Estimating performance from capabilities in business process improvement

The research indicates there is a positive link between the improvement capability of an organisation and the intensity of effort applied to a business process improvement (BPI) project or initiative. While a degree of stochastic variation in applied effort to any particular improvement project may be expected there is a clear need to quantify the causal relationship, to assist management decision, and to enhance the chance of achieving and sustaining the expected improvement targets. The paper aims to discuss these issues.

The paper presents a method to obtain the function that estimates the range of applicable effort an organisation can expect to be able to apply based on their current improvement capability. The method used analysed published data as well as regression analysis of new data points obtained from completed process improvement projects.

The level of effort available to be applied to a process improvement project can be expressed as a regression function expressing the possible range of achievable BPI performance within 90 per cent confidence limits.

The data set applied by this research is limited due to constraints during the research project. A more accurate function can be obtained with more industry data.

When the described function is combined with a separate non-linear function of performance gain vs effort a model of performance gain for a process improvement project as a function of organisational improvement capability is obtained. The probability of success in achieving performance targets may be estimated for a process improvement project.

The method developed in this research is novel and unique and has the potential to be applied to assessing an organisation’s capability to manage change.