How to Measure Transformation Success

Abstract

In this chapter we explain a process which delivers selection of measurement aligned to your business goals. We start on how to identify what is important to measure in your business model and end in examples of measures exposing performance to shareholders. We explain how to distinguish what market needs from firm chooses to address and then measure. We bring “house of value” as example how to build on business strategy the functional strategy and then link to processes which generate value. We bring six supply chain driver objectives linked to measures for functional and innovative type of supply chain; this helps us understand how business strategy can be translated to supply chain metrics. Once we know that, we move to hints about how to define metrics for process levels. Finally we come with explanation of purpose, timeliness, and level in process measurement. We have seen often a misuse of those in performance measurement system in many companies. We break down process measurement into three coexisting measurement dimensions, e.g., effectiveness, efficiency, and adherence. We illustrate with examples measurement of effectiveness, efficiency, and adherence. Last but not least, we bring examples how you could and should link your measurement system to bigger picture, enabling shareholders to understand overall business performance.