Typically, organizations consider their business processes in four separate categories, which are: develop products and services, generate demand, fulfill demand, and plan and manage the enterprise. Within these categories, there are various subprocesses which are more functional in nature.

Michael Hammer, the business process reengineering guru, advocates measuring processes from a customer's point of view -- the customer wants it fast, right, cheap, and easy. But is it really as simple as that? There are often many stages in a process. If the final output is slow, wrong, expensive, and unfriendly, how will we know which components need to be improved?

In the quest for data and accountability, it is easy to end up measuring everything that moves while learning little about what is important. That is one reason why cross-functional processes need owners -- to decide which measures are important and which metrics will apply -- so that judgments can be made upon analysis of the data and appropriate actions initiated.

Capabilities. Most frameworks do not capture this essential element. All processes need skilled people, policies and procedures, a physical infrastructure and, increasingly, technology to enable or enhance the process. They can be defined as the combination of an organization's people, practices, technology, and infrastructure that collectively represents that organization's ability to create value for its stakeholders through a distinct part of its operations.

For example, consider a common business process, such as the order-to-cash fulfillment process in an electronics business. The customer places an order, the company makes and delivers it, and then receives payment. It is a single process with multiple components and implies the presence of at least six different capabilities, including customer order handling capability, planning and scheduling capability, procurement capability, manufacturing capability, distribution capability, and credit management capability.

Each of these capabilities requires different skill sets, different practices, different technologies -- although some IT systems will likely be multi-functional and integrated -- and different physical infrastructures, such as offices, factories, and warehouses.

Measurement of a capability will normally focus particularly on those critical component parts that make it distinctive and allow it to remain so in the future. But that does not necessarily mean that those capabilities that only need to be as good as any other competitor's do not need to be measured. How will you know that you are not beginning to lag behind in these areas if you do not measure them? Either way, competitive benchmarks will likely be needed in order to understand the size of the gap. The goal posts seldom remain static for very long.