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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
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CONFIDENTIALCMC LimitedA TATA Enterprise 2
Objectives
• The Performance Metrics Dashboard Concept• The Dashboard Design• Dashboard Implementation• Business Value Obtained• Critical Success Factors• Common Pitfalls
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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)
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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…
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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
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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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CONFIDENTIALCMC LimitedA TATA Enterprise 7
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
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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
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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
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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
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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)
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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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CONFIDENTIALCMC LimitedA TATA Enterprise 20
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
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IP Wise – Rev-VA 2003-2004
2%13%
3%
31%
46%
5%
POWER
BANKING & FINANCE
TRANSPORT
DEFENCE
e-GOVERNANCE
OTHERS
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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)
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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
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Revenue Generation
•17%
•12%
•38%
•13%
•20%
•Carry Fwd•Private•Govt•Intl-Products•Intl-PP
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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
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Customer Analysis
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Customer Satisfaction Index
1
24
56
9107
3
8
404550556065707580859095
100105
MCL=85.00
Customer Satisfaction
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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
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Schedule Variance
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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
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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
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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
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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
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Q & A ?
Nita Sarang Technical Consultant & Chief Quality [email protected]