Metrics mania.

• Author: Lapp, John C.
• Position: Performance measurement in Kraft Foods

Harnessing performance measurements in a shared-services operation

It's not unique to routinely measure your company's performance by collecting data about your business processes and then reporting your findings to the head of the business unit or publishing them in the department's newsletter. Lots of companies do it. But few are so devoted to the process that they can tell you - down to the number of minutes they spoke on the telephone to a particular customer - how productive they've been on a given day. At Kraft Foods, we can because we fully embrace the principle that not only "what gets measured gets done" but "what gets measured gets done and improved."

Our story is a satisfying one. In 1993, Kraft, like many companies, decided to develop a strategic plan to re-engineer its transaction processes. First, we assembled a re-engineering team from representatives across Kraft, including the top people in the finance department. Our philosophy? To start with a clean sheet of paper in redesigning our processes, align them with single policies and practices, and then apply technologies where they would benefit us most.

Our strategic plan ultimately called for consolidating the re-engineered processes into a shared services center that operates at a single location, in San Antonio, Texas. We've staffed the center with highly professional individuals to administer our re-engineered processes using a self-directed team approach. Operating with the mission to be the "premier provider of financial and business support services in Corporate America," the center processes accounts payable invoices, expense reports and payroll/benefits for all of Kraft Foods' North American operations.

To make sure we hired the right people for the center, we used a firm that specializes in team-building. All of the candidates for the shared services center had to go through a screening process to judge how well they would adapt to a team culture. For instance, we "play acted" in several simulated, stress-filled work situations while the outside firm judged how each of us handled the stress. Those who demonstrated the personality traits and work style that do well in a team environment were selected - 150 in all, including the leadership of the center.

From the outset, we established three goals to demonstrate the center's success: to achieve a first-quartile ranking for processing costs (as identified by a major benchmarking service) by significantly reducing our...