Archive for April, 2010

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Performance Measurement taxonomy – linking Performance Measurement and Management

Saturday, April 17th, 2010

smartKPIs.com Performance Architect update 15/2010

In my previous update, I discussed the concept of taxonomy and outlined the structure of a Performance Management taxonomy.  A subset of Performance Management is Performance Measurement and thus a separate taxonomy is required to illustrate its key elements.

The Performance Measurement taxonomy outlined below starts with a list of Performance Measurement instruments that provide the link with the Performance Management taxonomy. The other elements illustrate the various descriptors of performance measures. The taxonomy is listed in a linear format, as it is still work in progress. A more complex map of the taxonomy can be structured once it matures:

Performance Measurement

Instruments

  • Goals / Objectives
  • Measures
  • Performance indicators / metrics
  • Key Performance Indicators
  • smartKPIs
  • Scorecards
  • Dashboards

Stakeholders

  • Measure owner
  • Data custodian

Dimensions

  • Cost
  • Time
  • Quality
  • Maturity

Measure unit type

  • $ Value
  • # Number
  • % Percentage

Formula type

  • Average
  • Volume
  • Rate
  • Ratio
  • Index
  • Composition

Measurement type

  • Quantitative
  • Qualitative

Measurement focus

  • Risk
  • Satisfaction
  • Money
  • Quality
  • Duration
  • Volume

Measure relevance level

  • Strategic
  • Operational

Positive trend for measurement results

  • When increasing
  • When decreasing
  • When within an interval of values

Indicator focus

  • Leading
  • Lagging
  • Diagnostic

Measure impact stage

  • Input
  • Process
  • Output
  • Outcome

Data capture period

  • Spot
  • Day
  • Week
  • Month
  • Quarter
  • Year
  • Year to date
  • Rolling average

Listing and grouping such elements is a good first step. Exploring the relationships between them and linking them in a map structure will provide a much richer picture.

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan

Performance Architect,
www.smartKPIs.com

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Posted in Business Intelligence, KPI, Measure, Performance Architect update, Performance Management, Performance Measurement, smartKPIs.com | No Comments »

Eco KPIs – tracking ink and paper reduction initiatives with green metrics

Friday, April 16th, 2010

Green Bay saves money by going green with green fonts

An excellent example of going green and saving money is provided by the University of Wisconsin – Green Bay. In order to reduce campus printing costs, their Computing and Information Technology Department had the initiative to change their preferred font from the most commonly used one – Arial to the Century Gothic font.

The new font uses 30% less ink or toner. Taking into account that ink accounts for about 60% of the cost of the printed page, and it is also quite expensive – about $10,000 a gallon, with toner cartridges and drums not far behind – the savings are substantial (University of Wisconsin – Green Bay, 2010).

The IT department switched automatically the default font for Outlook across campus to Century Gothic, and strongly encouraged everyone in the campus to do the same for other software programs too, such as Word, Excel and Entourage for Macintosh.

Such initiatives to reduce ink and toner, can be complemented with initiatives that address paper consumption. Both types of initiatives – targeting the volume of paper and volume of ink used can have a big impact on lowering printing costs. More than reducing costs, a green attitude like this one will generate supplementary benefits for the people involved and gradually can make and impact on environment overall.

smartKPIs.com (2010) contains a variety of measures and eco KPI examples that can help keeping track of the impact of efficient paper use initiatives:

More resources on green fonts and ink reduction initiatives

The resources used and recommended by the University of Wisconsin – Green Bay are:

References

University of Wisconsin – Green Bay, 2010, Going green with Century Gothic, available at  http://www.uwgb.edu/compserv/topics/CenturyGothicGreen.htm (accessed 20 April 2010)

smartKPIs.com (2010), “KPI examples for Environmental Care”, available at http://www.smartkpis.com/kpi/functional-areas/csr-sustainability-environment-care/environmental-care/ (accessed 20 April 2010)

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Posted in KPI, Library of KPI examples, Measure | No Comments »

Little’s Law: a fundamental principle used in performance measurement and Lean Six Sigma

Thursday, April 15th, 2010

Developed in 1961 by a former Massachusetts Institute of Technology (MIT) professor, John D. C. Little, the law that carries his name (Little’s Law) has emerged from being a queue theory at its origins to being applied currently in a variety of other aspects of every-day life, such as: Project Management, Manufacturing, Supply Chain etc.

Originally, Little’s Law was explained in the queuing theory as it follows (McDonough, 2009):

L = λ x W

Where:

L = # Long-term customers in the system

λ = # Long-term average arrival rate

W = # Long-term average time a customer spends in the system

Nowadays, the principle has become one of the fundamentals of Lean Six Sigma, a method that aims at increasing overall business performance (increased speed and reduced waste) and customer satisfaction.

Source: McDonough, 2009

Lean Six Sigma is based on five fundamental laws (Aveta Solutions, 2009), one of them being the Law of Velocity that relies on the equation embedded in Little’s Law:

# Work in process = # Throughput x # Average flow time

This can be applied in performance measurement in practically any kind of industry. Several examples could be the following:

In airlines, you know that you have an average queue size of 20 passengers and a throughput of 300 passengers embarking per hour, meaning 5 passengers per minute. To calculate the average time a passenger waits in the checkpoint queue, you will have to divide the work in process or the average inventory (of 20 passengers) to the throughput (5 passengers/minute) and you obtain an average wait time of 4 minutes.

In a restaurant, you serve an average of 50 customers per day (considering you are open for 10 hours from 12.00 to 22.00, that would mean a throughput of 5 customers/hour). At any time, there is an average of 10 customers, meaning an average inventory, inside the restaurant. If you wish to know the time a customer spends on average inside the restaurant, you divide the average inventory (of 10 customers) to the throughput (of 5 customers/hour) and obtain a 2 hours average flow time.

This has several implications for managers in their performance measurement and management initiatives, the most important being that, for a given throughput, the only way to reduce flow time is to reduce the inventory or the work in process.

Further reading:

http://www.businessknowledgesource.com/manufacturing/six_sigma_laws_the_law_of_velocity_021687.html

http://www.netmba.com/operations/process/analysis/

References:

Aveta Solutions LLC (2009), „The Five Laws of Lean Six Sigma”, available at: http://www.sixsigmaonline.org/six-sigma-training-certification-information/articles/the-five-laws-of-lean-six-sigma.html (accessed 14 May 2010).

McDonough, M. (2009), „Little’s Law and Six Sigma”, available at: http://www.brighthub.com/office/project-management/articles/56369.aspx (accessed 14 May 2010).

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Posted in Performance Management, Performance Measurement | No Comments »

KPIs in practice – the free online catalog of performance reports now available on www.smartKPIs.com

Wednesday, April 14th, 2010

www.smartKPIs.com announced in March 2010 the launch of “KPIs in practice“, an online catalog of reports that illustrate the use of performance measures in practice by organizations from around the world. At the time of launch, the catalog contained 300 links to performance reports publicly available. Since then, the catalog almost doubled in size, while proving to be a popular resource for a growing number of website visitors.

In brief

KPIs in practice is available as a new content section on www.smartKPIs.com. It complements the KPI examples section of the site which – with over 3000 well documented records – is one of the largest databases of Key Performance Indicator (KPI) examples available on the Internet today. Many of these examples are much easier to understand when they are put into context. Through the launch of KPIs in Practice, smartKPIs.com becomes the first online platform that links well documented performance measures and high quality performance reports.

In numbers

  • 520 KPIs in practice reports
  • Covering 14 Functional Areas
  • From 56 Industries
  • Use by organizations from 55 Countries
  • From all 3 sectors (public, private and non-profit)

In use

Registration on http://www.smartKPIs.com is free and it enables research, learning and interaction as part of a growing community of users from over 175 countries.

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Posted in Business Intelligence, KPIs in practice, Performance Management, Performance Measurement, smartKPIs.com | No Comments »

Let’s Do It! – Clean a Country in One Day – Performance Measurement Case Study

Tuesday, April 13th, 2010

The “Let’s do it! ” initiative, a country clean-up project, was born in Estonia in 2008. By mobilizing the wider community, a team of volunteers succeeded in cleaning the waste deposited in many places across the country. Realized exclusively with volunteers, good-will and with the support of technology, the project was of a great success, replicated or in the process of being replicated in 7 other countries: Latvia, Lithuania, Romania, Slovenia, Portugal, India and Italy.

Here are some of the project’s performance measures:

More information

[I] http://www.letsdoitworld.org (accessed on 12 April 2010)

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Performance Management / Measurement Jobs: Corporate Scorecard Manager

Monday, April 12th, 2010

The job following job advertisement was advertised on 8 April 2010 by Pertemps Ltd, a UK based recruiting agency.

Applications can be submitted online following this link.

Job title: Corporate Scorecard Manager
Job ref: 257739
Job description: A global organisation based in the heart of the West end is seeking a competent individual to join them.

• To be the global manager of the client’s Corporate Scorecard for Performance Measurement; • To ensure the scorecard process runs efficiently and effectively; to act as the global source of expertise on the scorecard and the data produced within the scorecard process; • To undertake analysis of the scorecard data in combination with data from other relevant sources to provide information and recommendations to guide management decision-making

This role will manage the presentation of numeric & non-numeric performance data for presentation to 11 regional managers. This data is to be used to inform their planning decisions. The client is in the not for profit sector, so their metrics are non-financial.

The role will involve using IT systems which are currently in development, and will need taking forward.

Balanced Scorecard experience would be beneficial, but it is the ability to engage with & present data appropriately that is essential.

A good relationship builder, self starter with strong IT database experience would be ideal. SAP is desirable.

This role is for 3 months, and will pay £120-£150 per day.
Location: London
Region: London
Country: United Kingdom
Type: Temporary
Hours: Full-Time
Salary: 120.00 to 150.00 per day (Pound Sterling)
Application deadline: 07/Jul/2010
Start date: ASAP
Company name: Pertemps
Contact name: Linda Moran
Phone: 0207 6211304
Fax: 0207 6266671
Visit the website: http://www.pertemps.co.uk

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Posted in Jobs, Performance Management, Performance Measurement, Uncategorized | No Comments »

From Performance Measurement to Management in the Local Government – ICMA Case Studies

Saturday, April 10th, 2010

The Center for Performance Measurement from the International City-County Management Association (ICMA) published in 2008 the book intitled „What Works: How Local Governments Have Made the Leap from Measurement to Management”.

This resource from ICMA is directed towards helping local public administrations to deal with and improve their performance measurement initiatives, by putting under the reader’s attention no less than 70 case studies featuring successful practices in the field of performance management and measurement, all coming from ICMA members.

Source: Center for Performance Management, ICMA, 2008

The book is divided into 16 individual chapters, presenting case studies in 15 areas of local public administration service, from Code Enforcement, Facilities Management and Purchasing to Human Resources, Information Technology and Youth Services.

One featured example in this book is the City of Albany, Oregon, represented by its Albany Fire Department and Albany Public Library. The Fire Department showcase illustrates that, for the year 2006, 97% of citizens rated the quality of contact with the Department as excellent, whereas the figure was of 96% in respect to the contact with the Department’s emergency medical center, both numbers being above the national average. The results represent an evidence of the Department’s staff efforts and customer-service trainings, as the Albany’s emergency call volume on a per capita basis makes the city one of the busiest in the state of Oregon (City of Albany, Oregon , 2008).

The Albany Library case study reported circulating an average number of 22.1 items per borrower, against a national average of 12.4 items, due to the strong community support and the increase in the Library’s budget for acquisitions.

Note:

The International City-County Management Association (ICMA) was founded in 1914 to provide technical and management assistance, training and information resources to its members and the local government community. Its mission is to create excellence in local governance by developing and fostering professional local government management worldwide (Center for Performance Management, ICMA, 2008)

References:

Center for Performance Management, ICMA (2008), What Works: How Local Governments Have Made the Leap from Measurement to Management, ICMA, Washington, DC.

City of Albany, Oregon (2008), „Albany Featured in Performance Measurement Book” press release, available at: http://www.ci.albany.or.us/services/news_releases/show_item.php?id=819 (accessed 10 April 2010).

The Center for Performance Measurement from the International City-County Management Associations (ICMA) published in 2008 the book intitled „What Works: How Local Governments Have Made the Leap from Measurement to Management”.

This resource from ICMA is directed towards helping local public administrations to deal with and improve their performance measurement initiatives, by putting under the reader’s attention no less than 70 case studies featuring successful practices in the field of performance management and measurement, all coming from ICMA members.

The books is divided into 16 individual chapters, presenting case studies in 15 areas of local public administration service, from Code Enforcement, Facilities Management and Purchasing to Human Resources, Information Technology and Youth Services.

One featured example in this book is the City of Albany, Oregon, by its Albany Fire Department and Albany Public Library.

For example, the Fire Department showcase illustrated that, for the year 2006, 97% of citizens rated the quality of contact with the Department as excellent, whereas the figure was of 96% in respect to the contact with the Department’s emergency medical center, both numbers being above the national average. The results represent an evidence of the Department’s staff efforts and customer-service trainings, as the Albany’s emergency call volume on a per capita basis makes the city one of the busiest in the state of Oregon.

The Albany Library case study reported circulating an average number of 22.1 items per borrower, against a national average of 12.4 items, due to the strong community support and the increase in the Library’s budget for acquisitions.

Note:

The International City-County Management Associations (ICMA) was founded in 1914 to provide technical and management assistance, training and information resources to its members and the local government community. Its mission is to create excellence in local governance by developing and fostering professional local government management worldwide.

References:

Center for Performance Management (2008), What Works: How Local Governments Have Made the Leap from Measurement to Management, ICMA.

City of Albany, Oregon (2008), „Albany Featured in Performance Measurement Book” press release, available at: http://www.ci.albany.or.us/services/news_releases/show_item.php?id=819 (accessed 10 April 2010).

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Performance Management taxonomy – linking Performance Measurement and Management

Friday, April 9th, 2010

smartKPIs.com Performance Architect update 14/2010

Taxonomy is a knowledge management tool used to provide structure to unstructured information. It is about categorizing individual elements into groups, categories or hierarchies based on common elements. The purpose of developing taxonomies is to enable findability and facilitate the identification of patterns. An example of taxonomy is the grouping of organisms in an ordered hierarchy that indicates natural relationships.

In business, taxonomies are used to group and categorize products and services in catalogs, to structure website contents and for structuring data in the document management system, among other uses. Taxonomies can also facilitate the understanding of concepts, by mapping the main topics relevant to in multiple, independent categories.

A taxonomy for Performance Management as a discipline is particularly useful, as the concept of Performance Management is generally perceived vastly differently in both practice and academic research. As a discipline, it is still in formation and there is no unified body of knowledge outlining its structure and boundaries. Below is an initial draft of the taxonomy for performance management. It is listed in a linear format, as it is still work in progress. A more complex map of the taxonomy can be structured once it matures:

Performance management

Levels of use

  • Organizational(Strategic)
  • Functional (Operational)
  • Individual (Employees)

Functions

  • Establishment of desired outcomes
  • Measurement of outcome achievement
  • Monitoring of how plans are implemented
  • Facilitation of learning by performance results analysis
  • Alignment of organizational systems to a central performance management system
  • Communication of plans and progress towards meeting them to all staff
  • Communication of key performance data to external stakeholders
  • Motivation of staff towards goal achievement

Key processes

  • Performance management system design – architecture
  • Performance management system implementation – building
  • Performance management system maintenance – use

Tools

  • Performance management business systems
  • Performance management software systems
  • Performance management processes
  • Performance management subject matter experts

Systems or frameworks

  • Tableau de bord
  • Performance Prism
  • Balanced Scorecard

Subsystems

  • Performance measurement
  • Performance analysis and modeling
  • Performance management review

Direction instruments

  • Vision
  • Mission
  • Values
  • Destination statement
  • Critical success factors / value drivers / key results indicators
  • Strategy map

Performance measurement instruments

  • Goals / Objectives
  • Measures
  • Performance indicators / metrics
  • Key Performance Indicators
  • smartKPIs
  • Scorecards
  • Dashboards

Performance management review instruments

  • Performance reports
  • Performance evaluations
  • Initiatives

Listing and grouping such elements is a good first step. Exploring the relationships between them and linking them in a map structure will provide a much richer picture.

Stay smart! Enjoy smartKPIs.com!

Aurel Brudan

Performance Architect,
www.smartKPIs.com

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Posted in Performance Architect update, Performance Management, Performance Measurement | No Comments »

Over 3100 Key Performance Indicator (KPI) examples on www.smartKPIs.com

Thursday, April 8th, 2010

www.smartKPIs.com registered users can now select their Key Performance Indicators (KPIs) from over 3100 Performance Measures documented and published in the online repository. The team focused in the last few days on publishing examples from the Real Estate, Education & Training, Professional Services – Accounting industries.

The functional areas with the highest number of KPI examples are:

The industries with the highest number of documented performance measures are:

Example of a documented performance measure: # Real estate transactions completed

User experience on http://www.smartKPIs.com

  • Learn: To learn more about performance management and Key Performance Management visit the Resources section.
  • Explore: To explore the library of KPI examples by navigating the functional area and industry directory, visit the Browse KPIs section.
  • Customize: To build your customized KPI library by saving favorite examples for later use, visit the My KPIs section.
  • Contribute: To propose a new example of KPI, visit the Submit KPIs section.
  • Collaborate: To collaborate with other users and to discuss KPI examples, add comments on each KPI description page.

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Google Internet Stats – the latest industry facts and insights

Wednesday, April 7th, 2010

Google launched in the autumn of 2009 a new resource page called “Internet Stats” which “brings together the latest industry facts and insights” (Google Internet Stats, 2010).

The information is collected from certain third party sources, all specified on the micro-site, and catalogued into five categories, each with more subcategories:

  • Technology: Broadband; Devices; Mobile; Speed
  • Macro Economic Trends: Rest of the World; UK
  • Media Landscape: All media; Online
  • Media Consumption: Changes in Media Usage; Demographic Usage; Media Consumption Stats; Media Multi-tasking; Personalised Media Experiences
  • Consumer Trends: Community; Entertainment; Information; eCommerce

Visitors can also submit stats, which will be verified by Google’s teams before publishing (Google Barometer Blog, 2009).

Here is an image of the Macro Economic Trends Internet stats from this tool:

Source: Google Internet Stats (2010)

Currently, this initiative is available only on the Google’s UK landing page.

References

Google Internet Stats (2010), available at http://www.google.co.uk/intl/en/landing/internetstats/ (accessed on 29 March 2010)

Google Barometer Blog (2009), “New! Internet Stats all in one place”, available at http://googlebarometer.blogspot.com/2009/09/new-internet-stats-all-in-one-place.html (accessed on 29 March 2010)

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Performance measurement in the social gaming industry – KPIs for online games

Tuesday, April 6th, 2010

Along with the rise of social networking sites, a new type of games emerged and found favorable grounds to develop. These are the so called social games, simple games that let people play with their friends on networking sites such as Facebook. (Gross, D., CNN, 2010)

One developer of such games, Zynga, uses indicators to monitor their games’ attractiveness in order to improve them, and even focus them efficiently towards social causes (Zynga, 2009). Some of the performance measures are:

  • # Unique active players per month per game
  • # Unique active players per day per game
  • % Female players
  • # Average session length
  • # Most popular time to play
  • # Users purchasing virtual goods per month
  • % Revenues from direct user purchases
  • $ Funds raised for social causes by purchasing virtual goods across games

Source: Gross, D., CNN, 2010

The most popular games developed by Zynga are FarmVille, Mafia Wars, Cafe World or FishVille, out of which FarmVille won the Best New Social/Online Game Award in 2010 at the Game Developers Choice. One measure used to evaluate the success of the game is the number of players per month, as Bill Mooney from Zynga states: “85 million players a month can’t be wrong” (Zynga, 2010).

One essential element of social games, which also makes them so popular, is that they “can be played in a tab on your browser while you’re on a conference call”, as Mark Pincus, a veteran Web entrepreneur who created Zynga in 2007, said (Gross, D., CNN, 2010).

References

Gross, D., CNN (2010), “The Facebook games that millions love (and hate)”, available at http://edition.cnn.com/2010/TECH/02/23/facebook.games/index.html?hpt=C1 (accessed on 6 April 2010)

Zynga (2010), “FarmVille nabs inaugural social games award at GDC”, Zynga Blog, available at http://blog.zynga.com/2010/03/farmville-nabs-inaugural-social-game-award-at-gdc.html (accessed on 6 April 2010)

Zynga (2009), “Zynga Hits 100 Million Unique Visitors Per Month”, Zynga Blog, available at http://blog.zynga.com/2009/11/zynga-hits-100-million-unique-visitors-per-month.html (accessed on 6 April 2010)

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