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Sample Cost of Quality Calculations

Calculating the cost of quality is a tricky task. This article offers example calculations and perspectives from other organizations attempting to quantify the value of quality within their businesses.

Type: Benchmarks and Metrics  Topics: Quality Control, Business Excellence, Quality, Measurement, Measurement, Quality Assessment, Quality Measurement  Processes: 1.1.3.2 Create baselines for current processes, 1.1 Define the business concept and long-term vision, 1.1.3 Perform internal analysis, 1.1.3.3 Analyze systems and technology, 1.3.4 Establish high-level measures, 1.0 Develop Vision and Strategy, 1.3 Manage strategic initiatives, 12.1.1.1 Establish performance measures, 12.1 Create and manage organizational performance strategy, 12.1.1 Create enterprise measurement systems model, 12.1.1.2 Establish performance monitoring frequency, 12.1.1.3 Set performance targets, 12.2.1 Conduct performance assessments, 12.0 Manage Knowledge, Improvement, and Change, 12.2 Benchmark performance, 4.1.9 Develop quality standards and procedures, 4.0 Deliver Products and Services, 4.1 Plan for and acquire necessary resources (Supply Chain Planning), 4.2.4.4 Monitor quality of product delivered, 4.2 Procure materials and services, 4.2.4 Appraise and develop suppliers, 4.4.4 Ensure quality of service, 4.4 Deliver service to customer  Industry: Aerospace, Computers, Construction, Electronics, Machinery, Machinery Equipment, Mining, Non-Profit, Research Organization, Semiconductors, Service (General) 
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Focus Quality Measures on Value-Added Activities and Core Strategic Objectives

Organizations can measure everything under the sun, but if those measures aren't focused on value-added activities and strategic objectives, the organization may not get the return on investment it desires.

Type: Best Practices and Business Drivers  Topics: Quality Control, Business Excellence, Quality, Strategic Planning, Organization and Management, Measurement, Measurement, Quality Assessment, Quality Measurement  Processes: 1.1.3.2 Create baselines for current processes, 1.1 Define the business concept and long-term vision, 1.1.3 Perform internal analysis, 1.1.3.3 Analyze systems and technology, 1.1.4.1 Align stakeholders around strategic vision, 1.1.4 Establish strategic vision, 1.2.4 Coordinate and align functional and process strategies, 1.0 Develop Vision and Strategy, 1.2 Develop business strategy, 1.3.4 Establish high-level measures, 1.3 Manage strategic initiatives, 12.1.1.1 Establish performance measures, 12.1 Create and manage organizational performance strategy, 12.1.1 Create enterprise measurement systems model, 12.1.1.2 Establish performance monitoring frequency, 12.1.1.3 Set performance targets, 12.2.1 Conduct performance assessments, 12.0 Manage Knowledge, Improvement, and Change, 12.2 Benchmark performance, 12.4.2.6 Establish metrics, 12.4 Manage change, 12.4.2 Design the change, 12.4.3.4 Monitor change, 12.4.3 Implement change, 12.4.4.1 Monitor improved process performance, 12.4.4 Sustain improvement  Industry: Computers, Construction, Electronics, Machinery, Machinery Equipment, Mining, Non-Profit, Research Organization, Semiconductors 
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Simplifying the Decision to Centralize

The decision to centralize is often a dilemma for senior management, and some wonder if centralization is worth the effort.

Type: Articles and White Papers  Topics: Business Excellence, Continuous Improvement, Process, Performance Management, Finance and Accounting  Processes: 1.2 Develop business strategy, 1.0 Develop Vision and Strategy, 1.3 Manage strategic initiatives, 8.0 Manage Financial Resources, 8.6.1.8 Process payments, 8.6 Process accounts payable and expense reimbursements, 8.6.1 Process accounts payable 
  • Relevance: 58%
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Setting Goals for Process Framework Implementation

Implementing a process framework entails much more than the initial design and roll-out. Organizations need to assess their current capabilities related to the framework and set reasonable goals for future success.

Type: Best Practices and Business Drivers  Topics: Business Process Management (BPM), Business Excellence, Process, Strategic Planning, Organization and Management, Measurement, Measurement, Process Management, Organization Structures  Processes: 1.1.3.1 Analyze organizational characteristics, 1.1 Define the business concept and long-term vision, 1.1.3 Perform internal analysis, 1.1.3.5 Identify enterprise core competencies, 1.2.4 Coordinate and align functional and process strategies, 1.0 Develop Vision and Strategy, 1.2 Develop business strategy, 1.2.5 Create organizational design (structure, governance, reporting, etc.), 1.3.2 Evaluate strategic initiatives, 1.3 Manage strategic initiatives, 12.1.1 Create enterprise measurement systems model, 12.0 Manage Knowledge, Improvement, and Change, 12.1 Create and manage organizational performance strategy, 12.4.3.4 Monitor change, 12.4 Manage change, 12.4.3 Implement change, 12.4.4.1 Monitor improved process performance, 12.4.4 Sustain improvement 
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Centralize the Governance of Process Frameworks

Organizations typically adopt process frameworks or other external models to ensure that the entire enterprise (or a specific business unit) operates according to a single standard.

Type: Best Practices and Business Drivers  Topics: Business Process Management (BPM), Business Excellence, Process, Continuous Improvement, Change Management, Organization and Management, Process Design, Process Management, Organization Structures  Processes: 1.2.5 Create organizational design (structure, governance, reporting, etc.), 1.0 Develop Vision and Strategy, 1.2 Develop business strategy, 1.3 Manage strategic initiatives, 12.1 Create and manage organizational performance strategy, 12.0 Manage Knowledge, Improvement, and Change  Industry: Steel, Transportation/Freight Carriers 
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Frameworks Improve Performance When Adopted at Any Level of the Organization

Many organizations adopt frameworks as part of an enterprise-wide restructuring effort. But adopting a framework at any level of an organization, in any particular department, can yield substantial gains.

Type: Best Practices and Business Drivers  Topics: Business Process Management (BPM), Business Excellence, Process, Process Design, Process Improvement, Project Management, Organization and Management, Organization Structures  Processes: 1.2.5 Create organizational design (structure, governance, reporting, etc.), 1.0 Develop Vision and Strategy, 1.2 Develop business strategy, 1.3 Manage strategic initiatives, 12.1 Create and manage organizational performance strategy, 12.0 Manage Knowledge, Improvement, and Change, 12.4.3 Implement change, 12.4 Manage change  Industry: Energy and Utility, Financial Services/Banking, Insurance, Metals, Petroleum/Oil/Gas, Printing & Publishing, Professional Services/Business Services, Steel, Transportation/Freight Carriers 
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Objectives for Business Process Management

In this article, best-practice organizations featured in APQC research offer a list of the main performance areas that business process management (BPM) impacts.

Type: Best Practices and Business Drivers  Topics: Business Process Management (BPM), Business Excellence, Process, Process Management  Processes: 1.3 Manage strategic initiatives, 1.0 Develop Vision and Strategy, 12.1 Create and manage organizational performance strategy, 12.0 Manage Knowledge, Improvement, and Change, 12.1.1.3 Set performance targets, 12.1.1 Create enterprise measurement systems model 
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APQC's Improvement Project Alignment Worksheet

To truly benefit an organization, improvement projects must align with organizational strategy and be connected with actual work.

Type: Tools and Templates  Topics: Business Process Management (BPM), Business Excellence, Process, Process Improvement, Project Management, Organization and Management  Processes: 1.2.4 Coordinate and align functional and process strategies, 1.0 Develop Vision and Strategy, 1.2 Develop business strategy, 1.3 Manage strategic initiatives, 12.1 Create and manage organizational performance strategy, 12.0 Manage Knowledge, Improvement, and Change 
  • Relevance: 52%
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APQC's Measurement Alignment Worksheet

For measurement to impact an organization's performance, measures must align with organizational strategy and be connected with actual work.

Type: Tools and Templates  Topics: Business Process Management (BPM), Business Excellence, Process, Measurement Frameworks, Measurement, Process Measures, Measurement  Processes: 1.3.4 Establish high-level measures, 1.0 Develop Vision and Strategy, 1.3 Manage strategic initiatives, 12.1.1 Create enterprise measurement systems model, 12.0 Manage Knowledge, Improvement, and Change, 12.1 Create and manage organizational performance strategy, 12.1.1.1 Establish performance measures, 12.1.1.3 Set performance targets 
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Ten Characteristics of Successful Business Process Management Initiatives

Among all of the organizations APQC has studied for best practices in business process management (BPM), certain characteristics emerge again and again.

Type: Best Practices and Business Drivers  Topics: Business Process Management (BPM), Business Excellence, Process  Processes: 1.3 Manage strategic initiatives, 1.0 Develop Vision and Strategy, 12.1 Create and manage organizational performance strategy, 12.0 Manage Knowledge, Improvement, and Change 
  • Relevance: 51%
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