Business Objectives, KPIs and Legacy Conversions

Today most business analysts are familiar with the notion of mapping features and requirements to business objectives to discern what will provide the business with the most value. This approach is extremely valuable as it provides evidence to management of what parts of the system are providing what kind of return on investment. 

The picture gets a bit more muddled when a business analyst is working through a legacy conversion; the software has to achieve the same goals as the previous software. In these cases the business objective is typically the value from the change – licensing costs from reducing the number of systems or labor improvements performing business processes.

In these situations, businesses should look at new software much like manufacturers look at new technology; tools that speed a process resulting in significant time and/or labor improvements. In lean manufacturing processes, its common to have someone measure the time pieces of a process takes to identify bottlenecks and to measure the overall process execution time. These figures are part of what is commonly called a KPI, a key performance indicator. 

As business analysts we can learn from our counterparts in the manufacturing industry – conversion projects have many commonalities with a technology upgrade at a factory. Business analysts should be engaging in measuring existing business processes during a conversion project. By identifying bottlenecks in common processes, funds can be directed towards the areas that will add the most value to the business.

For example, the new software may reduce the time two processes take, Process A and Process B, from 60 minutes to 30 minutes. If Process A is done 300 times a day as part of a one hour process and Process B is done 1 time a month as part of an eight hour process, then Process A is the more significant bottleneck. Not only that, but Process A is also executed far more frequently – a project looking for additional enhancements to streamline the business would clearly want to target Process A for further reductions. At the same, it is important to consider whether a process is bottlenecking other processes – speeding one process may actually reduce downstream groups’ lag time, and result in a more lean overall process.

This analysis shows why it’s important not to simply look at the execution time but also the surrounding context. Improving a task that is performed very infrequently typically will not bring as much ROI as improving a more commonly performed task, especially if there is a downstream impact.

When one is working within a conversion project it is very tempting to be satisfied with a business objective that covers the savings from reducing legacy systems support and licensing costs. Business analysts can add even more value by going to a more detailed level and analyzing the business processes affected by the upgrade and developing KPIs to benchmark towards. Adopting such an approach helps build your business towards a lean, efficient structure.