other agencies
 Often nobody has the responsibility to develop
and manage cross-organizational process as a
whole
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
From organisational process development to
cross-functional process development
Present
Guidance
Processes
IT
Future?
Ministry Ministry Ministry
Agency
ITsystem
Agency
ITsystem
Agency
ITsystem
Guidance across adminis
trative sectors
Agency
Agency
IT-system
Agency
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Functional vs. process
orientation
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Core / Support processes
 The distinction between core processes
and support processes
 Value-added vs. non-value-added?
 Departmental vs. cross-functional?
 Internal customer vs. external customer?
 (Revenue generating vs. non-revenue
generating?)
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Process descriptions
 Process map /process structure
 Process diagrams
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
The meaning of process
descriptions
 In process management the question is not about process
descriptions
 But
 to be able to manage processes, the process definitions and
descriptions are needed
 In practise process descriptions are needed for
 Documentation
 Communication
 Visualisation
 Understanding
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Prerequisites for process
discovery and definition
 The strategy and strategic objectives have to be clear enough
 They determine the goals and requirements for the processes

-> discovering and defining the processes
 The processes determine the goals and requirements for the
resources
 Skills and knowledge
 IT
 Premises
 Etc.
 The processes convert the resources into activities (which are derived
from the strategy)
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Process discovery
 Before describing the processes they have to be
discovered and defined
 Even if the processes are not identified, they exist in the
organisation
 Discovering the processes is an important step in
structuring and understanding the activities/functions
 There does not exist only one right way to do process
discovery – several approaches are possible
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Process discovery
 It is about defining the most essential
 Targets
 Clients
 Activities
 Outputs
 It is also important to define how and where
the process starts and how it comes to an
end
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
How to choose the level for
descriptions
 The process descriptions are instruments for
 Process management
 Process evaluation and improvement
 Before starting to describe the processes it is important to
analyse the requirements for the descriptions
 The process map /process structure, where the processes
are named, is enough, if the descriptions are needed only
to present the functions and activities
 The processes has to defined and described more
precisely (incl. the process diagrams), if they are needed
for developing the functions and activities
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
The hierarchy of the descriptions
 Process map / process structure
 Descripes the entity of the process, all core and support
processes are listed
 Description of the core and support processes
and their sub processes
 Process diagrams (workflows)
 Sub processes are descriped by stages
 Document, which gives additional information of
the process and its activities
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
The content of the process
description
 The purpose and targets of the process
 The clients and other interest groups
 The inputs and outputs
 The interfaces and connections
 The roles and responsibilities of the actors, incl. process




owner
Skills and knowledge needed
IT-systems
Critical succes factors
Metrics and development
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
The role of the process owner
 Each process should have an owner
 He/she is responsible for the functionality and the




performance of the process
He/she participates in defining the targets for the
process
He/she is responsible for the development of the
process
He/she co-ordinates the process as a whole
He/she takes care of the connections to other
processes
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Simple process mapping notation: example of
process diagram
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Process evaluation and metrics
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Process evaluation
 Organizations and the working methods do not
change by drawing and defining processes
 The biggest challenges are ahead, when the
process is described
 Process evaluation is a tool to
 Understand the processes
 To become aware of the processes and process stages
 Accept the processes
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Process evaluation
 Presentation of the process
 Assessment of the process description
 +/-
 Presentation of opinions about the process
 Prioritization of the improvements needed
 Future steps -> action plan
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Types of process evaluation
 Evaluation by the process team / process
managers
 Evaluation by the management team of the
organisation
 Evaluation by those who are in critical role in the
process
 Evaluation by process actors/members and
responsible parties
 External evaluation
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
”Walking” through the process
 Presentation of the process descriptions
 Walking through the process
 Each process actor tells about his/her work in
the process
 Others make questions and notes
 Evaluation of the description
 Strengts and weaknesses
 Action plan
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Process metrics – the basis for
measuring
 Provide information for developing and improving
the processes
 Measuring is part of process management and
developing
 If you can’t measure, you can’t manage and/or
control it
 The measures are useless, if they can’t be
exploited in process development and
improvement
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Why to measure?
 To assess the needs for change
 To assess how the process changes have
affected
 To verify whether the targets have been reached
or not
 To identify the deviations in the process
 To prioritize the development proposals
 To identify training requirements for the process
team
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Criterion for the measurement
 Specific
 Measurable
 Steering
 Relevant
 Well-timed
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Criterion for a good indicator
 Essential
 Unambiguous
 Reliable
 Understandable
 Easy to use
 Affordable
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
How to begin?
 Who are the clients?
 What are their expectations?
 How can we measure if these expectations
are met or not?
 What is our target in terms of each
indicator?
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Assessment of the process
 Efficiency
 Resources needed (financial resources, man-
years, time, material, etc.)
 Resource allocation
 Effectiveness
 Are the expectations of the clients met?
 Flexibility
 How the process reacts to changes in customer
expectations
Decision Making and Performance Management in Public Finance
Kamu Maliyesinde Karar Alma ve Performans Yönetimi
TR08IBFI03
Exampels of process indicators
 Cycle-times, idle-times
 Costs (e.g. unit costs)
 Waiting time for customer
 Mistakes in documents, number of wrong delivery
 Time spent for activities that are value-added /
non value-added
 Customer satisfaction
 Number of decision points in the process, time
spent for decision making