Archive for 2010

Over 5600 Key Performance Indicator (KPI) examples on www.smartKPIs.com

Thursday, December 16th, 2010

Registered members of the www.smartKPIs.com community can now select their Key Performance Indicators (KPIs) from over 5600 performance measures documented and published in the online repository. The team focused over the last few days on publishing examples from the Finance functional area. Examples from the Real Estate industry were also added.

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: % Cash flow return on investment (CFROI)

smartKPIs Premium

The gold standard‘ in KPI documentation is now available on smartkpis.com. At the core of smartKPIs Premium is a set of over 1,000 KPI examples preselected by the eab group’s research team as the most relevant for practice across functional areas and industries. These were thoroughly documented in over 30 fields, 3 times more than the standard used for most other KPIs.

Example of a performance measure that was documented for smartKPIs Premium section: # Employee satisfaction

Registered member 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, ask questions on smartKPIs Answers, or contribute to the smartKPIs Forum.
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Shopping Centre Performance – Urbis Retail Averages 2010

Wednesday, December 15th, 2010

Urbis, a Melbourne based real-estate consulting company has released Urbis Retail Averages 2010, this year’s edition of the annual survey of shopping center performance the company has been producing since 1992 . Conducted in cooperation with the Shopping Centre Council of Australia and using the Counci’s sales reporting standards, the study provides key results and analysis of the sector for both regional and sub-regional centers. 59 regional and 167 sub-regional shopping centers submitted data for this year’s edition.

Some of the performance measures analysed by the report are:

  • $ Average turnover per centre
  • % Turnover growth rates
  • % Occupancy cost ratio of sales
  • $ Sales per square metre
  • $ Average gross leasable area (GLA)

The study outlines a sector in expansion in Australia:

Source: Urbis, 2010

In 2009-2010 the biggest sales decrease in Australia for shopping center based stores was in leisure and homewares:

Source: Urbis, 2010

The gap between average turnover per regional centers compared to sub-regional centers continued to expand:

Source: Urbis, 2010

For more details on the report or to place an order visit: http://www.urbis.com.au/

References

Urbis, 2010, Urbis Retail Perspectives, November 2010, available at http://www.urbis.com.au/downloads//Retail%20Perspectives%20Nov-101.pdf, accessed on 15 December 2010.


Over 5500 Key Performance Indicator (KPI) examples on www.smartKPIs.com

Wednesday, December 15th, 2010

Registered members of the www.smartKPIs.com community can now select their Key Performance Indicators (KPIs) from over 5500 performance measures documented and published in the online repository. The team focused over the last few days on publishing examples from the Sales and Customer Service and the Information Technology functional areas. Examples from Government – State /Federal and Government – Local sectors were also added to the KPIs repository.

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: % Business disruptions caused by a lack of adequate IT capacity

smartKPIs Premium

The gold standard‘ in KPI documentation is now available on smartkpis.com. At the core of smartKPIs Premium is a set of over 1,000 KPI examples preselected by the eab group’s research team as the most relevant for practice across functional areas and industries. These were thoroughly documented in over 30 fields, 3 times more than the standard used for most other KPIs.

Example of a performance measure that was documented for smartKPIs Premium section: # Employee satisfaction

Registered member 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, ask questions on smartKPIs Answers, or contribute to the smartKPIs Forum.
registered members

Working capital performance management

Tuesday, December 14th, 2010

All tied up – Working capital management report 2010, released by Ernst&Young in earlier this year, presents an annual analysis of the working capital performance based on the responses received at the Annual Working Capital Management Survey for 2009. Its key findings rely on the review of the working capital performance of the largest 2,000 companies (by sales) headquartered in the US and Europe, the analysis being based on companies’ latest scale 2009 reports.

Brief context

Working capital management has become an area of stronger focus in recent years. According to the most recent Capital Confidence Barometer, a survey by Ernst & Young and the Economist Intelligence Unit of over 800 executives from large global organizations, 86% of respondents reported that their companies have reviewed working capital processes and are now more focused on cash (Ernst&Young, 2010).

Key findings

  • Nearly two-thirds of the companies included in the annual working capital survey reported a deterioration in working capital performance in 2009 compared to 2008. Overall, companies have reduced their levels of working capital by as much as 11% in the US and 13% in Europe since 2002.
  • Source: Ernst & Young (2010)
  • Cash-to-cash (C2C) increased by as much as 6% in the US and 3% in Europe in 2009 compared with 2008. The metrics used bellow are DSO (Days sales outstanding), DIO (days inventory outstanding), DPO (days payable outstanding),C2C (cash-to-cash). Overall cash-to-cash for the US in 2009 was 3.5 days, or 8% below that of Europe.

Source: Ernst & Young (2010)

  • Working capital performance diverged widely across industries: non-cyclical industries (food producers, retailers, pharmaceutical, telecom operators) varied more, while cyclical industries (chemicals, auto parts, steel, semiconductors) showed a significant deterioration in 2009. Among the non-cyclical industries in the US, food and general retailers reported a strong performance, due to an ongoing reduction in the levels of inventory and a recovery in payable.
  • Overall, the companies based in US exhibited better working capital performance than those Europe – headquartered companies, as indicated by the cash-to-cash results (Ernst&Young, 2010).

Though working capital performance deteriorated in 2009, significant potential for improvement is pointed through the wide variations assessed in performance between companies within each industry – up to US$1.1 trillion of cash for the leading 2,000 US and European companies. The report presents as main improvement point, the leading-practice working capital strategies and processes can generate significant operating cost reductions, this clearly affecting the cost of sales and general administrative expenses.

References:

Ernst & Young (2010), All tied up – Working capital management report 2010, available at: http://www.ey.com/DE/de/Home/Home (accessed 5 December 2010)

Ernst & Young (2010), Capital Confidence Barometer, available at: http://www.ey.com/Publication/vwLUAssets/Capital_confidence_barometer/$FILE/Capital_Confidence_Barometer_2010.pdf (accessed 5 December 2010)

Over 5400 Key Performance Indicator (KPI) examples on www.smartKPIs.com

Monday, December 13th, 2010

Registered members of the www.smartKPIs.com community can now select their Key Performance Indicators (KPIs) from over 5400 performance measures documented and published in the online repository. The team focused over the last few days on publishing examples from the Supply Chain, Procurement, Distribution and the Information Technology functional areas. Examples from Government – State /Federal and Government – Local sectors were also added to the KPIs repository.

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: % Changes impacting core service time and SLA service hours

smartKPIs Premium

The gold standard‘ in KPI documentation is now available on smartkpis.com. At the core of smartKPIs Premium is a set of over 1,000 KPI examples preselected by the eab group’s research team as the most relevant for practice across functional areas and industries. These were thoroughly documented in over 30 fields, 3 times more than the standard used for most other KPIs.

Example of a performance measure that was documented for smartKPIs Premium section: #Bid-to-cover ratio

Registered member 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, ask questions on smartKPIs Answers, or contribute to the smartKPIs Forum.
registered members

Social Media for Business in 2010

Friday, December 10th, 2010

Social media is infiltrating the business world, not only a tool used for personal interaction in the online medium, but also a powerful marketing resource that companies can use, at very low costs, to increase their visibility and improve their customer relations.

A survey conducted in June 2010 revealed that in the past 18 months about 66% of the companies surveyed have adopted social media (SmartBrief and Summus, 2010). The survey population was made of almost 6500 companies among the readers of SmartBrief (over 3,5 million subscribers coming from diverse industries), 92% being U.S. companies.

The same survey revealed that the top favorite platforms in this context are Facebook and Twitter, their extended volume of members making them attractive for businesses, also:

Source: SmartBrief and Summus (2010)

Although the benefits of using social media for business purposes are not few, they are mostly intuitively assessed, as a very low percentage (less than 15%) of the respondents state they measure the return on their social media investment:

Source: SmartBrief and Summus (2010)

Although it is recognized  that actually measuring an accurate figure as the return on your investment in social media can be quite difficult, there are other means to evaluate how your efforts pay back and how your communities begin working in favor of your brand, this allowing you to invest less and less and rely more and more on the customer. In this context, the suggestion is to focus intensively on what it is called “influencers” that can further on speak for the brand to other, larger communities.

As shown before, many businesses are still at their very early stages with social media efforts, thus an approach where they engage with limited numbers of consumers that can influence at the expense of larger audiences, although not in the very spirit of social media, can be a better alternative.

The Social media influencers 2010 report released by FreshNetworks reveals which are the most effective social media monitoring tools in what regards identifying influencers across several social media platforms. The research was conducted for the topic of “organic baby food” and a scorecard was developed for each tool considered, rating aspects such as: training, user interface, drilldown, integration of tools etc.

The researchers found that Bandwatch was the best to find influencers on forums, while Radian6 was the best to find influencers on Twitter (FreshNetworks, 2010). Below are the overall number of influencers identified by each tool, without any human analysis:

Source: FreshNetworks (2010)

References

FreshNetworks (2010), Social media influencers 2010. Social media monitoring tools, mummy bloggers and organic baby food, UK.

SmartBrief and Summus (2010), The State of Social Media for Business, US.

Optus Social Media Index Report – An insight in the Australian small and medium business sector

Thursday, December 9th, 2010

A recent report prepared by Stacombe Research and Planning on behalf of Optus Small and Medium Businesses provides a new and interesting perspective on how small to medium businesses view and use social media.

Study methodology

The study is based on both a qualitative and quantitative research:

  • The qualitative component of the study comprises three interviews with key social media opinion leaders and five discussion groups involving six to eight employees and owners of small and medium business;
  • The quantitative component of the study is based on interviews with 340 employees of small to medium businesses responsible for making key social media decisions within their organizations.

Key findings

According with the research results, thought there is an overwhelming number of social media tools available, not all are engaged by small and medium businesses. The most appealing ones are Facebook, YouTube, Twitter and LinkedIn.

As the study further reveals, it is expected that in the next years the growth of the „big four” social media tools, in the preferences of small and medium businesses to increase with a steady pace, with LinkedIn benefiting the most.

The study also reveals that, while becoming more popular within  business environment, social media tools serve different purposes in the organizational strategies. While, businesses planning to become involved in social media, primarily see it, as a tool „to drive sales through, acquisitions and retention”, those already active in social media „perceive the main benefits in networking and building relationships with the customer”. The major difference between these two types of businesses stay, as the study further reveals, in the metrics used to determine success.

Performance indicators most likely to be used by companies already using social media tools are mostly quantitative in nature, such as: # Followers, # Fans, # Friends. On the other hand, those businesses looking to adopt social media tools in the future are more focused on qualitative aspects, such as # Quality of fans, or # Quality of followers.

Optus Social Media Index Report – video presentation

Conclusion

In the last years social media presented a powerful opportunity for small and medium businesses to connect and get engaged with customers and build relationships with prospects. Among the key benefits are:

  • Opening new revenue streams;
  • Establishing new relationships;
  • Cementing current customer contacts;
  • Enhancing online brand reputation.

References

Optus Business Social Media Index, (2010), Report Summary, available at http://kathiemelocco.net.au/wp-content/uploads/2010/09/SMReportSummary.pdf , (accessed 12 December 2010)

HR role and trends in 2010

Wednesday, December 8th, 2010

The  report HR Trends in B.C. published in June 2010 by British Columbia Human Resource Management Association (BC HRMA), one of the largest HR association in Western Canada, presents the key findings based on the survey results regarding the 2010 HR role and trends.

One of the main 2010 trend underlined within the report is the shift away from the negative projections of 2009 towards a more positive future with steady growth in revenues and staffing levels. While the private sector projected growth in revenues and staffing levels, the public sector projected a contraction in both revenue and staffing. The priorities in the public sector were negotiating collective agreements and managing change, 43% of public sector organizations indicating a reduction in staffing levels and 38% a reduction in staff revenue.

For the private sector, the HR functions focus on increasing the leadership capability and ensuring staff groups performance. 2009 was a year of change, that determined most organizations to focus on getting the best contribution and performance from the leaders and employees. The role of HR in supporting this direction was optimizing processes in order to increase productivity and performance, according to the organizational strategy. In the context of a slight economic recovery in 2010, organizations are cautious to rebuild staffing levels and intend to handle growth in organizational activity with their current staff group (BC Human Resource Management Association, 2010).

Source: BC Human Resource Management Association (2010)

The HR budget size did not influence directly the priorities and trends of HR in 2010, as reveled by the respondents. Productivity and growing skills gap have become clear expectations towards HR in 2010, being prevalent themes in the business. However, the report indicates for the first time a link between the involvement of HR in the strategic organizational process, the organization’s revenue projections and the HR budget repercussions. As the survey results show, the forecast revenue growth and HR budget growth were more likely to be positive in organizations where HR was involved in the development of strategy.

The survey was completed by 677 respondents from the B.C. during April 2010, the full report being accessible to the BC HRMA members.

References:

BC Human Resource Management Association (BC HRMA) (2010), HR Trends in B.C. (short version), available at: http://www.bchrma.org/pdf/trends2010-short.pdf (accessed 5 December 2010)

Talent Retention – a key value driver of organisational performance

Tuesday, December 7th, 2010

One of the key challenges faced by organization’s leaders in the current business environment is how to retain their talents in order to enable business success. As Broman (2010) acknowledges, “retaining talents isn’t simply a question of “headcount” – it can make the difference between the success or failure of a company and the winning and losing of market share, investors, new clients and contracts”.

Identifying and tracking the key metrics to fine tune retention strategies, is one of the directions that need to be followed in order to secure business success.

One of the topics discussed during the conference “Performance Measurement & KPI for HR” organized by Asia Business Forum in Kuala Lumpur, Malaysia between 29th November-1st December, covered in detail these subject.

Facts and figures on the retention trends

According to a Development Dimensions International Inc. Report based on 745 employees responses to a retention survey submitted to 118 organizations:

  • 1/3 of all employees surveyed expect to leave job within next year;
  • Turnover costs the average organization more than $27 million per year;
  • Almost half of the organizations surveyed don’t have any formal strategies for addressing retention. (Adam, 2010)

According with another report presented in The Business Times, Singapore 2010, researching the attrition rate in Asia for 2010, the situation presents as follows:

  • Australia – 7,7%
  • Indonesia – 5,5%
  • Malaysia – 12,2%
  • South Korea – 7,3%
  • Thailand – 6,4%
  • Singapore – 9,1 % (Adam, 2010)

Job satisfaction – a key factor in employee retention

According with Adam (2010), one of the major causes of employee’s decision to leave organizations begins with a sense of low job satisfaction. According with him, “job satisfaction represents a person’s emotional feelings about his of her work. When work is consistent with employees’ values and needs, job satisfaction is likely to be high.”

The most important dimensions of job satisfaction can be depicted in the image below.

Source: adapted from Adam, 2010 (citing Schneider et al, 2003)

Importance of employee retention

Among the major factors of employee turnover that negatively impact the organizational performance are:

  • Reducing staff morale
  • Increasing training and recruitment costs
  • Conducting to inconsistencies in services, and
  • Being a self perpetuating problem (Adam, 2010)

Strategies for employee retention

Several strategies can be implemented in order to secure better and effective employee retention.

Source: adapted from Adam, 2010 (citing Lee & Maurer, 1997)

Major Retention Drivers

Among the most important retention drivers as presented by Adam (2010) citing a report of Career System International, 2005, are  Exciting work and challenge, Career growth, learning and development and Working with great people and relationships.  All important retention drivers, up to 15, can be depicted in the table below.


Source: adapted from Adam, 2010 (citing Career System International report, 2005)

KPIs for Retention – HR Functional Area – smartKPIs.com

For more insights on the best Key Performance Indicators for measuring HR retention strategies visit smartKPIs.com KPI example section. Among the most relevant KPIs recomended for measuring retention performance are:

References

Adam, M.H. (2010), Retaining Talents. Maintaining an Effective Retention Indicator, proceeding of the conference Performance Measurements & KPI for HR, Asia Business Forum 2010, Kuala Lumpur, Malaysia, 30 November 2010, representing Aberdeen Learning Solutions, Singapore

Broman, F. (2010), website, available at http://www.francesbroman.com/Services_retainingtalents.htm, (accessed 7 December 2010)

Additional resources

Aberdeen Learning Solutions, (2010), website, available at http://www.aberdeenls.com/, (accessed 7 December 2010)

Development Dimensions International (2005), Retaining talent: A Benchmarking Study, report prepared by Bernthal, P.R. & Wellins, R.S., available at http://www.ddiworld.com/pdf/retainingtalentabenchmarkingstudy_es_ddi.pdf, (accessed 7 December 2010)

Lee, T.M. & Maurer, S.D. (1997), The Retention of Knowledge Workers with the Unfolding Model of Voluntary Turnover, Human Resource Management Review , Vol. 7, pp. 247–275.

Schneider, B.; Hanges, P.J.; Smith, D.B.  & Salvaggio, A.M. (2003), Which Comes First: Employee Attitudes or Organizational Financial and Market Performance?, Journal of Applied Psychology Vol. 88, pp. 836–851

Measuring the performance of China’s Booming Skyscraper Industry

Monday, December 6th, 2010

Whist the recent financial crisis has caused most of the cities around the globe such as Chicago, Moscow and Dubai to put their plans for new skyscrapers on hold, China seems to be doing the exact opposite with more construction work being carried out (McDonald, 2010).

Riding on its country’s continuous economic boom, China’s construction industry seems to be flourishing, with many towering skyscrapers being erected or currently under construction in different parts of China over the last few years. Some of the notable skyscrapers include Shanghai Tower (Shanghai, under-construction), Kingkey Finance Centre (under-construction), China 117 Tower (Tianjin, under-construction), Guangzhou TV Tower (Guangzhou, completed), or Nanjing Greenland Financial Centre (Nanjing, completed).

Source: Trendir (2008)

The truth is that, excluding China, the year-on-year rate of growth in global construction activity sinks to almost zero. Construction activities in China itself in 2010 have actually contributed to almost 20% of the growth in global construction activity.

Source: CRU, WSD and Macquarie Research (2010)

The construction boom in China will have significant ripple effect across other industries, such as steel, building materials, power, metals, transport etc (Fernando, 2010). Therefore, with China currently leading the construction of skyscrapers around the globe, it is of interest to identify and monitor a few skyscraper construction related performance indicators in China.  This will provide better means to assess the performance of the skyscraper industry.

China’s Booming Skyscraper Industry: Facts and Figures

  • % Share of world 100 tallest buildings by country: 34% in China
  • % Share of world 100 tallest buildings by region: 45% in Asia
  • # Share of world 15 tallest buildings by country: 6 in China
  • # Share of world 10 tallest buildings under construction: 4 in China
  • # Number of stories/floors of building: Shanghai Tower 121 stories
  • # Height of tower: Shanghai Tower 632 meter
  • % Tenants signing in advance: 50 – 60% in China
  • # Surface area under construction
  • # Average number of staff per office building
  • # Number of construction project (McDonald, 2010)

Reference

McDonald (2010), China’s skyscraper boom buoys global industry, available at http://news.yahoo.com/s/ap/as_china_skyscraper_empire (accessed 6 December 2010).
CRU, WSD and Macquarie Rearch (2010), China Builds, World Watches, available through http://www.advisoranalyst.com/glablog/2010/03/15/china-construction-boom-or-bust/ (assessed 6 December 2010).
Fernando (2010), China’s Construction Boom Pushes Power Consumption Up 25%, available at http://www.businessinsider.com/chinese-power-consumption-2010-4 (accessed 6 December 2010).
Trendir (2008), Modern China Architecture – Shanghai Tower Twists its Way to the Top, available at http://www.trendir.com/ultra-modern/modern-china-architecture-shanghai-tower-twists-its-way-to-the-top.html (assessed 6 December 2010).

Managing customer complaints in an online environment

Friday, December 3rd, 2010

Customer complaints can greatly affect the company brand and reputation, moreover since the Internet has increased its impact upon decision makers through being an easily accessible and transparent environment. Nowadays it is very simple to post online negative reviews regarding the products or / and services received.

Internet users express and voice their service experiences on online platforms, using even more complex sites than Twitter and Facebook, such as specialized complaint aggregators. These sites are search engine optimised, appearing high on Google Search results when a user either searches a brand name or a combination of terms such as [brand name] + complaints.

The specialized complaint aggregators have initially registered increased usage because they are easily accessible and people feel part of a community. With a high level of transparency, these sites can cause problems even to popular brands, challenging the PR and brand management teams. Sometimes, more brand damage can be done online than in a small article in a daily newspaper.  For example, when Jeff Jarvis (author of What Would Google Do?) complained about the quality of Dell services and products, he got more than 700 comments to his post (Jarvis, 2005). Later on, this led to quality improvement initiatives for products and services offered by Dell.

Source: Paternoster (2010)

However, the chart above indicates that the number of visitors has been declining in 2009, this being possible caused by several reasons:

  • companies are listening to customer feedback and improving their products, services and processes
  • better techniques and procedures for solving customer complaints, therefore removing the need for the customer to be more vocal about the complaint
  • companies have increased their performance in managing their online reputation (Paternoster, 2010).

The chart only includes specialized complaint aggregators, without offering an analysis of complaints on other online platforms such as Twitter, Facebook and personal blogs.

Managing complaints in an online environment can be rather challenging. However, it can be done by having a brand management team and customer service to handle reputation issues that occur, including dealing with customer complaints.

Some Key Performance Indicators that can be very useful in measuring and managing customer complaints are:

Additionally a large number of Key Performance Indicator examples for Customer Service are available in the KPI examples section of smartKPIs.com.

References

Paternoster, L. (2010), Managing your brand online: Dealing with complaints sites, available at: http://www.instituteofcustomerservice.com/1711-3935/Managing-your-brand-online-Dealing-with-complaints-sites.html (accessed 30 November 2010)

Jarvis, J. (2005), Dear Mr. Dell, available at: http://www.buzzmachine.com/2005/08/17/dear-mr-dell/ (accessed 30 November 2010)

Additional resources

smartKPIs.com (2010), Key Performance Indicators examples from Sales and Customer Service functional area, available at http://www.smartkpis.com/kpi/functional-areas/sales-and-customer-service/customer-service/ (accessed 30 November 2010)

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