If it’s measured, it will be done!” is a declaration which every process expert has undoubtedly heard at one time or another. But the results of a Detecon study¹ which appeared in 2008 are an astonishing contrast. It examined worldwide the impact of process management maturity on key financial performance indicators in telecommunications companies. One aspect of the conclusion is that even telcos on developed markets make no or inadequate use of process-related performance indicator systems. Process performance measurement systems (PPMS) have frequently been implemented as island solutions for ­single processes, are not integrated into goal systematics, and have a one-sided orientation to costs or quality. Moreover, the ­criticism that PPMS grow into cost-intensive performance indicator ­cemeteries producing very little information relevant for ­decisions is often heard.

At the same time, the study has identified a close relationship between the characteristics and quality of the PPMS on the one hand and the financial success of a company on the other. ­Pioneer companies demonstrate in practice as well that the contribution made by PPMS to company success is significant. PPMS can substantially improve the quality of the decisions made in the company, contribute to the activation of employee potential, and make continuous improvement of processes possible in the first place.

Process performance measurement includes both operational and strategic processes

If we want to make the impact range of a PPMS transparent and subsequently consider exactly the benefits it offers, we need to start by defining the terms “performance” and “performance measurement”. The term “performance”, particularly as it is used in practice, covers a multitude of highly diverse concepts. As early as the 1940s, the economist Theodor Beste noted: “... but just what is actually meant by performance remains often unclear.”²

In business administration, the term performance is “... ­understood to mean the evaluated contribution to the ­achievement of an organization’s goals.”³ Considering this, good performance ­means activities which contribute to the organization’s ­achievement of its goals, while poor performance is the opposite. It follows then that performance measurement is the analysis and assessment of company activities in terms of the corporate goals. So process performance measurement is the ­analysis and evaluation of company processes in terms of the corporate goals. Process performance measurement is ­operationalized by means of performance indicators which are linked to a system through effect relationships. Process ­performance ­measurement does is not restricted to the ­operating processes such as “order to provisioning”; it also incorporates strategic processes in close proximity to the market such as ­product lifecycle management into the evaluation.