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
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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
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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
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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)
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•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
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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
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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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