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Better Benchmarking Through The Process Classification Framework

Over the years thousands of people around the world have downloaded APQC's Process Classification Framework® (PCF) . Most of them have a clear problem they're trying to solve, while others are just curious or are doing research. One thing we have clearly understood over time is generally what people are doing with the PCF once they download it.

This post is the first in a series of blog posts addressing how people and organizations around the world, and in all aspects of business and government, are using the PCF to improve their operations.

We have come to learn that organizations use the PCF for three core reasons:

  1. organizing content in a simple and readily understandable way ("content management"),

  2. consistently and clearly describing what something means so it can be reliably measured ("benchmarking"); and

  3. using it as a template to define what work is being done, who is.doing the work, where in the organization the work is being done, and how that work is to be done consistently, reliably, and without unexpected variations.

We call that last use "process management" and it has the most potential to add value to an organization in the long run. You’ll learn more about that in an upcoming post. This post is about how the PCF is used to help organizations measure their performance and effectively compare it to other organizations around the world; in other words benchmarking.

The most critical part of benchmarking is ensuring a common understanding of what’s being measured. Two organizations trying to compare the performance of a process is relatively easy:

  • identify the problem you’re trying to measure, and
  • then identify the parts of your organization that represent that problem area, regardless of organizational structure.

This discussion typically is very easy and requires little forethought, governance, or management: just tell your benchmarking partner what you’re trying to measure. Scaling this work is where you and I run into problems: when the benchmarking partners number in the dozens, it quickly becomes very difficult to all coordinate and match each other’s processes and work. Each new participant in the benchmarking exercise needs to know what the others already know. As each new participant joins the group, the new participant must be educated on the scope of the measurement, the relationship of the measured area to other areas, and more; all in an effort to ensure consistent and reliable measurement. I don’t want to be responsible for this plethora of conversations, and I’m sure you don’t either. That’s why we developed a tool to help coordinate this effort.

The PCF helps organizations provide that objective definition of what is being measured. It serves as the scope for benchmarking activities. The PCF is the reason that APQC’s benchmarking database is scalable and can welcome thousands of new participants each year: each participant is asked to provide data that aligns with the process definition in the PCF, rather with than their organizational structure or business practices. Hence the PCF is a neutral common language for organizations to use in benchmarking. Neither you nor me have to spend time onboarding new participants – the PCF and its supporting definitions help make that easy.

In addition to the neutral common language, the PCF provides information management features. The long-term management of the PCF as a taxonomy of information requires a robust and scalable (there’s that word again!) means to ensure consistency across frameworks created throughout time and space (geographic space - think translations into foreign languages). APQC’s commitment to transparency and openness means that we openly publish these index numbers. They are essential to any organization that wants to adopt and benefit from a process framework at the pace demanded by modern business.

Where else in the world could you find a common definition of “accounts payable,” for example? A definition which:

  • literally hundreds of organizations around the world have used as the standard for measuring themselves,
  • is curated by an independent,trustworthy third party like APQC, and
  • is available for your internal use at no cost and with no required “add-on” services or consulting agreements.

This is the true value of the PCF for benchmarking purposes. It’s open. It’s transparent. It is recognized by organizations around the world as a clear and consistent way to measure a unit of work, regardless of the type of business, where it is located, or its strategy.

The PCF serves organizations of all maturity levels. One of its biggest values is that it can grow with the organization as its managing processes mature. Organizations or entities within organizations that begin with a simple download can immediately see real, tangible value by adopting the PCF for benchmarking purposes. Don’t believe me? Try to get 10 of your peer companies to consistently measure anything and report back to me.

You can follow John on Twitter @JohnGTesmer and join APQC’s Process Classification Framework LinkedIn Group.