DEA | |

|

Evaluating the effectiveness of any process is one of the most challenging tasks faced by managers today, especially when there are multiple inputs and outputs of the process. The difficulty is further compounded when the relationships between the inputs and the outputs are complex and involve unknown tradeoffs. The challenge is in terms of comparing the performance of a process at different locations of the organization, or evaluating how the process has been performing at a particular location over consecutive periods of time (also called window analysis).
DEA i.e. Data Envelopment Analysis tool is targeted towards solving such managerial problems, and can be applied to both macro-level and micro-level processes, thereby providing an effective performance measurement and monitoring framework for Business Process Intelligence (BPI). It caters to the performance evaluation needs of both top management as well as different functional managers within an organization. The tool can seamlessly integrate with an organization’s information management system to provide insightful dashboards for monitoring processes and identifying benchmark groups, so as to ensure continual improvement of processes. Various strategic, tactical, and operational decisions can be taken based on the insights provided.
Performance Evaluation: Brief Introduction
Performance Evaluation
It is difficult to evaluate the performance of a process when there are multiple inputs and multiple outputs. This point is illustrated below with a macro example of an organization having operations across multiple locations:

A Decision Making Unit (DMU), as depicted below, is a separate entity/unit, with multiple inputs and outputs. The efficiency of the unit depends on how best the unit leverages the inputs to maximize the outputs.

Efficiency, in its most elementary form can be