Business Process is a hot topic at the moment. Depending on who you talk with, Business Process can include business performance management, business intelligence and executive dashboards, the creation of a business process architecture, process redesign and improvement, six sigma and lean, as well as a host of business process management software systems.

Surveys typically find that senior executives are not very happy with the way their organizations implement their corporate strategies. If you ask, senior managers will consistently say that one of the things they hope to get from BPM is an improved way of measuring corporate performance. If you look at most BPM methodologies, however, you will find them long on redesign and improvement techniques and on business process architecture concepts but surprisingly short on performance measurement.

Most business process redesign or improvement programs talk about the importance of measurements. Some projects, especially those led by Six Sigma practitioners, gather lots of data on process performance. Unfortunately, most of these measurement efforts are project focused. They start with the process and measure improvements in the process. They sometimes relate metrics to measures of customer satisfaction, but they very rarely show how the process measures are actually aligned with the organization’s goals and strategies. In other words, most organizations do not have a systematic way of tying specific measures derived from a particular process to the overall goals or strategies of the company. Nor is there a systematic effort to gather measures on all processes in the organization that could enable comparisons between changes in one process and changes in related processes.

This situation is about to reach crisis proportions within the BPM community as companies increasingly adopt BPM software products that are capable of automatically gathering process measures and transmitting them to executive dashboards. During the past year, many of the leading BPM software companies have announced acquisitions of Business Intelligence firms. Those acquisitions are predicated on the assumption that companies will use these capabilities to report metrics to executives, and then provide those executives with advice about trends that can guide executive decisions. It will be ironic if the BPM vendors acquire a lot of fancy technology and then can’t offer their clients a systematic approach to determining what process measures their fancy tools should actually monitor and report.

The approach to corporate performance measurement that has been most widely adopted over the past decade derives from Robert Kaplan and David Norton’s work on Balanced Scorecards, which they initially defined in the Harvard Business Review in the early 1990s. In their original articles and subsequent books, Kaplan and Norton focused on helping organization’s broaden the number of things they measured. The “Balanced Scorecard,” as conceived by Kaplan and Norton, was a grid that considered Financial, Customer, Operational, and Learning and Growth measures. As they developed their ideas over the course of the past decade, Kaplan and Norton have increasingly sought to tie their Balanced Scorecard measures to an organization’s strategic goals. Kaplan and Norton now speak of Strategy Maps and seek to derive measures from a hierarchy of business activities.

Many organizations have explored the Balanced Scorecard approach; some with notable success. Unfortunately, most organizations have used the Balanced Scorecard to reinforce their existing organizational structures. Thus, organizations begin by creating a corporate scorecard. The goals and measures defined on the corporate scorecard are then delegated to divisional or departmental scorecards, and then, in top-down fashion, to subdivisions or functional units within departments. In too many organizations, scorecards have served to reinforce the departmental silos and management practices that are so detrimental to effective organizational performance.

Thus, in 2004, I was happy to discover Praveen Gupta’s book, Six Sigma Business Scorecard. This book presented scorecards from a process perspective, explicitly typing scorecards to business processes. It also extended the four measurement categories, as many other scorecard users have done, to a more extensive set of measures, including Leadership and Profitability, Management and Improvement, Employees and Innovation, Purchasing and Supplier Management, Operational Execution, Sales and Distribution, and Service and Growth. Six Sigma Business Scorecard initiated a very fruitful dialog within the business process community and has led a number of business process gurus to see how a scorecard approach can provide business process developers with a more systematic way of generating and maintaining an enterprise-wide process/performance measurement system.

While business process people have become more excited about the potential of scorecard systems, Praveen Gupta has continued to think about the challenges of aligning process measures with strategies and with corporate performance systems. In Service Scorecard Gupta has joined with Rajesh Tyagi to move from a Six Sigma focused view of scorecards to a broader view of processes. At the same time, reflecting a growing recognition among process practitioners that service processes are different from manufacturing processes, Gupta and Tyagi have written a new book that extends the scorecard concept, while simultaneously focusing it on the concerns of service business organizations.

As a generalization, manufacturing businesses generate products, which are then packaged and delivered to customers. Service businesses don’t so much create products as they create customer experiences. The actual “product” they deliver is modified as it is delivered, consisting, as it does, of interactions between the customer and the company employees engaged in providing the service. Obviously this isn’t a sharp distinction, but it is an important one and it results in particular challenges for business executives who seek to measure the success of service-oriented business efforts. Many books have been written on the problems of measuring manufacturing processes. It’s refreshing to find a book that focuses on the problems of monitoring and measuring the activities of organizations that focus on providing services.

Service Scorecard starts with the sevenfold scorecard that Gupta developed in Six Sigma Business Scorecard and refines it to support an organization that is trying to measure and organize its service processes. This new book clearly reflects Gupta and Tyagi’s experience over the past few years and provides lots of very practical advice on how to organize corporate scorecard development efforts. At the same time, they devote specific attention to how one can organize measures to predict business trends.

This is an important book that appears at a critical time in the development of corporate business process management efforts. It suggests a practical way to meld process management and performance measures into a well-aligned system. It provides BPM practitioners with a way to conceptualize how their efforts can support business strategies. This book shows you how Business Process Management will evolve into the next phase by merging business processes, performance measures, and management evaluations into a seamless whole. Thus, this is a book that everyone involved in process work or performance measurement should read.