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EXAMPLES OF SOME OF BEST-IN-CLASS PERFORMANCE METRICS USED FOR OPERATIONAL KPI ( Part 2 of 3)

slang — Tue, 27 Oct 2009 05:35:34 +0000

Some of the best in class performance metrics extracted from Abe Aberdeen Group, June 2008 :-

Operational Metrics	Measurable Values(KPA)	Measured As(KPI)
Customer satisfaction index	Percentage improvement in customer satisfaction Issue resolution speed Resolution accuracy in past 12 months	Percentage improvement or decline (-50% to >50% in increments of 10%)
Customer retention	Rating of customer retention performance during past 12 months	Percentage of actual retention during past 12 months (raw percentage or “don’t know)
Time-to-information	Time between actual business events and access to information about those events during past 12 months	Months to weeks, weeks to days, days to hours, hours to minutes, minutes to seconds
Time-to-decision or action	Time between actual business events and action taken to address those events during past 12 months	Months to weeks, weeks to days, days to hours, hours to minutes, minutes to seconds
Decision-maker visibility to KPIs	Percentage increase or decrease in visibility to operational KPIs among employees with operational responsibilities during past 12 months	Percentage increase or decrease (-50% to >50% in increments of 10%)

Other important operational kpa/kpi are:

End-user satisfaction
Existence of KPIs in four major scorecard categories: financial, customer, process, HR and innovation
Increase in number and types of decisions that can be made
Improvement in quality of information upon which decisions are based

See more examples on KPI in the Balanced Scorecard Category re:Financial Perspective KPI ; Customer Perspective KPI ; Internal Process Perspectives KPI and Learning & Growth Perspective KPI

OPERATIONAL KPIs – THE IMPORTANCE TO THE SUCCESS OF THE BUSINESS(PART 1 OF 3)

slang — Tue, 27 Oct 2009 05:31:55 +0000

Whether you are using dashboard, scorecards (balanced scorecard, etc), business intelligence tools or query tool reporting, there is an urgent need for management to understand the importance to identify, define, track, and act upon operational key performance metrics / indicators.

[ Earlier article on kpa & kpi has shown to management the importance of creating, maintaining and monitoring such company’s kpa/kpi to meet company goals.]

In brief, Management need to understand the key operational business drivers that affect company performance ;establish a corporate and / or departmental set of operational KPIs ;align operational KPIs with line-of-business goals and incentives; provide a method for making KPI-based performance visible to the enterprise; create an on-going process for internal and external KPI review, evaluation, and re-alignment.

Executives and line-of-business management are feeling the pressure to enable timelier and more accurate decisions in order to improve operational efficiencies. The faster and more accurately KPIs can be accessed, reviewed, analyzed, and acted upon, the better an organization can manage day-to-day operations and customer interactions.

In the Abeerdeen report conducted in December 2007, improvement of operational efficiencies ranked the top amongst the concern of management:

Improvement of operational efficiencies
Accuracy of business decisions
Timeliness of business decisions
Improve management view to operation
Meet profitability objectives

Very often, management find its difficult to get the correct operational kpi for a business due to perhaps the need to integrate data from a variety of disparate sources ; the need to have a host of infrastructure requirements to deliver the information in a meaningful format like reports / dashboards, scorecards, alerts and via an effective medium (desktop, web, remote access, email, PDAs, mobile devices) and others.

[ See Part 2 on some of the best in class practise operational key performance operational kpi ]

TOPICS COVERED UNDER THIS HEADING:BALANCED SCORECARD

slang — Wed, 12 Mar 2008 04:33:36 +0000

The following articles are covered under this heading:

An Introduction To Balanced ScoreCard
Balanced ScoreCard-Sources/references for your matrix measurements
Examples of Financial Measures Perspectives of Balanced ScoredCard

Examples of Learning Growth Measures Perspectives of Balanced ScoredCard.

Example of Internal Process Measures Perspectives of Balanced ScoredCard.

Examples of Customer Measures Perspectives of Balanced ScoredCard

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Balanced Scorecard:Sources/References For KPI’s

slang — Mon, 10 Apr 2006 14:02:12 +0000

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To build up a Balanced Scorecard, you need to find the necessary key performance indicators/KPIs. So where do you think you can get them?

I append below the following sources or references where you are able to obtain the necessary matrix measures for the four components of the Balanced Scorecard:

Financial :-

• Annual report

• Performance reports

• Analyst reports

• Benchmark reports

Customer:-

• Customer complaints

• Marketing/Sales Dept

• Performance reports

• Benchmark reports

Internal Process:-

• Operational reports

• Manufacturing reports

• Benchmark data

• Competitor data

• Project plan

Learning & Growth:

• Human Resources data

• Core values

• Benchmark reports

• Consulting studies

Balanced Scorecard: Examples of Financial Perspective,KPI

slang — Mon, 10 Apr 2006 13:55:59 +0000

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Examples of Financial Measures

Total assets($)
Total assets/employee($)
Revenues/total assets(%)

Revenues from new products or business operations($)
Revenues/employee($)
Profits/total assets(%)
Profits from new products or business operations($)
Profits/employees($)
Return on net assets($)
Return on total assets(%)
Return on capital employed(%)
Return on equity (%)
Return on Investment(%)
Cash flow ($)
Return on investment (%)
Total costs($)
Revenue($)
Gross Margin($)
Net Income($)
Profit as % of sales
Economic Value Added
Compound Growth Rate
Dividends
Market Value
Share Price
Earnings per share
Credit rating
Debt
Debt to equity
Accounts receivable turnover
Days in Inventory

Balanced Scorecard: Examples Of Learning & Growth Perspective KPI

slang — Mon, 10 Apr 2006 13:33:33 +0000

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Examples of Learning & Growth

Employee participation
Training hours per employee
Average years of service
Absenteeism
Turnover rate
Employee suggestions
Employee satisfaction index(No)
Employee’s view(empowerment index)(No)
Shareof employees below age X(%)
Non-product-related expense/customer/year($)
Ratio of new products(less than X years old) to full company catalogue(%)
Near misses
Accidents
Value added per employee
Diversity rate
Work – Life Balance
Employee productivity
Cross – training
Health promotion
Personal goal achievement
Leadership development
Knowledge management
Ethics violations
Cross-functional assignments
Problem solving teams
Learning rate
R&D expense($)
R&D expense/total expenses(%)
IT Development expense/IT expense(%)
Hours, R&D(%)
R&D resources/total resources(%)
Investment in training/customers(No)
Investment in research($)
Investment in new product support and training ($)
Investment in development of new markets($)
Direct communications to customers/year(No)
Patents pending(No)
Average age of company patents(No)
Suggested improvements/employee(No)

Balanced Scorecard: Examples Of Internal Process Perspective KPI

slang — Mon, 10 Apr 2006 13:31:56 +0000

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Examples of Internal Process Measures

On-Time Delivery
Administrative expense/total revenues(%)
Administrative expense/customer($)
Average Lead Time(No)
Contracts filed without error (No)
Lead time,product development(No)
Lead time, from order to delivery (No)
Lead time, suppliers(No)
Average time for decision-making(No)
Inventory Turnover
R & D expenses($)
Patents pending(No)
Ratio of new products to total
Total cost to customer
Stock-outs
Response time to customer
Productivity rate
Rework rate
Environmental emissions
Breakeven Time
Cycle Time Improvement
Warranty claims
Waste reductions
Space utilization
Down time
Time to market
Planning accuracy
New products introduced
Continuous improvements
Customer database availability
Emissions from production into the environment(No)
Environment impact of product use(No)
Cost of administrative error/management revenue(%)

Balanced Scorecard: Examples Of Customer Perspective KPI

slang — Mon, 10 Apr 2006 13:30:16 +0000

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Examples of Customer Measures

Annual sales/customers($)
Average custome size($)
Customer rating(%)
Average time from customer contact to sales response(No)
Average time spent on customer relations(No)
Customers/employee ( No or %)
Satisfied-customer index(%)
Customer-loyalty index(%)
Market Share
No of Customer Complaints
Return Rates
Response Time
Cost/customer($)
Customers Lost(No or %)
Customer retention
Number of customers
Annual sales per customer
Marketing cost as a % of sales(%)
Marketing expenses($)
Number of proposals made
Brand-image index (%)
Response rate
Sales volume
Sales per channel
Average customer size
Customers per employee
Frequency of sales transactions
Sales closed/sales contacts(%)
Number of visits to customers(No)
Service expense/customer/year($)

What is Balanced Scorecard Or Balanced Scorecard Definition

slang — Mon, 10 Apr 2006 12:57:10 +0000

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It seeks to introduce the powerful performance management tool called Balanced Scorecard.

Introduction:

Balanced Scorecard is not at all new in the market. It was initiated in 1992 with many companies especially Fortune 1000 adopting the BSC with phenomenal result.

It was originally developed in the early 1990′s by Dr Robert Kaplan ( Prof Harvard Univ) and David Norton (Consultant). Both men researched on exploring new methods of performance measurement. They believed that financial measures of performance alone were ineffective for the modern business enterprise.

Their study identified four areas of performance measures :

Customer issues
Internal business process
Employee activities
Shareholder concerns

What is a Balanced Scorecard

It is believed that with BSC, an organization is able to serve its customers better by:

knowing customer expectations “up front”,
establishing strategies and goals consistent with these expectations,
translating these strategies and goals into achievable action plans,
providing goals that can be measured.

Nowadays, Balanced Scorecard is often use as a tool in the company’s Measurement system or Strategic management system or as Communication Tool