I had written a blog a few weeks ago on the importance of Metrics and KPIs for BPM initiatives. The applicability of this could be seen in the recently released 2012 BPM Global Survey by Capgemini, in which it was disclosed that 61% of respondents either did not capture, or were unaware if ROI metrics were captured as part of their BPM initiatives! And therein lies the KPI riddle, though the vast majority of stakeholders realize the importance of capturing and measuring KPIs, but the uptake in practice, is very poor. The original blog had captured some potential reasons and best practices for overcoming these roadblocks. The global survey however made me relook at this and see what other reasons could be causing this disconnect. It then struck me that one of the key issues is the question of incentives.
So how do incentives play a part? If we take a look at the sponsorship of a BPM initiative, it is often seem that a process owner may inflate the potential benefits of implementing BPM (by setting ambitious KPI targets), in order to gain the required funding. But often the incentives post-implementation neither clearly rewards those people whose projects are a success nor penalizes those whose projects fail to meet the mark. Post-project KPI tracking (as compared to the original estimates) therefore falls by the wayside, because there are no incentives to showcase the same.
Also are process owners the best experts to define the KPI targets post-implementation? Research has shown that so-called experts often greatly overestimate their own skills; and their forecasts are hardly more accurate than a layman’s. So how best to overcome these challenges? One solution may be taking it to a wider audience; involving more stakeholders - people on-the-ground involved in the process; those suppliers, partners and customers who face these processes on a daily basis. But then the question arises of how best to capture their inputs and that’s where prediction markets come in. Prediction markets are simply a market created purely for the purpose of making predictions, where people stake their money, on the likeliest outcomes.
A modified prediction market (without real money being staked) could be established to gauge where various stakeholders feel the best place to apply BPM would be. Rewards could be defined for those who do well in the prediction market. The introduction of such an initiative would have a number of positive impacts
- Prioritization - Would help business sponsors in helping to allocate funds across competing needs Accuracy: By having more people involved in defining target KPIs are likely to be more accurate predictions
- Gamification – By virtue of having relevant stakeholders in the prediction market, it involves people in a much fuller way. People would be more interested in measuring KPIs and how they compare with targets. Rewards can also be linked to people’s performance in the prediction market
- Extension – Prediction market could also be extended to help then track the project progress. It has been noted that anonymous prediction markets, driven by project team members, often provide a more realistic track of project progress than the dreaded status report with their multi-coloured indicators
Prediction markets are a powerful tool, and so is the idea of involving a wider audience in BPM initiatives. Bringing the two together in a creative way, can help redefine the way KPIs are set and measured, and help businesses understand the true value of BPM.