ppt - the performance metrics dashboard – a powerful

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CONFIDENTIALCMC LimitedA TATA Enterprise 1

The Performance Metrics Dashboard – A Powerful Executive

Management ToolPresented atThe IFPUG 2004 Annual Conference

September 23, 2004

ByNita Sarang

Technical Consultant &Chief Quality Manager

CONFIDENTIALCMC LimitedA TATA Enterprise 2

Objectives

• The Performance Metrics Dashboard Concept• The Dashboard Design• Dashboard Implementation• Business Value Obtained• Critical Success Factors• Common Pitfalls

CONFIDENTIALCMC LimitedA TATA Enterprise 3

The Dashboard

A simple way for executives to monitor key performance metrics from across the business

• Visual representation of key business areasWarning lights to signal the current status of key business areas being monitored – green, yellow, red status

• Targeted to CEOs, managers, and anyone else in the company

Contextual usefulness (interpretation) of data/performance results (role-based dashboards)

CONFIDENTIALCMC LimitedA TATA Enterprise 4

Why a Dashboard?

• A well-proven performance management practice – provides an organization wide perspective of business performance across multiple dimensions.

• Business objectives/goals and management expectations are clearly articulated

• Standardize data sharing and performance measurement practices – brings all performance data from various sources and locations before the decision makers.

• Serves as a performance diagnostic tool – facilitates decision on fact rather than judgmental inference.

contd…

CONFIDENTIALCMC LimitedA TATA Enterprise 5

Why a Dashboard? contd…• Establishes a platform for business and

operational excellence – uses performance metrics to drive productivity

• Directs process improvement efforts – converts business data into action-oriented information; helps coordinate actions amongst diverse stakeholders and align execution with strategic goals

• Establishes the foundation for benchmarking organizational processes – through goal alignment across the organization

Align People, Implement Strategies, and Measure Performance

CONFIDENTIALCMC LimitedA TATA Enterprise 6

The Performance Management Model

1. Projects/Services/Technology Plans/Other Plans

1. Action Plans/Milestons2. Execution of Plans

1. Assess Change Readiness2. Establish Mission/Vision3. Establish Corporate Objectives/Goals

D A S MH EB TO RA I R CD S

TrackOutcome

Where we need to go…

How we will get there…

How we will knowwe are getting there…

Targets

MeasuredData

Performance

Analysis

Monitoring trigger / cyclePerformance management

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The Dashboard Design

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Requirements of a Dashboard• Identification of Key Performance Indicators (KPIs)

Reflect the Management PhilosophyTargets all levels of the organizationSummarization at various levels – Organization /Department /Division /Business Area (IP/SP)Drill down through the connecting levels and links of the key business area

• Categorize information / identify data sourcesCRM systemsProjectsFinance & Accounts

• Target setting• Review mechanisms and cycle• Proactive correction through recommendations based on

current performance and trends

Weekly, fortnightly, monthly, quarterly, half-yearly

CONFIDENTIALCMC LimitedA TATA Enterprise 9

Dashboard Perspectives

•Financial PerformanceBusiness resultsMarket growthSales force performanceStrategic partnerships

•Customer ServiceCustomer satisfactionCustomer retention

•Learning and GrowthOrganizational effectiveness (survey)Technology penetrationTraining alliances

•InternalProject performance (Quality)Business excellence enablers

A balanced scorecard approach

CONFIDENTIALCMC LimitedA TATA Enterprise 10

Target Setting - Business Objectives

•Financial PerformanceRevenue/BDE/ProfitabilityRevenue from new customersVA/pmRevenue from overseas projects

•Customer ServiceCustomer satisfactionCustomer retention

•Learning and GrowthAdvanced certification for EmployeesR&D projects/yearReusable component/project

•InternalTest EffectivenessAttritionSalary World Class InfrastructureManpower UtilizationSchedule Slippage

CONFIDENTIALCMC LimitedA TATA Enterprise 11

Typical Performance Indicators

•FinancialSales Performance – Target vs Achievement

Sales Productivity –Prospect Conversion Ratio, Cycle Time

Business from New Customers/Total Revenue

Revenue from Acquired Strategic Partnership

•CustomerCustomer Satisfaction Index

Customer Retention Index

Rolling 12 month Outstanding to Revenue Ratio

contd...

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Typical Performance Indicatorscontd..

•Internal

Productivity

Defect Density

MTTR/MTTS

Manpower Utilization

Employee Satisfaction Index

Training Effectiveness

Schedule Variance

Effort Variance

•Learning and Growth

Number of professional certifications in line with business strategy

Number of R&D products and revenue from such products

CONFIDENTIALCMC LimitedA TATA Enterprise 13

Dashboard Implementation

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Pre-requisites

• Clearly articulated organization objectives• Organizational Measurement Program• Quantitative management insight – statistical

analysis and interpretation• Basic technology infrastructure

Fixed data sources, access and consolidation mechanismsPerformance results publishing

Sound measurement and improvement processes

CONFIDENTIALCMC LimitedA TATA Enterprise 15

Dashboard Implementation

• SimplisticEasily usable, adaptable and accessible

• Defining the rules for access/update• Live data feeds / real-time data• Ownership for data• Data analysis (also includes trends)• Organization performance baselines

CONFIDENTIALCMC LimitedA TATA Enterprise 16

Key Players

• Executive Management• Senior Management• Sales Manager(s)• Project Manager(s)• Test and QA Manager(s)• Data Manager(s)

CONFIDENTIALCMC LimitedA TATA Enterprise 17

Dashboard Evolution

• Initiated for systems engineering processes• Spread to sales processes• Enhanced for business (financial) perspective

• Driven by A need for strong internalization of processesQuick ROI – aligned with PI initiatives CMMI/ITIL/Six Sigma/CMMIAvailability and maturity of dataUsefulness of dataMaturity in quantitative analysis

CONFIDENTIALCMC LimitedA TATA Enterprise 18

Data Evolution

• Disparate data (and sources)• Reactive analysis based on performance• Data normalization techniques• Standardization of data (and sources)• Automated through systems• Proactive analysis through targets

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Power of the Dashboard

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1%19%

1%

38%

30%

11%

POWER

BANKING & FINANCE

TRANSPORT

DEFENCE

e-GOVERNANCE

OTHERS

IP Wise – Sales 2003-2004

Need… transport and power sector need to be reviewed

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Sales Rep Performance 2003-2004

•17%

•13%

•8%

•6%•4%•2%•1%•0%•1%•11%

•32%

•5%

•Rep 2•Rep 3

•Rep 1

CONFIDENTIALCMC LimitedA TATA Enterprise 22

IP Wise – Rev-VA 2003-2004

2%13%

3%

31%

46%

5%

POWER

BANKING & FINANCE

TRANSPORT

DEFENCE

e-GOVERNANCE

OTHERS

CONFIDENTIALCMC LimitedA TATA Enterprise 23

Regional Performance : 2003-04

•Quarters 2003-04

•0

•200

•400

•600

•800

•1000

•1200

•1400

•1600

•1 •2 •3 •4

•Val

ue

•Sales•Sale VA•Revenue•Revenue VA•Linear (Revenue)•Linear (Revenue VA)

CONFIDENTIALCMC LimitedA TATA Enterprise 24

Drill-down – Location 1 / Quarter-wise Performance : 2003-04

•Quarters 2003-04

•0

•50

•100

•150

•200

•250

•300

•350

•1 •2 •3 •4

•Val

ue

•Sales•Sale VA•Revenue•Revenue VA•Linear (Revenue)•Linear (Revenue VA)

CONFIDENTIALCMC LimitedA TATA Enterprise 25

•Quarters 2003-04

•0

•50

•100

•150

•200

•250

•300

•350

•1 •2 •3 •4

•Val

ue

•Sales•Sale VA•Revenue•Revenue VA•Linear (Revenue)•Linear (Revenue VA)

Drill-down – Location 2 / Quarter-wise Performance : 2003-04

CONFIDENTIALCMC LimitedA TATA Enterprise 26

Drill-down – Location 3 / Quarter-wise Performance : 2003-04

•Sales•Sale VA•Revenue•Revenue VA•Linear (Revenue)•Linear (Revenue VA)

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Qtr-wise Sale Plan

•Quarters 2003-04

•0

•200

•400•600

•800

•1000

•1200•1400

•1600

•1800

•1 •2 •3 •4

•Val

ue

•Defence•E-Gov•Transport•BFSI•Others

CONFIDENTIALCMC LimitedA TATA Enterprise 28

Revenue Generation

•17%

•12%

•38%

•13%

•20%

•Carry Fwd•Private•Govt•Intl-Products•Intl-PP

CONFIDENTIALCMC LimitedA TATA Enterprise 29

Revenue Generation

•0

•200

•400

•600

•800

•1000

•1200

•CF •Sector1 •Sector2 •Sector3

•LOC1

•LOC2

•LOC3

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•0%

•10%

•20%

•30%

•40%

•50%

•60%

•70%

•80%

•90%

•100%

•CF1 •CF2 •CF3 •CF4

•L1 PP•L1 Rev

•L2 Rev•L2 PP•L3 Rev•L3 PP

CF Revenue versus PP Deployment

CONFIDENTIALCMC LimitedA TATA Enterprise 31

Productization R&DNew Products Dev

Volume TradesTally

Position

Cost To ServeLOW HIGH

LOW

HIGH

Time to Exit?Reduce Costs

Earnings versus Cost

Earnings

CONFIDENTIALCMC LimitedA TATA Enterprise 32

Customer Analysis

CONFIDENTIALCMC LimitedA TATA Enterprise 33

CONFIDENTIALCMC LimitedA TATA Enterprise 34

Customer Satisfaction Index

1

24

56

9107

3

8

404550556065707580859095

100105

MCL=85.00

Customer Satisfaction

CONFIDENTIALCMC LimitedA TATA Enterprise 35

Test Effectiveness

8

3

7

13

12

11

10

96

54

2

1

80

82

84

86

88

90

92

94

96MCL=95

UNPL=92.54

Median=89.13Mean=89.01

LNPL=85.72

Test Effectiveness

CONFIDENTIALCMC LimitedA TATA Enterprise 36

Schedule Variance

CONFIDENTIALCMC LimitedA TATA Enterprise 37

General Benefits

• Focus on key business processes• Transparency of operations and visibility to

Executive Management• Facilitates goal alignment across the organization

through coherent action plans• Induces peer pressure and healthy competition• Facilitates a self-sustained process improvement

culture

CONFIDENTIALCMC LimitedA TATA Enterprise 38

ROI from the Dashboard

• Traditional productivity gainsA highly productive sales forceImproved product/service deliveries (quality of deliveries, quality of service)Easy monitoring of expenses, cash flows, operating profits

• Second/third tier benefitsBetter (proactive) project tracking with timely actionMonitoring mechanisms are well-defined

CONFIDENTIALCMC LimitedA TATA Enterprise 39

Critical Success Factors• Leverage existing technology infrastructure

Start simple, ensure usefulness, acquire buy-in• A sound measurement foundation

Identifying the right metrics (all levels of the organization) – the selected metrics should be reliable indicators of performanceInterpreting metrics

• Ownership for (data) results• Analyzing results

Contextual analysis through co-relationsTranslate performance metrics into clear improvement opportunities

• A strong improvement processOwnership for timely corrective actionContinuous process improvement

contd…

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Critical Success Factors contd…

• Training program – targeting meatier returns

• Ownership for results• Effectiveness of the dashboard

Contextual analysis through co-relationsTranslate performance metrics results into clear improvement opportunities

• A strong improvement processOwnership for timely corrective actionContinuous process improvement

• Metrics for the monitoring process• Periodic re-evaluation of organizational measurement

program

CONFIDENTIALCMC LimitedA TATA Enterprise 41

Common Pitfalls

• Misconceptions - dependent on the IT spendLow-cost (MS-Office/HTML generator) as effective as High-cost (collaborative dashboard solutions from BI vendors)Reconsider metrics rather than the tools♦ Right choice of KPIs

♦ Right data (and source)

♦ Correct dashboard representation

♦ Ownership of data

CONFIDENTIALCMC LimitedA TATA Enterprise 42

Q & A ?

Nita Sarang Technical Consultant & Chief Quality Managernita.sarang@cmcltd.com

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