Organizational Performance Management: A Process Management Process Area at Maturity Level 5
Purpose
The purpose of Organizational Performance Management (OPM) is to proactively manage the organization’s performance to meet its business objectives.
Introductory Notes
The Organizational Performance Management process area enables the organization to manage organizational performance by iteratively analyzing aggregated project or work data, identifying gaps in performance against the business objectives, and selecting and deploying improvements to close the gaps.
In this process area, the term “improvement” includes all incremental and innovative process and technology improvements, including those improvements made to work environments. “Improvement” refers to all ideas that would change the organization’s processes, technologies, and performance to better meet the organization’s business objectives and associated quality and process performance objectives.
Business objectives that this process area might address include the following:
• Improved product quality (e.g., functionality, quality attributes)
• Increased productivity
• Increased process efficiency and effectiveness
• Increased consistency in meeting budget and schedule
• Decreased cycle time
• Greater customer and end-user satisfaction
• Shorter development or production time to change functionality, add new features, or adapt to new technologies
• Improved performance of a supply chain involving multiple suppliers
• Improved use of resources across the organization
The organization analyzes product and process performance data from the work to determine if it is capable of meeting the quality and process performance objectives. Process performance baselines and process performance models, developed using Organizational Process Performance processes, are used as part of the analysis. Causal Analysis and Resolution processes can also be used to identify potential areas of improvement or specific improvement proposals.
The organization identifies and proactively solicits incremental and innovative improvements from within the organization and from external sources such as academia, competitive intelligence, and successful improvements implemented elsewhere.
Realization of the improvements and their effects on the quality and process performance objectives depends on being able to effectively identify, evaluate, implement, and deploy improvements to the organization’s processes and technologies.
Realization of the improvements and beneficial effects also depends on engaging the workforce in identifying and evaluating possible improvements and maintaining a focus on long-term planning that includes the identification of innovations.
Improvement proposals are evaluated and validated for their effectiveness in the target environment. Based on this evaluation, improvements are prioritized and selected for deployment to new and ongoing work. Deployment is managed in accordance with the deployment plan and performance data are analyzed using statistical and other quantitative techniques to determine the effects of the improvement on quality and process performance objectives.
This improvement cycle continually optimizes organizational processes based on quality and process performance objectives. Business objectives are periodically reviewed to ensure they are current and quality and process performance objectives are updated as appropriate.
The Organizational Process Focus process area includes no assumptions about the quantitative basis for identifying improvements, nor their expected results. This process area extends the Organizational Process Focus practices by focusing on process improvement based on a quantitative understanding of the organization’s set of standard processes and technologies and their expected quality and process performance.
The specific practices of this process area apply to organizations whose work is quantitatively managed. Use of the specific practices of this process area can add value in other situations, but the results may not provide the same degree of impact to the organization’s quality and process performance objectives.
Related Process Areas
Refer to the Causal Analysis and Resolution process area for more information about identifying causes of selected outcomes and taking action to improve process performance.
Refer to the Decision Analysis and Resolution process area for more information about analyzing possible decisions using a formal evaluation process that evaluates identified alternatives against established criteria.
Refer to the Measurement and Analysis process area for more information about aligning measurement and analysis activities and providing measurement results.
Refer to the Organizational Process Focus process area for more information about planning, implementing, and deploying organizational process improvements based on a thorough understanding of current strengths and weaknesses of the organization’s processes and process assets.
Refer to the Organizational Process Performance process area for more information about establishing quality and process performance objectives and establishing process performance baselines and models.
Refer to the Organizational Training process area for more information about providing training.
Specific Practices by Goal
SG 1 Manage Business Performance
The organization’s business performance is managed using statistical and other quantitative techniques to understand process performance shortfalls, and to identify areas for process improvement.
Managing business performance requires the following:
• Maintaining the organization’s business objectives
• Understanding the organization’s ability to meet the business objectives
• Continually improving processes related to achieving the business objectives
The organization uses defined process performance baselines to determine if the current and projected organizational business objectives are being met. Shortfalls in process performance are identified and analyzed to determine potential areas for process improvement.
Refer to the Organizational Process Performance process area for more information about establishing performance baselines and models.
As the organization improves its process performance or as business strategies change, new business objectives are identified and associated quality and process performance objectives are derived.
Specific goal 2 addresses eliciting and analyzing improvement suggestions that address shortfalls in achieving quality and process performance objectives.
SP 1.1 Maintain Business Objectives
Maintain business objectives based on an understanding of business strategies and actual performance results.
Organizational performance data, characterized by process performance baselines, are used to evaluate whether business objectives are realistic and aligned with business strategies. After business objectives have been revised and prioritized by senior management, quality and process performance objectives may need to be created or maintained and re-communicated.
Example Work Products
1. Revised business objectives
2. Revised quality and process performance objectives
3. Senior management approval of revised business objectives and quality and process performance objectives
4. Communication of all revised objectives
5. Updated process performance measures
Subpractices
1. Evaluate business objectives periodically to ensure they are aligned with business strategies.
Senior management is responsible for understanding the marketplace, establishing business strategies, and establishing business objectives.
Because business strategies and organizational performance evolve, business objectives should be reviewed periodically to determine whether they should be updated. For example, a business objective might be retired when process performance data show that the business objective is being met consistently over time or when the associated business strategy has changed.
2. Compare business objectives with actual process performance results to ensure they are realistic.
Business objectives can set the bar too high to motivate real improvement. Using process performance baselines helps balance desires and reality.
If process performance baselines are unavailable, sampling techniques can be used to develop a quantitative basis for comparison in a short period of time.
3. Prioritize business objectives based on documented criteria, such as the ability to win new business, retain existing clients, or accomplish other key business strategies.
4. Maintain quality and process performance objectives to address changes in business objectives.
Business objectives and quality and process performance objectives will typically evolve over time. As existing objectives are achieved, they will be monitored to ensure they continue to be met, while new business objectives and associated quality and process performance objectives are identified and managed.
Refer to the Organizational Process Performance process area for more information about establishing quality and process performance objectives.
5. Revise process performance measures to align with quality and process performance objectives.
Refer to the Organizational Process Performance process area for more information about establishing process performance measures.
SP 1.2 Analyze Process Performance Data
Analyze process performance data to determine the organization’s ability to meet identified business objectives.
The data that result from applying the process performance measures, which are defined using Organizational Process Performance processes, are analyzed to create process performance baselines that help in understanding the current capability of the organization. Comparing process performance baselines to quality and process performance objectives helps the organization to determine its ability to meet business objectives. This data typically are collected from work group or project level process performance data to enable organizational analysis.
Example Work Products
1. Analysis of current capability vs. business objectives
2. Process performance shortfalls
3. Risks associated with meeting business objectives
Subpractices
1. Periodically compare quality and process performance objectives to current process performance baselines to evaluate the ability of the organization to meet its business objectives.
For example, if cycle time is a critical business need, many different cycle time measures may be collected by the organization. Overall cycle time performance data should be compared to the business objectives to understand if expected performance will satisfy business objectives.
2. Identify shortfalls where the actual process performance is not satisfying the business objectives.
3. Identify and analyze risks associated with not meeting business objectives.
4. Report results of the process performance and risk analyses to organizational leadership.
SP 1.3 Identify Potential Areas for Improvement
Identify potential areas for improvement that could contribute to meeting business objectives.
Potential areas for improvement are identified through a proactive analysis to determine areas that could address process performance shortfalls. Causal Analysis and Resolution processes can be used to diagnose and resolve root causes.
The output from this activity is used to evaluate and prioritize potential improvements, and can result in either incremental or innovative improvement suggestions as described in specific goal 2.
Example Work Products
1. Potential areas for improvement
Subpractices
1. Identify potential improvement areas based on the analysis of process performance shortfalls.
Performance shortfalls include not meeting productivity, cycle time, or customer satisfaction objectives. Examples of areas to consider for improvement include product technology, process technology, staffing and staff development, team structures, supplier selection and management, and other organizational infrastructures.
2. Document the rationale for the potential improvement areas, including references to applicable business objectives and process performance data.
3. Document anticipated costs and benefits associated with addressing potential improvement areas.
4. Communicate the set of potential improvement areas for further evaluation, prioritization, and use.
SG 2 Select Improvements
Improvements are proactively identified, evaluated using statistical and other quantitative techniques, and selected for deployment based on their contribution to meeting quality and process performance objectives.
Improvements to be deployed across the organization are selected from improvement suggestions which have been evaluated for effectiveness in the target deployment environment. These improvement suggestions are elicited and submitted from across the organization to address the improvement areas identified in specific goal 1.
Evaluations of improvement suggestions are based on the following:
• A quantitative understanding of the organization’s current quality and process performance
• Satisfaction of the organization’s quality and process performance objectives
• Estimated costs and impacts of developing and deploying the improvements, resources, and funding available for deployment
• Estimated benefits in quality and process performance resulting from deploying the improvements
SP 2.1 Elicit Suggested Improvements
Elicit and categorize suggested improvements.
This practice focuses on eliciting suggested improvements and includes categorizing suggested improvements as incremental or innovative.
Incremental improvements generally originate with those who do the work (i.e., users of the process or technology). Incremental improvements can be simple and inexpensive to implement and deploy. Incremental improvement suggestions are analyzed, but, if selected, may not need rigorous validation or piloting. Innovative improvements such as new or redesigned processes are more transformational than incremental improvements.
Innovative improvements often arise out of a systematic search for solutions to particular performance issues or opportunities to improve performance. They are identified by those who are trained and experienced with the maturation of particular technologies or whose job it is to track or directly contribute to increased performance.
Innovations can be found externally by actively monitoring innovations used in other organizations or documented in the research literature. Innovations can also be found by looking internally (e.g., by examining project lessons learned). Innovations are inspired by the need to achieve quality and process performance objectives, the need to improve performance baselines, or the external business environment.
Some suggested improvements may be received in the form of a proposal (e.g., an organizational improvement proposal arising from a causal analysis and resolution activity). These suggested improvements will have been analyzed and documented prior to input to Organizational Performance Management processes. When suggested improvements are received as proposals, the proposals are reviewed for completeness and are evaluated as part of the selection process for implementation.
Improvement searches can involve looking outside the organization, deriving innovations from work groups using Causal Analysis and Resolution processes, using competitive business intelligence, or analyzing existing organizational performance.
Example Work Products
1. Suggested incremental improvements
2. Suggested innovative improvements
Subpractices
1. Elicit suggested improvements.
These suggestions document potential improvements to processes and technologies. Managers and staff in the organization as well as customers, end users, and suppliers can submit suggestions. The organization can also search the academic and technology communities for suggested improvements. Some suggested improvements may have been implemented at the work group or project level before being proposed for the organization.
Refer to the Organizational Process Focus process area for more information about deploying organizational process assets and incorporating experiences.
2. Identify suggested improvements as incremental or innovative.
3. Investigate innovative improvements that may improve the organization’s processes and technologies.
SP 2.2 Analyze Suggested Improvements
Analyze suggested improvements for their possible impact on achieving the organization’s quality and process performance objectives.
Suggested improvements are incremental and innovative improvements that are analyzed and possibly selected for validation, implementation, and deployment throughout the organization.
Example Work Products
1. Suggested improvement proposals
2. Selected improvements to be validated
Subpractices
1. Analyze the costs and benefits of suggested improvements.
Process performance models provide insight into the effect of process changes on process capability and performance.
Refer to the Organizational Process Performance process area for more information about establishing process performance models.
Improvement suggestions that have a large cost-to-benefit ratio or that would not improve the organization’s processes may be rejected.
2. Identify potential barriers and risks to deploying each suggested improvement.
3. Estimate the cost, effort, and schedule required for implementing, verifying, and deploying each suggested improvement.
4. Select suggested improvements for validation and possible implementation and deployment based on the evaluations.
Refer to the Decision Analysis and Resolution process area for more information about analyzing possible decisions using a formal evaluation process that evaluates identified alternatives against established criteria.
5. Document the evaluation results of each selected improvement suggestion in an improvement proposal.
The proposal should include a problem statement, a plan (including cost and schedule, risk handling, method for evaluating effectiveness in the target environment) for implementing the improvement, and quantitative success criteria for evaluating actual results of the deployment.
6. Determine the detailed changes needed to implement the improvement and document them in the improvement proposal.
7. Determine the validation method that will be used before broad-scale deployment of the change and document it in the improvement proposal.
Determining the validation method includes defining the quantitative success criteria that will be used to evaluate results of the validation.
Since innovations, by definition, represent a major change with high impact, most innovative improvements will be piloted. Other validation methods, including modeling and simulation can be used as appropriate.
8. Document results of the selection process.
SP 2.3 Validate Improvements
Validate selected improvements.
Selected improvements are validated in accordance with their improvement proposals.
Pilots can be conducted to evaluate significant changes involving untried, high-risk, or innovative improvements before they are broadly deployed. Not all improvements need the rigor of a pilot. Criteria for selecting improvements for piloting are defined and used. Factors such as risk, transformational nature of change, or number of functional areas affected will determine the need for a pilot of the improvement.
Red-lined or rough-draft process documentation can be made available for use in piloting.
Example Work Products
1. Validation plans
2. Validation evaluation reports
3. Documented lessons learned from validation
Subpractices
1. Plan the validation.
Quantitative success criteria documented in the improvement proposal can be useful when planning validation.
Validation plans for selected improvements to be piloted should include target work groups, work characteristics, a schedule for reporting results, and measurement activities
2. Review and get relevant stakeholder agreement on validation plans.
3. Consult with and assist those who perform the validation.
4. Create a trial implementation, in accordance with the validation plan, for selected improvements to be piloted.
5. Perform each validation in an environment that is similar to the environment present in a broad scale deployment.
6. Track validation against validation plans.
7. Review and document the results of validation.
Validation results are evaluated using the quantitative criteria defined in the improvement proposal.
SP 2.4 Select and Implement Improvements for Deployment
Select and implement improvements for deployment throughout the organization based on an evaluation of costs, benefits, and other factors.
Selection of suggested improvements for deployment is based on cost-to-benefit ratios with regard to quality and process performance objectives, available resources, and the results of improvement proposal evaluation and validation activities.
Refer to the Decision Analysis and Resolution process area for more information about analyzing possible decisions using a formal evaluation process that evaluates identified alternatives against established criteria.
Example Work Products
1. Improvements selected for deployment
2. Updated process documentation and training
Subpractices
1. Prioritize improvements for deployment.
The priority of an improvement is based on an evaluation of its estimated cost-to-benefit ratio with regard to the quality and process performance objectives as compared to the performance baselines. Return on investment can be used as a basis of comparison.
2. Select improvements to be deployed.
Selection of improvements to be deployed is based on their priorities, available resources, and results of improvement proposal evaluation and validation activities.
3. Determine how to deploy each improvement.
4. Document results of the selection process.
5. Review any changes needed to implement the improvements.
6. Update the organizational process assets.
Refer to the Organizational Process Definition process area for more information about establishing organizational process assets.
SG 3 Deploy Improvements
Measurable improvements to the organization’s processes and technologies are deployed and evaluated using statistical and other quantitative techniques.
Once improvements are selected for deployment, a plan for deployment is created and executed. The deployment of improvements is managed and the effects of the improvements are measured and evaluated as to how well they contribute to meeting quality and process performance objectives.
If the deployed improvement involves significant changes to a service system, then the deployment will probably include practices required for Service System Transition.
Refer to the Service System Transition process area for more information about deploying service system components.
SP 3.1 Plan the Deployment
Establish and maintain plans for deploying selected improvements.
The plans for deploying selected improvements can be included in the plan for organizational performance management, in improvement proposals, or in separate deployment documents.
This specific practice complements the Deploy Organizational Process Assets specific practice in the Organizational Process Focus process area and adds the use of quantitative data to guide the deployment and to determine the value of improvements.
Refer to the Organizational Process Focus process area for more information about deploying organizational process assets and incorporating experiences.
Example Work Products
1. Deployment plans for selected improvements
Subpractices
1. Determine how each improvement should be adjusted for deployment.
Improvements identified in a limited context (e.g., for a single improvement proposal) might need to be modified for a selected portion of the organization.
2. Identify strategies that address the potential barriers to deploying each improvement that were defined in the improvement proposals.
3. Identify the target work activities for deployment of the improvement.
Not all work activities are good candidates for all improvements. For example, improvements may be targeted to software only projects, COTS integration projects, or service delivery work.
4. Establish measures and objectives for determining the value of each improvement with respect to the organization’s quality and process performance objectives.
Measures can be based on the quantitative success criteria documented in the improvement proposal or derived from organizational objectives.
Refer to the Measurement and Analysis process area for more information about aligning measurement and analysis activities and providing measurement results.
5. Document the plans for deploying selected improvements.
The deployment plans should include relevant stakeholders, risk strategies, target work activities, measures of success, and schedule.
6. Review and get agreement with relevant stakeholders on the plans for deploying selected improvements.
Relevant stakeholders include the improvement sponsor, target work groups, support organizations, etc.
7. Revise the plans for deploying selected improvements as necessary.
SP 3.2 Manage the Deployment
Manage the deployment of selected improvements.
This specific practice can overlap with the Implement Action Proposals specific practice in the Causal Analysis and Resolution process area (e.g., when causal analysis and resolution is used organizationally or across multiple work groups).
Example Work Products
1. Updated training materials (to reflect deployed improvements)
2. Documented results of improvement deployment activities
3. Revised improvement measures, objectives, priorities, and deployment plans
Subpractices
1. Monitor the deployment of improvements using deployment plans.
2. Coordinate the deployment of improvements across the organization.
Coordinating deployment includes the following activities:
• Coordinating activities of work groups, support groups, and organizational groups for each improvement
• Coordinating activities for deploying related improvements
3. Deploy improvements in a controlled and disciplined manner.
4. Coordinate the deployment of improvements into the defined processes for the work as appropriate.
Refer to the Organizational Process Focus process area for more information about deploying organizational process assets and incorporating experiences.
5. Provide consulting as appropriate to support deployment of improvements.
6. Provide updated training materials or develop communication packages to reflect improvements to organizational process assets.
Refer to the Organizational Training process area for more information about providing training.
7. Confirm that the deployment of all improvements is completed in accordance with the deployment plan.
8. Document and review results of improvement deployment.
SP 3.3 Evaluate Improvement Effects
Evaluate the effects of deployed improvements on quality and process performance using statistical and other quantitative techniques.
Refer to the Measurement and Analysis process area for more information about aligning measurement and analysis activities and providing measurement results.
This specific practice can overlap with the Evaluate the Effect of Implemented Actions specific practice in the Causal Analysis and Resolution process area (e.g., when causal analysis and resolution is applied organizationally or across multiple work groups).
Example Work Products
1. Documented measures of the effects resulting from deployed improvements
Subpractices
1. Measure the results of each improvement as implemented on the target work activities, using the measures defined in the deployment plans.
2. Measure and analyze progress toward achieving the organization’s quality and process performance objectives using statistical and other quantitative techniques and take corrective action as needed.
Refer to the Organizational Process Performance process area for more information about establishing quality and process performance objectives and establishing process performance baselines and models.