In 2006 the Babson Process Management Research Center defined Strategic Alignment as the continual tight linkage of organizational priorities and enterprise processes, enabling achievement of business goals. Phrased differently this means linking strategy goals to operational goals and linking operational goals to process goals. This equates to defining a method for improving alignment among the organization’s performance measures, strategic plans, improvement projects, and budgets. It assumes that the organization employs a method for defining its business strategy such as a Balanced Scorecard (BSC). Using the BSC as an example one must first examine it to determine how BPM can be integrated into the BSC approach. BPM specifically focuses on improving the Internal Quadrant of the BSC. The Balanced Scorecard approach does the following:
Once the strategic thinking and necessary actions are determined, annual program plans, projects and service level agreements can be developed and translated into budget requests.
WHAT STEPS ARE INVOLVED TO INTEGRATE BPM INTO BSC?
One must first assess the artifacts from the BSC. Questions to ask include:
One must then assess the BSC using criteria defined by the Balanced Scorecard Institute and add a process focus to the BSC. Examples of adding a process focus to the four quadrants in the BSC are:
Next, you connect objectives from a bottom-up perspective (i.e. Learning & Growth to Internal to Customer to Financial) showing a cause-and-effect linkage. An example of a cause-and-effect linkage would be stated as follows.
“If we improve the skills of our operating employees, then we can achieve shorter cycle times and higher quality of our internal processes. If we reduce process cycle time and improve process quality, then we can improve the percentage of on-time delivery. If we improve the percentage of on-time delivery, then we can increase the number of loyal customers. If we increase the number of loyal customers, then we can increase the number of sales from repeat customers. If we increase the number of sales from repeat customers, then we can lower the cost of sales and increase the return on sales.”
Achieving a tight linkage requires one to focus on measures. One must identify business performance measures for both leading and lagging indicators. Then you should review benchmarking data, established baselines, and current business targets. Once that is done you map key business processes to the strategic objectives and measures. Mapping the objectives to business processes rather than to departments increases the process-focus and end-to-end process thinking. For those key business processes, establish process measures (time, quality, cost & productivity) for both leading and lagging indicators. You then align the business performance measures with process-level measures. This marks the end of the alignment effort.
Once the metrics are aligned at all levels, process improvement projects can be identified and one can oversee and assess the projects:
The challenge for realizing any business strategy is to cascade it deeply into an organization so that weekly and monthly operations support that strategy. One must also have a monthly review so that any deviations can be caught in time to make corrections. A process-focused business strategy enables one to achieve such a realization.