BUSINESS PROCESS MANAGEMENT

IN U.S. FIRMS TODAY

A Study Commissioned by Rummler-Brache Group
March, 2004

Executive Summary
Rummler-Brache Group, a firm dedicated to performance improvement through process
innovation and change management principles, conducted a field research project studying the
application of process management in U.S. firms. Thirty-two companies representing a cross
section of U.S. firms were surveyed in industries ranging from manufacturing to professional
services.
The research indicates that in the majority of firms process management is mediocre at best.
While over half of the companies surveyed conduct process improvement projects, only one-third
exercise comprehensive process management. Lack of a standard improvement approach and the
absence of performance metrics are the most cited reasons for lackluster process management.
The primary issues today facing the polled organizations are crisply defining corporate strategy as
well as effectively managing processes, people and technology. Issues of secondary importance
to firms in the study include customer and talent retention, new product development and
adequate revenue growth.
The companies surveyed consider process improvement more than twice as significant as other
initiatives when attempting to improve their performance. They also deem strategic alliances,
technology solutions and changing corporate culture as important.

Research Background
Our research utilized a two-step data-gathering approach. First, we created a scorecard known as
the Process Performance Index, or PPI. The PPI is comprised of ten success factors gauging how
well an organization manages its key business processes. [Refer to Appendix A for the Process
Performance Index.]

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Participants rated their organizations performance on each success factor using a 5-point scale,
with a 1 representing Strongly Disagree and a 5 representing Strongly Agree. The ten PPI
success factors and their definitions are below:
Key Success Factor
1. Alignment with
Strategy
2. Holistic Approach
3. Process Awareness by
Management &
Employees
4. Portfolio of Process
Management
Initiatives
5. Process Improvement
Methodology
6. Process Metrics
7. Customer Focus
8. Process Management
9. Information Systems
10. Change Management

Defined as
Business processes are directly linked to the organizations strategy
and critical success factors
Enterprise business processes are defined before launching
improvement initiatives (e.g., Six Sigma, CRM, etc.)
Key players understand the role of process management in
improving performance
Improvement efforts are prioritized according to process health
and linkage to current issues
Process management teams use a standard approach to navigate
process analysis and design
Process performance is measured at the individual, process and
enterprise levels
Process analysis and design efforts focus on delivering value to the
customer
Process owners monitor process metrics and continuous
improvement efforts on a regular basis
Process is the master and information systems are
the servants
People and cultural issues are effectively addressed when process
changes are introduced

The second part of the research included a questionnaire with the following four questions:
1. What are the 3 most critical issues facing your business today?
2. What are the greatest opportunities for improving your companys performance over the
next 6-18 months?
3. Does your company conduct formal process improvement projects? If yes, what is the
biggest challenge you experience in managing them?
4. Does your company emphasize end-to-end business process management? If yes, what
have been your major challenges?
By design, this portion of the research allowed participants to elaborate on where they see the
best opportunities to improve their companies performance as well as assess their organizations
process management awareness.

Research Population Demographics

The types of industries represented by participants in the study were quite varied. Over onequarter of participating firms were manufacturing entities (28.5%). The insurance and
professional services firms made up the second largest segments (each 12.5%), followed by the
energy, healthcare and financial services industries (each 9.4%). The retail industry was the
smallest segment, representing 6.3% of participants. Various other firms representing such
industries as non-profits, restaurant management and education were consolidated in an Other
category comprising 12.4% of participants.
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The percentage of study participants broken out by industry segment is represented in the
following diagram:

Research Participants by Industry Segments

13%

Manufacturing

28%

6%

Insurance
Professional Services

9%

Energy
Financial Services
Healthcare

9%

13%

Retail
Other

9%

13%

The sizes of the companies participating in the study were also wide-ranging. Their annual
revenues ranged from less than $10 million (14.8% of respondents) to over $5 billion (7.4%).
The percentage break-down of research participants by annual revenue ranges is illustrated
below:

Research Participants by Annual Revenues

33.3%

22.2%
18.5%
14.8%
7.4%
3.7%

< $10M

$10M to
$99.9M

$100M to
$499.9M

$500M to
$999.9M

$1B to
$4.9B

$5B+

Finally, employee population in participating organizations ranged from less than 100 employees
to over 30,000.

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Process Performance Index Results

The study results were tabulated for each participant completing the Process Performance Index
tool. Respondents scores were analyzed in relation to the following ten process management key
success factors identified in the PPI. Simple mathematical averages were calculated for all PPI
scores in the context of the 5-point scale mentioned earlier.
1. Alignment with Strategy
Ensuring that an organizations business processes are directly linked to its strategy is paramount
in delivering shareholder and customer value. A properly tuned strategy provides the foundation
for how a firm is going to meet its goals. Since business processes are the way in which
execution occurs (work gets done) in any enterprise, processes should be tightly linked to a firms
strategy.
Most companies surveyed believe there is adequate, if not somewhat strong, alignment of their
business processes with their defined strategies. The average PPI score (on a 5-point scale) was
3.5the second highest average score of all PPI key success factors. The insurance industry
registered the highest average score on this success factor with a 4.5. The energy industry scored
lowest with a 2.7 average.
2. Holistic Approach
Prudent organizations realize that it is important to understand and define their key business
processes before launching any large scale improvement initiatives. Pursuing company-wide
programs like CRM, Six Sigma, etc., while neglecting how an organization accomplishes its
work, is myopic and often detrimental. Major improvement initiatives should be defined and
understood in terms of the key workflows, or processes, within an organization.
The majority of companies surveyed indicate that their approach to improvement efforts is not
done through a process lens. The average PPI score on this success factor was 2.8the second
lowest average PPI score. The insurance industry earned the highest average score on this factor
with a 3.8. The lowest average score of 2.0 was posted by the miscellaneousor other
industry segment.
3. Process Awareness by Management and Employees
Even with well defined plans on how to best improve performance within an organization, the
individuals responsible for executing the plans must know what to do and how to do it. As
business processes are the engine for creating and delivering a companys products and services,
possessing a certain amount of process knowledge is vital to improving performance. Thus, it is
essential that all players in a firmfrom senior executives to individual contributorsknow the
importance of managing processes when seeking performance gains.
Companies participating in the research believe there is an average level of process awareness
among management and employees in their organizations. The average PPI score on this factor
was 3.2. The insurance and professional services industries obtained the highest average score of
3.8. The miscellaneous other segment delivered the lowest average score of 2.5.
4. Portfolio of Process Management Initiatives
When deciding which improvement effort to tackle first, it is critical to prioritize all improvement
initiatives in order of importance to the firm. The approach a company uses to achieve this
prioritization is very important to realizing increased performance. The relative health of each
key business process within an enterprise, as well as the current issues faced by the company,
should be the beacons guiding prioritization of every improvement initiative.
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The research findings reveal that there is some attention given to process management and
relative process health when establishing improvement priorities. This factors average PPI score
was 3.1. Once again, the insurance industry recorded the highest average score of 3.8. The
lowest average score of 2.0 was found in by the financial services industry.
5. Process Improvement Methodology
Failing to utilize a standard approach to help navigate process analysis, design and management
is the equivalent of wearing a tool belt to perform a job without any tools hung from the belt. The
discipline provided by a well defined technique works to keep process management activities
focused and on task. A disciplined methodology enables a companys resources to speak a
uniform language around business process management and mitigates the need to reinvent the
wheel with each new improvement initiative.
Participants in the research believe there is a clear lack of a standard approach to business process
management within their organizations. The average PPI score for this factor was 2.5the
lowest average PPI score in the survey across all ten success factors. The industry with the
highest average score on this factor was financial services, registering a 3.3. Conversely, the
healthcare, retail and other industry segments all documented 2.0 as their average scores.
6. Process Metrics
Redesigning and streamlining processes is an excellent step toward overall process management.
However, simply redesigning a set of key processes is not enough. Even after redesign work, an
organization must manage its processes for optimal performance. Leading organizations
recognize the importance of measuring business processes not only at the process level, but also
at the enterprise-wide and individual employee levels. This holistic approach to process
management is key to successful performance improvement.
Most companies in the study indicate a lack of true process and performance metrics. The
average PPI score for this factor was 2.8tied with the Holistic Approach factor as the second
lowest average PPI score in the study. The healthcare industry scored the highest on this factor
with an average score of 3.7. The lowest average score on this factor (2.0) was earned by the
retail industry segment.
7. Customer Focus
Organizations have realized for quite some time that maintaining an intense focus on the
customer will provide the best value to both customers and shareholders. Process-savvy firms
recognize that their business processes exist for one reason and one reason onlyto provide
goods and services to customers. Such firms focus their process analysis and design efforts on
delivering value to their customers.
The vast majority of organizations in the research have clearly embraced the notion of customer
centricity. This was the PPI success factor with the highest average scorea 4.0. The
professional services industry recorded the highest average score of 4.7. The lowest average
score of 3.3 was realized by the energy industry.
8. Process Management
Process-astute organizations assign process owners who are responsible forand often
compensated onthe successful performance of their designated processes. Bona fide process
ownership provides one-point accountability for delivering business results.

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Research participants rated their process management capabilities as average. This factors mean
score was 2.9. The professional services and insurance industries demonstrated the highest
average scores of 3.8 each. The financial services industry segment recorded the lowest average
PPI score of 2.0.
9. Information Systems
In todays world of enabling technology, it is readily apparent that information systems have the
potential to provide superior support to business processes. Firms that have adopted this
approach have learned that harnessing the power of information technology to buttress key
business processes increases the likelihood of excellent process performance. However, it is
particularly important that information systems serve an organizations business processes
not the other way around. Forcing processes into the confines of information systems will almost
always impede process performance.
Participants in the research believe they have achieved some level of balance between their
business processes and information systems, averaging a PPI score of 3.1 on this factor.
However, the distribution of PPI scores around this mean varied largely. The insurance industry
recorded the highest average PPI score on this factor with a 4.0. On the other end of the
spectrum, the financial services industry posted the lowest average score on this factor (1.7).
10. Change Management
When embarking on a performance improvement campaign, companies often fail to smoothly
integrate the resulting changes into the organization. They struggle with the people and cultural
issues resulting from the improvement effort. It is imperative that these people and cultural issues
be effectively addressed when process changes are introduced in a company.
Organizations participating in the study take change management and people issues into
account to a limited degree when implementing process changes. The average PPI score on this
success factor was 3.1. The professional services and insurance industries registered a 3.8 for the
highest average score. The energy industry posted the lowest score of 2.3 in this category.
Total PPI Score
The cumulative PPI score for each participating company represents its Process Performance
Index. This serves as an overall measure of the process management environment in an
organization. It suggests how well an organization is managing its key business processes.
The average PPI Index for all research participants was 30.8 almost dead center on the
Process Performance Index scale that runs from 10 to 50. The insurance industry had the highest
PPI of 38.0, while the energy industry had the lowest of 26.7. [Refer to Appendix B for the
scores for each PPI success factor by industry.]

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The following diagram illustrates the average Process Performance Index for each industry and
compares each to the study average score of 30.8:
Average PPI Index by Industry
50.0
45.0
38.0

PPI Index

40.0

36.5

35.0
30.3
30.0

26.7

29.2

27.0

29.0

27.8

AVG

25.0
20.0
15.0
10.0
1
Energy

Financial Services

Healthcare

Insurance

Manufacturing

Professional Services

Retail

Other

Process Performance Index Analysis

An organizations overall Process Performance Index provides a snapshot of how well the
company is managing its key business processes. PPI Indexes can range from a minimum of
10 to a maximum of 50. A firms ranking on this scale suggests its business process
management maturity.
For purposes of the study, there are three stages of process management maturity:
(1) process management initiation; (2) process management evolution; and (3) process
management mastery.
1. Process Management Initiation
This is the initial stage of overall process management. It is characterized by organizations that
are neophytes to process and have a desire to learn more about managing their businesses via
their processes. Fortunately, there is usually a strong desire to learn more about process
management. Organizations in this stage often can achieve significant benefits by beginning to
focus on their business processes in a deliberate and disciplined manner. PPI Indexes ranging
from 10 to 25 points fall into this category.
2. Process Management Evolution
In this second stage of process management, organizations are process-aware and often have
instituted formal process improvement programs. In some cases, their process management is
maturing through the use of process and performance metrics. Process owners are usually
identified and internal improvement teams become dedicated resources. However, companies in

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this stage have not yet reached their full process management potential and are typically leaving
significant process money on the table. PPI Indexes of 26 to 40 points comprise this category.
3. Process Management Mastery
Business process management is a way of life for organizations in this final stage of process
maturity. Process owners are rewarded on the performance of their assigned processes.
Performance metrics are prolific throughout the organization and are focused on all three levels of
performance: organization, process and individual performer. Every employee in the
organization understands business processes and how they are the vehicle for delivering value
(goods and services) to their customers. In short, process management is fully integrated into the
organizations planning and overall performance evaluation. PPI Indexes of 41 to 50 points are
included in this category.
Analysis by Industry
All companies participating in the study fall into category twoProcess Management Evolution.
The insurance industry, ranked highest with its PPI Index of 38.0, is almost at the Process
Management Mastery level. The professional services industry is close with a PPI of 36.5. Both
industries are well above the studys overall PPI Index of 30.8 and are more process savvy than
the other sectors in the research.
In the middle of the pack are healthcare (30.3), manufacturing (29.2) and retail (29.0). All three
industries are slightly below the mean PPI Index of 30.8 and are clearly progressing through their
relative process development. While not yet Process Management Masters, they are making
conscious efforts toward process improvement and likely have process owners and some limited
metrics in place.
The remaining industries are appreciably below the studys average PPI Index of 30.8 and are in
the early stages of process management. The financial services industry recorded an overall
Index of 27.0, and the energy industry posted the lowest average PPI of 26.7. All remaining
industriesgrouped into the other categoryrealized 27.8 as their PPI. These industries are
barely beyond the initiation phase of process management in their organizations. They are
probably process aware, but most likely have only pockets of process success in their
organizations.
All companies in the study could benefitto varying degreesfrom applying some of the
following principles as they progress through their process management evolution:

Make conscious efforts to re-evaluate their process improvement programs during their
planning cycles
Ensure that their management team members are committed to process management
Verify that their process owners and improvement teams have the right tools and training
Identify the tangible and intangible deficiencies in their process management programs
Develop a solid plan to resolve these deficiencies in their current business plans

Current Critical Issues

Research participants were asked to identify the three most critical issues that their businesses
currently face. The way in which a company responds suggests where it is currently marshalling
its resources and focusing efforts to improve performance. In process-aware organizations,
process management efforts are typically aligned with such critical issues.

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Responses were quite varied and can be grouped into eight key categories of issues: strategic,
customer, environmental, product, process, people, technology and financial. Participant answers
are included in the following table. [Note: Numbers in parentheses after a particular response
indicate the relative frequency that answer was recorded. For example, a 3 after an answer
implies that answer was recorded three times as often as other responses in the same category.]

Strategy

Environment

Process

Technology

Achieving / managing growth (4)

Lack of vision
Marketplace identity
Shrinking marketplace
Expanding into new global markets
Acquisitions
Clear core competencies
Risk management
Capacity
Business continuity
General market conditions (4)
Competition (3)
Government regulations (3)
Supreme Court rulings
Discrimination
Improving process efficiencies (4)
Standardizing process improvement
approaches (2)
Discipline of process metrics (2)
Streamlining business processes (2)
Business processes, procedures,
organization
Poor "end-to-end" execution
Lack of improvement skills
Applying technology properly (2)
Systems integration (2)
Technology enhancements (2)
Speed of / resistance to technology
Matching technology resources to
business objectives
Lack of technical systems to manage
manufacturing

Customer

Declining customer base (2)

Attracting new customers
Customer alignment
Business development
Marketing

Product

New products and services

development (2)
Pipeline (product) growth
Developing new distribution
channels
Leadership development (5)
Upgrading skills of staff (4)
Retaining top talent (2)
"Right people in the right slot" (2)
Inexperienced staff (2)
Teamwork (2)
Cultural alignment
Changing workforce expectations
Managing change
Top line growth (5)
Cost management (3)
Increasing cash flow (2)
Profitable growth (2)
Pricing pressures
Margin management

People

Financial

Clearly, there are many issues U.S. organizations face in todays business environment. Of those
strategic in nature, achieving and managing growth is by far the largest challenge. In addition,
defining who the company is proves important as evidenced by such challenges as lack of
vision, the need to create identity in the marketplace, and development of clear core
competencies. Acquisitions and risk management are also on executive agendas.
There are some challenges from the environment in which most firms operate. Those most
prevalent are general market conditions, along with competition and government regulations.
These appear to neatly map to the financial issues in todays business world where top-line
revenue growth is paramount. Management of costs, as well as improved cash flow and
profitable growth, are also financial concerns. In addition, pricing pressures and shrinking
margins have grabbed the attention of corporate executives.

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Businesses recognize less in the way of challenges from the customer perspective. Of course,
attracting new customers, as well as retaining existing accounts, is important. However, to retain
and attract customers, it appears that companies are placing more emphasis on new product and
services development. Improved methods of product distribution also are being considered.
The all-important trifectapeople, processes and technologypresents challenges for
organizations today. From a process perspective, the most significant challenge is to improve
process efficiencies. Companies are focusing on this issue by looking to choose a standard
approach to process improvement. Additionally, some companies are concentrating on more
robust process management via the discipline of process metrics.
The set of challenges associated with people is intense. Organizations recognize leadership
development as the largest issue they face today with regard to human resources. Also,
upgrading the skills of existing staff and retaining key talent are issues confronting many
companies today. Managing change among differing workforce expectations and developing
alignment of company cultures remain important.
Finally, businesses today are facing many technology issues. The most pressing challenges are
integrating systems and ensuring that technology enhancements are properly applied. Also,
matching technology resources to business objectives remains a prime concern.

Opportunities to Improve Performance

Participants in the study were asked to identify the areas of greatest opportunity for improving
their companies performance over the next 618 months. The areas for greatest improvement
selected most by respondents are presented in the following diagram:

Critical Opportunities for Improvement

90.0%

% of Respondents

80.0%

Process Imprvmt

78.1%

Mgmt Devlpmt

70.0%

Culture Change

60.0%
50.0%
40.0%
30.0%

Sales / Chnl Mgt

43.8%

Software Solutions

40.6%

Alliances

34.4%
28.1%
21.9% 21.9%

20.0%

R&D / Prod Dev

18.8%

M, A & D
6.3%

10.0%

6.3%

Outsourcing
Other

0.0%

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Over 78% of participants identified process improvement as the greatest opportunity for
improving their organizations performance in the coming months. This is almost double the
response for any other category in the survey and supports the emphasis on process documented
by respondents.
Also in line with the critical people issues described previously, 43.8% of participating
companies noted management development as a key improvement area. Additionally, 40.6%
listed changing their organizations culture as a prime improvement opportunity.
Sales and channel management was identified as a performance improvement opportunity by
34.4% of participants. This is likely derived from the critical issues facing organizations today
related to top-line revenue growth as well as profitability.
From a technology perspective, 28.1% of respondents listed software solutions as a key area for
performance improvement over the next six to eighteen months. This aligns with the critical
issues of systems integration, technology enhancements and proper technology application.
Strategic alliances and product development were each recognized by 21.9% of companies in the
study as key improvement opportunities. Both are strong candidates for expanding a firms
marketplace and attracting new customers. More companies today are turning toward strategic
alliances with the right partners as a way to grow revenues and market share without significant
initial investment.
While merger, acquisition and divestiture activity has been down over the past few years, almost
one-fifth of respondents (18.8%) suggest their companies are looking to improve performance
through new acquisitions and/or divestitures.
Despite the current attention outsourcing is receiving as a way in which to quickly improve an
organizations performance, only 6.3% of study participants noted it as a viable option in the
coming months.
All remaining responses were grouped into an other category and represent 6.3% of
participants. While these responses were varied, customer and marketing development, as well as
communicating company vision, were particularly noted.

Application of Process Improvement Projects

Research participants were asked whether their organizations conduct formal process
improvement projects in the course of ongoing business. Formal process improvement projects
(PIPs) involve the evaluation of a selected process for inefficiencies and its subsequent redesign
for improved performance. Disciplined PIPs include three primary stages: project definition,
process analysis and process redesign. Performance metrics are developed to ensure the process
is formally monitored and maintains its newly planned level of performance. After that, the new
process is implemented and the resulting organizational change is managed effectively.

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The percentage of participating companies that conduct process improvement projects versus
those that do not is depicted in the following chart:

Do You Conduct Formal

Process Improvement Projects?

40.6%

Yes
No
59.4%

Six out of every ten companies in the survey sanction some form of process improvement
projects. For this majority, many cited significant challenges in conducting their PIPs.
The primary challenge noted was lack of time to adequately perform PIPs. Participants indicated
that substantial time was required to gather cross-functional teams and solve business process
problems. This has an impact on the ability to remain focused on project objectives. In addition,
the time necessary to complete the project was in conflict with the sense of urgency for business
results.
Management commitment to conducting process projects was registered as another challenge. A
lack of business ownership was often cited, as well as the lack of leadership ability to guide the
process change and be held accountable for results. This issue is exacerbated by the financial
aspect of projectsfor example, demonstrating there is acceptable bang for the buck.
The lack of a methodology for process improvement was identified as a key challenge by many
participants. This inconsistency in methods and metrics makes it difficult to conduct projects
cross-functionally and keep everyone involved on the same page. Companies indicated that the
lack of a disciplined approach across the organization created problems.
Implementation of the newly redesigned processes is another important challenge. Participants
noted that overall implementation and subsequent measurement of results are inconsistent. In
addition, there are often people issues related to education and compliance with the new process.
Furthermore, overall cultural issues and the management of change throughout the project are
also key challenges.

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Process Management Focus

Study participants were asked whether their organizations emphasize end to end management
of their business processes. End-to-end, or complete, business process management (BPM)
involves a holistic approach to managing enterprise workflows. The entire collection of
processes, both core and enabling, are managed as an adaptive system. Process owners are in
place and performance metrics are assigned at all three levels of performance (organizational,
process, individual performer) to monitor operating results. Companies with this holistic
approach tend to be the most process-savvy organizations.
The percentage of survey respondents who practice end-to-end business process management
throughout their organizations is illustrated below:

Do You Practice "End-to-End"

Process Management?

33.3%
Yes
No

66.7%

Only one out of every three companies exercises comprehensive business process management.
For this minority of organizations in the study, certain major challenges were noted.
The primary challenge to full BPM identified by most enterprises is the lack of a consistent
approach. Failure to utilize a standard tool kit and difficulty in staying on course were cited as
key issues. In addition, there is a shortage of proper analysis and subsequent monitoring of
results. Another problem area resulting from the lack of a solid methodology is inadequate
follow-through.
Lack of management commitment and focus were raised as sizable issues. Respondents noted
that true process management requires more time than their executives typically allow. Also, the
necessary buy-in and ownership at the senior level is often missing.
Technology and people issues were also identified as challenges. Participants stated that the
proper integration of systems is often ignored in their process management experiences.
Additionally, from a people perspective, difficulty in bridging the gap across the cultural divides
in their organizations often undermines their ability to execute full BPM.
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A final key challenge to business process management that is identified by the survey is the lack
of performance metrics. Metrics provide the means for measuring an organizations process
performance and ensuring that targeted business results are realized. Study participants noted that
the absence of a comprehensive metrics system complicated the process of cross-functional
management within their firms.

Conclusions
This field research project yielded some interesting insights into the application of process
management in U.S. firms today. Extrapolating from the study findings to companies in general,
the research suggests that American firms have embraced the idea of customer centricity. In
addition, their improvement efforts are well aligned with their business strategies. However, they
are mediocre at best in terms of (1) their overall process awareness among employees at all
levels, (2) success at prioritizing improvement initiatives, and (3) the ability to manage change in
their organizations. Furthermore, they are weak in their overall process management capabilities
as shown by their lack of a consistent approach to process improvement and bona fide
performance metrics.
This study suggests that, of the major industries in the U.S. today, the insurance and professional
services industries are furthest along in their process management evolution. The healthcare,
manufacturing and retail industries are steadily advancing in their process management journey.
However, the financial services, energy, non-profit and educational industries are barely beyond
their process management initiation.
Generalizing beyond this study, U.S. organizations are focused on corporate strategy as well as
on processes, people and technology issues. Managing overall growth and improving process
efficiencies are high on the list of challenges today. In addition, leadership development,
retention of talent, and matching technology with business objectives are important concerns.
Secondary issues, according to the study, involve customer acquisition and retention, new
product development, and related services.
When considering opportunities to improve their performance, the research implies that U.S.
companies rank process improvement more than twice as significant as any other initiative.
Management development and changing corporate culture, along with customer demand
management and technology solutions, are next identified as important options. Creating
strategic alliances with the right partner and developing new products are also recognized options.
However, business outsourcing and growth by mergers are not viewed as principal improvement
opportunities today.
The study findings suggest that six out of ten U.S. companies conduct some form of process
improvement projects. These efforts, however, often encounter certain challenges including lack
of management commitment and lack of sufficient time. Furthermore, most companies believe
their biggest challenges are the lack of a standard process management approach and poor
execution.
The research implies that only one out of every three U.S. organizations exercises comprehensive,
end-to-end business process management. A lack of a consistent methodology plus a shortage
of management commitment are the primary roadblocks. Another shortcoming is the absence of
solid performance metrics to monitor business results and help steer the management of change.
In general, while many U.S. companies exercise process improvement efforts, few actually
practice sustainable business process management.
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Appendix A
The Process Performance Index

Process Performance Index

Use this scorecard to evaluate your process management environment. Circle the number on each
5-point scale which best describes how your organization manages its key business processes.
1.

Alignment with strategy

Business processes are directly linked to the organizations strategy and critical success factors.
1

Strongly
Disagree

2.

Strongly
Agree

Holistic approach
Enterprise business processes are defined before launching improvement initiatives (e.g., Six Sigma).
1

Strongly
Disagree

3.

Process awareness by management and employees

Key players understand the role of process management in improving performance.
1

Strongly
Disagree

4.

5
Strongly
Agree

5
Strongly
Agree

Portfolio of process management initiatives

Improvement efforts are prioritized according to process health and linkage to current issues.
1

Strongly
Disagree

5.

Strongly
Agree

Process improvement methodology

Process management teams use a standard approach to navigate process analysis and design.
1

Strongly

Disagree

6.

Process metrics
Process performance is measured at the individual, process, and enterprise levels.
1

Strongly
Disagree

7.

Customer focus
Process analysis and design efforts focus on delivering value to the customer.
1

Process management
Process owners monitor process metrics and continuous improvement efforts on a regular basis.
1

5
Strongly
Agree

Information systems
Process is the master and information systems are the servants.
1

Strongly
Disagree

10.

5
Strongly
Agree

Strongly
Disagree

9.

5
Strongly
Agree

Strongly
Disagree

8.

5
Strongly
Agree

5
Strongly
Agree

Change management
People and cultural issues are effectively addressed when process changes are introduced.
1

Strongly
Disagree

5
Strongly
Agree

[Turn to reverse side for scoring.]

PPI Research Report

Rummler-Brache Group

Page 15

CONFIDENTIAL
2004

Appendix B
Average PPI Scores by Success Factor by Industry
The following table summarizes the score for each PPI success factor as well as the overall
Process Performance Index for each industry classification in the study:

PPI Scores
6
7
3.5 4.5

Industry
Insurance

1
4.5

2
3.8

3
3.8

4
3.8

5
2.8

Professional Services

4.3

3.5

3.8

3.5

3.3

3.5

Healthcare

3.3

2.7

3.0

2.7

2.0

Manufacturing

3.2

2.7

3.0

3.2

Retail

3.5

2.5

3.5

Other

3.5

2.0

Financial Services

3.3

Energy
Averages

PPI Research Report

Rummler-Brache Group

8
3.8

9
10
4.0 3.8

Total
38.0

4.7

3.8

3.8 3.8

36.5

3.7

4.0

3.0

3.3 2.7

30.3

2.3

2.6

3.9

2.7

2.9 2.8

29.2

3.0

2.0

2.0

4.5

2.5

2.5 3.0

29.0

2.5

3.0

2.0

2.0

3.5

2.5

3.3 3.5

27.8

2.3

2.7

2.0

3.0

3.3

4.0

2.0

1.7 2.7

27.0

2.7

2.7

3.0

2.7

2.3

2.3

3.3

2.7

2.7 2.3

26.7

3.5

2.8

3.1

3.0

2.5

2.8

4.0

2.9

3.1 3.1

30.8

Page 16

CONFIDENTIAL
2004