June 21 2012 Process Performance Metrics Presentation

MCS

Developing and Using Process

Performance Metrics

Calgary Community of Business Process Management Professionals

June 21, 2012

Gordon Masiuk, PresidentMasiuk Consulting Services Ltd.www.business-performance-excellence.ca

MCS

What are your expectations

from this session?

MCS© 2012 Gord Masiuk

Agenda

• Overview of Performance Metrics

• 6 main Performance Metrics

• Key Steps and Considerations in Developing Performance Metrics

• Aligning Metrics to Organizational Strategy


Exercise

• In small groups, take 5 minutes and identify 5-6 performance metrics that are important in your organizations, your division, your team, or for yourself.

• Print those metrics on the yellow stickies

• Nominate someone from your group to share your metrics.


Why are Measures Important?

MCS

Why are Processes Important?



All work gets done through a formal or informal process!



Deming's 85/15 rule:

85% of a worker's effectiveness is determined by the system they work within, only 15% by their own skill.

MCS

Why do we need to measure performance?


He’s right! When you look at it that way, it’s not so bad!


Why Measure Performance?

• Helps us know if we are accomplishing results!

• Measures put goals in perspective

• Provide a baseline of performance which can be used to quantify and assess changes in results over time

• Pinpoint opportunities for process improvement

• Understand capability of the process and what we can expect from a statistical perspective

• Provides people with feedback to help them understand how they are performing and what they need to continue doing, or do differently


Process Metrics

• Reliable process metrics need to measure aspects of the process/output of the process that are linked to business strategy and corporate goals.

• Process metrics by themselves can provide for:

– Establishment of a baseline of performance

– Tracking of performance

– Communication about performance

– Identifying areas for improvement

• Process metrics do not by themselves generate improvement – improvement depends on metrics, however, to effect improvement, a well focused plan needs to be developed, implemented and monitored.


Output Outcome

Effectiveness

Customer Requests, Input or Feedback

Input

Internal Efficiency

Process Model

Value AddedTransformation

Process

© Gord Masiuk 1994

Suppliers


Types of Process Measures

• Input Measures: assessment of products, services or information that feed into a process. E.g.: supplier product/service quality, on time delivery, stakeholder feedback.

• Process/Efficiency Measures: assessment of how well the process is functioning. E.g.: cycle time, task time, uptime, accuracy, completeness, degree of rework/duplication, cost.

• Output/Result Measures: assessment of the outputs of the process. E.g.: Quality - meeting employee/team/stakeholder requirements, quantity/volume produced.

• Outcome Measures: assessment of the outcome (impact) of outputs on the business and stakeholders. E.g.: stakeholder satisfaction, business value, productivity.


Types of Process Measures:Example: Geoscience Approved to Survey Pending

Input Measures: • Accuracy and Completeness of 7 mandatory data fields inputted

into WL.Process/Efficiency Measures: • Cycle time from GA to SP, • Degree of rework and delays associated with incomplete or

inaccurate data.Output/Result Measures: • Accuracy and completeness of information in “survey pending”

electronic notification to Survey Coordinator. Baseline: 60% of surveys pending are 100% complete and accurate.

Outcome Measures: • Survey Coordinator satisfaction of data provided, • Number or % of surveys pending meeting mandatory data fields

that can move to “survey requested”, • Number of notifications to reservoir engineers or geologists from

survey coordinator requesting complete or accurate data for survey pending.


SMART Goals and Metrics

Goals Metrics

S Specific

M Measurable

A Actionable

R Relevant

T Timely

Is the metric clear, easy to understand?

Is the data readily available?

Can you influence a change in the result?

Does the metric measure what is important?

How often do you need the data?

Is the result or outcomeclearly stated?

Can the result be measured?

Can the goal be achieved?

Does the goal link to thestrategy or business plan?

Is the completion time of thegoal clearly identified?

© 2001 Gord Masiuk


The 6 Key Performance Indicators

• Quality

• Time

• Cost

• Quantity

• Satisfaction/Importance

• Value/business results

© 2001 Gord Masiuk


Metrics Defined

Quality

• Accuracy

• Uniformity

• Reliability

• Serviceability

• Deliverability

• Utility

• Durability

– Example: % of calls dropped by your telephone service provider in the last 90 days.

© 2001 Gord Masiuk


Metrics Defined

Time

• Cycle time

• Task time

• Up time

• Down time

• Delay time

– Example: Length of time to approve an AFE from when it was submitted

– Example: Average hours of downtime of the company network per work day

© 2001 Gord Masiuk


Metrics Defined

Cost

• Labor

• Material

• Equipment

• Opportunity cost

• Cost of poor quality

• Cost added only (rework, duplication, waste)

• Life Cycle cost

– Example: average cost of 1 km of road asphalt installed on one lane of the Trans Canada Highway in Alberta in 2011

© 2001 Gord Masiuk


Metrics Defined

Quantity

• Production Volumes/Ratios

• Sales volumes/ratios

• Revenues

• Profits

• New Customers

• $, Time, People, Ideas ...

• How Much? How Little?

– Average board feet of production per day at Sawmill Plant C for Q1, 2012.

– Number of new customers acquired in 2011.


Metrics Defined

Stakeholder/Customer Satisfaction

• Requirements of stakeholders are met• Quality attributes indicated by the stakeholder• Rating of service/product by importance and

satisfaction• “Employee Engagement” rating• New customers attracted• Retention rate of current customers/employees• Customer/employee complaints

– Example: Drilling contractor satisfaction and importance ratings on promised turnaround time for invoice payment from Accounts Payable

© 2001 Gord Masiuk


Importance

Satisfa

ction

Low High

High

IMPROVEMENTIMPROVEMENTPRIORITIESPRIORITIES

REDEPLOYMENTREDEPLOYMENTOF RESOURCES?OF RESOURCES?

LOW PRIORITYLOW PRIORITYSERVICES/OFFERINGSSERVICES/OFFERINGS

(VALUE(VALUE--ADDED?)ADDED?)

Measuring Outcomes Using

A Stakeholder Satisfaction Index (SSI)

ORGANIZATIONALORGANIZATIONALSTRENGTHSSTRENGTHS

© Gord Masiuk 1994

High


Metrics DefinedBusiness Value

• Profits generated by production area

• Opportunities gained or lost

• Market share

• Company growth

• Share value

• Returns to shareholders

• Economic valuation of organization

• Awards, industry recognition, certifications

– Average net revenue/retail product category during Q4, 2011

© 2001 Gord Masiuk


Core Customer Service Metrics - Retail Example

CostCost Quality Quantity Time Quality Quantity Time Customer BusinessCustomer Business

Satisfaction ValueSatisfaction Value

MetricsMetrics

ComponentComponent

CustomersCustomers

Market ResearchMarket Research

MerchandisingMerchandising

SuppliersSuppliers

Supply ChainSupply Chain

Retail OpsRetail Ops

BrandBrand

Ad AgencyAd Agency

Retail StoresRetail Stores Service Sales Service Sales CSI Rev/ProfitCSI Rev/Profit

Services Meet Spec Services Meet Spec On Time SLA, CSI Revenue On Time SLA, CSI Revenue

Services Meet Spec Of Ads On Time Services Meet Spec Of Ads On Time SLA, CSI RevenueSLA, CSI Revenue

Accuracy Inventory Cycle Time CSI (Stores) OpAccuracy Inventory Cycle Time CSI (Stores) Optimizationtimization

Accuracy Meet Spec Cycle/Delivery CSI Accuracy Meet Spec Cycle/Delivery CSI LogisticsLogistics

Total Cost Accuracy Completeness Cycle Time Total Cost Accuracy Completeness Cycle Time SLA ProductSLA Product

Inventory of Product, Ordered Cycle Time Inventory of Product, Ordered Cycle Time BU CSI Sales, RevBU CSI Sales, Rev

Cost AccuracyCost Accuracy

Research Completeness Depth Cycle Time BU CSI Potential Accuracy Sales, Rev

[------------------Meet Requirements---------------------] Sales, Rev

MCS

Developing Process Metrics


Key Steps in Developing Process Metrics

1. Define the boundaries of the process – what triggers the process to start, and where does it end?

2. Define the output (product, service or solution) of the process –what specifically is produced?

3. Who is the stakeholder (internal or external) of the process? Why is the output important to them? What are their specific requirements? i.e.: specific attributes of the output they require?

4. Who are the suppliers to the process? What inputs do they need to deliver to the process?

5. Develop process metrics based on the stakeholder requirements and aligned with organizational goals

6. Ensure that data for the process metrics is available and reliable, and can be reported on

7. Design a process that will effectively create the desired output for the stakeholder, and is linked to the organizational goals



1. Define the boundaries of the process – what triggers the process to start, and where does it end?

• Helps you to keep from focusing on actions or requirements outside of the process, defines precisely where and when the process starts and ends. E.g.: Pit Stop

• Also, by defining the start and end of the process, the inputs and outputs can more easily be defined



2. Define the output (product, service or solution) of the process – what specifically is produced, what the result is.

• Use the “Leave it Behind Test” - An output or result is something that can be left behind (e.g.: report produced, number of wells serviced)

• Use the “Dead Man’s Test” – If a dead man can do it, it is not a result or output (e.g.: zero defects, zero accidents)



3. Who is the stakeholder (internal or external) of the process? Why is the output important to them? What are their specific requirements? i.e.: specific attributes of the output they require?

• The stakeholder is any person or organization that uses the output from the process

– Flow charts are helpful in determining who the stakeholder is, along with knowing from where/whom a request is coming from

– Determine who pays the bills

• What does the stakeholder really need and want? How do you know?

– Surveys, interviews, checklists, etc., can be helpful in determining stakeholder requirements

– Use the Stakeholder Satisfaction Index to determine what is important



4. Who are the suppliers to the process? What inputs do they need to deliver to the process?

• Suppliers can be internal or external providers of products, services or solutions

• Processes should identify metrics for suppliers including:

– Quality, quantity, timeliness, costs, compliance to specific stakeholder standards, satisfaction/importance scores

– Service Level Agreements specifying expectations will help to create consistency, and provide the framework for performance reviews



5. Develop process metrics based on the customer/ stakeholder requirements and business goals

• What does the stakeholder really need and want? How do you know?

• How do the stakeholder and process metrics align with the business goals?

• Internal process metrics need to support customer or business metrics, but may differ in nature i.e.: focusing on internal accuracy may positively affect external stakeholder metrics for timeliness.

• Select internal process metrics that allow for diagnosis of process performance. (e.g.: well DT and causes)

• Industry benchmarks can be helpful once the process has been well developed, streamlined, and improved. The industry benchmarks can be used to focus on performance critical to the company strategy.



6. Ensure that data for the process metrics is available and reliable, and can be reported on

• The need for the data to be available, reliable and consistent is critical to measuring process performance.

• Are data systems capable of tracking the metrics?

• Can the data be collected and reported to key stakeholders on a regular basis?

• Does the data allow for effective decision making?

• Identify and resolve any data integrity issues that may affect the quality of analysis, trending, results.



7. Design a process that will effectively create the desired output for the customer

• The process should be designed in such a way as to produce the desired output in the most efficient way

• Areas of potential waste, duplication, rework, delays etc., should be identified and streamlined out of the process. These typically account for 30-50% of employee time.

• Does the output meet the specifications of the customer? What data would tell us?

• Does the output contribute to a specific business outcome/result? If not, how does the process and its result support a business or customer need?


Example: Going for a Dental Checkup

• Trigger, Start and End of the “checkup”process:

• Output:

• Customer:

• Key Inputs:

• Suppliers:

• Process Metrics:

• Check Up Process:

MCS

Tools for Process Metrics


Tools For Process Analysis

• Quality Management Tools (7 improvement tools, 7 planning tools)

• LEAN 6 Sigma Tools (Value Stream Maps)

• Software (Visio, Minitab, ProVision, ARIS)

• Real time process modeling software

• Templates


TO-BE AFE PROCESS - BLOCK DIAGRAMOPERATED AFE

1.00 Project

Approved in

Capital Manager

2.00 Create an AFE 3.00 Get Approval

for AFE

4.00 Set up AFE in

SAP and Get

Network Number

5.00 Charges made

to AFE

6.00 Close AFE

Macro Process – 2nd Level Process – 3rd Level Detail



1.00 Project

Approved in

Capital Manager


for AFE

4.00 Set up AFE in

SAP and Get

Network Number

5.00 Charges made

to AFE

6.00 Close AFE

1.02 Project

information is verified

1.01 Project Manager

and/or AFE Admin

sets up project.

1.03 Email

Notifications sent to

Distribution List

1.04 Project put on

hold or cancelled.

Is the project

funded? (A)

No

Yes

Capital

Manager

1.05 Project reviewed

by PM.

Well

Launcher

Link

F rom

D ec is io n

"F "

Link

F rom

5.2.2.4

Refund

Process -

From

Decision (I)

PEEP Well

Launcher

CS

Explorer

Capital

Manager

2nd Level




1.00 Project

Approved in

Capital Manager


for AFE

4.00 Set up AFE in

SAP and Get

Network Number

5.00 Charges made

to AFE

6.00 Close AFE


1.02 Project

information is verified

1.01 Project Manager

and/or AFE Admin

sets up project.

1.03 Email

Notifications sent to

Distribution List

1.04 Project put on

hold or cancelled.

Is the project

funded? (A)

No

Yes

Capital

Manager

1.05 Project reviewed

by PM.

Well

Launcher

Link

F rom

D ec is io n

"F "

Link

F rom

5.2.2.4

Refund

Process -

From

Decision (I)

PEEP Well

Launcher

CS

Explorer

Capital

Manager

2nd Level

3rd Level

Name of person & date – typically Process LeadLast Reviewed By:

Identify what information systems and/or what screens are usedSystem/Screens Used:

Who does this? (What specific role is responsible?)Responsibility:

For this step in the process, if applicable, define the:

oTask time (actual work time);oCycle time (elapsed time – from when the step starts to when the next step would start);oCosts (can include hard costs as well as hourly labor costs X task time);oQuality attributes needed (accuracy, completeness, meeting spec/customer requirements, delivery time, etc.);oQuantity (number of outputs/cycles in this step).

Process Metrics:

What output is produced (e.g. information, analysis, document, notification, approval etc.)Outputs Produced:

What info/materials/documents/products/hardware, etc., are needed to complete this step?Inputs Required:

What causes this step to happen? (e.g. receipt of notification, phone call from someone)Trigger:

Describe the critical steps in the procedure and/or a web link to where a detailed procedure is located e.g. “8 Simple

Rules for Generating an AFE Network Number”

Procedure Description:

Write a short sentence explain why this is needed, what value is addedPurpose:

Number & Name of Sub-process (if Applicable)Sub-Process:

Name of Process StepProcess Step Name:

Process Step NumberProcess Step #:

Name of ProcessProcess:

3rd Level Process Details Template


Name of person & date – typically Process LeadLast Reviewed By:

Identify what information systems and/or what screens are usedSystem/Screens Used:

Who does this? (What specific role is responsible?)Responsibility:

For this step in the process, if applicable, define the:

oTask time (actual work time);oCycle time (elapsed time – from when the step starts to when the next step would start);oCosts (can include hard costs as well as hourly labor costs X task time);oQuality attributes needed (accuracy, completeness, meeting spec/customer requirements, delivery time, etc.);oQuantity (number of outputs/cycles in this step).

Process Metrics:

What output is produced (e.g. information, analysis, document, notification, approval etc.)

Outputs Produced:

What info/materials/documents/products/hardware, etc., are needed

to complete this step?

Inputs Required:

What causes this step to happen? (e.g. receipt of notification, phone call from someone)

Trigger:

Describe the critical steps in the procedure and/or a web link to

where a detailed procedure is located e.g. “8 Simple Rules for

Generating an AFE Network Number”

Procedure Description:

Write a short sentence explain why this is needed, what value is

added

Purpose:

Number & Name of Sub-process (if Applicable)Sub-Process:

Name of Process StepProcess Step Name:

Process Step NumberProcess Step #:

Name of ProcessProcess:

3rd Level Process Details Template

MCS

Applying Metrics To Company Goals and

Processes


The Strategic/Performance Link

Goals Design Management

OrganizationLevel

Business

ProcessLevel

Job/PerformerLevel

OrganizationGoals/Measures

OrganizationDesign

OrganizationManagement

ProcessProcessGoals/MeasuresGoals/Measures

Job/PerformerGoals/Measures

ProcessDesign

JobDesign

ProcessManagement

Job/PerformerManagement

Adapted from Pritchett, Rummler & Brache


Reduce Rig Release to On Stream

Cycle time by 10%


Goals/Measures (What)Goals/Measures (What)

OrganizationOrganizationGoals/MeasuresGoals/Measures


Job/PerformerJob/PerformerGoals/MeasuresGoals/Measures

Example: Alignment of Goals and Measures With Business Outcomes

“Reduce rig release to on-stream cycle time by 10% ” I.E. from 159 days to 143 days, a net reduction of 16 days per well

•District Area will reduce rig release to on-stream cycle time by 10% on average per well (from 139.3 to 125.4 days, a net reduction of 14.9 days)

• Identify and eliminate major process delays

•Central Team will reduce rig release to on-stream cycle time by 10% on average per well (from 216.5 to 194.9 days, a net reduction of 21.6 days)



Strategies (How)Strategies (How)

Understand what the Understand what the

cycle time is for each cycle time is for each

phase of the RR to OS phase of the RR to OS

process, identify the process, identify the

root causes of delays root causes of delays

and implement and and implement and

standardize process standardize process

changes to realize changes to realize

cycle time reductions cycle time reductions

““Set milestones to Set milestones to

capitalize on capitalize on

planning planning

efficienciesefficiencies””

Example: Alignment of Goals and Measures With Business Outcomes

Goals/Measures (What)Goals/Measures (What)

OrganizationOrganizationGoals/MeasuresGoals/Measures


Job/PerformerJob/PerformerGoals/MeasuresGoals/Measures

“Reduce rig release to on-stream cycle time by 10% ” I.E. from 159 days to 143 days, a net reduction of 16 days per well

•District Area will reduce rig release to on-stream cycle time by 10% on average per well (from 139.3 to 125.4 days, a net reduction of 14.9 days)


•Central Team will reduce rig release to on-stream cycle time by 10% on average per well (from 216.5 to 194.9 days, a net reduction of 21.6 days)



Rig Release to Onstream Cycle Time By Category

2006-2008 Cumulative Average

38

30

47

21

16

50

29

39

25

19

30

1923

28

4

0

10

20

30

40

50

60

Rig Release to Completion

Start (Admin Hand Offs)

Completion Start to

Completion End (Core

Work)

Completion End to Tie In

Start (Admin Hand Offs)

Tie In Start to Tie In End

(Core Work)

Tie In End to Onstream

(Admin Hand Offs)

Cycle Time Days

2006 2007 2008


Cumulative Average Cycle Time 2006-2007 With

2008 Target

164

155

145142 144

147150

153157

154158 159

60

80

100

120

140

160

180

Jan Feb March April May June July Aug Sep Oct Nov Dec

Cycle Time Days

2006 (Baseline) 2007 (Baseline) 2008 (Target)

143

131


Cumulative Average Cycle Time

2006-2008 Rig Release to Onstream Comparisons

164

155

145142 144

147150

153157

154158 159

129 127

9592 92 94

99 98 96

8580 80

60

80

100

120

140

160

180

Jan Feb March April May June July Aug Sep Oct Nov Dec

Cycle Time Days

2006 (Baseline) 2007 (Baseline) 2008 Actuals 2008 (Target)


Benefits Summary: Bottom Line Impacts

• 49% reduction in rig release to on stream cycle time (79 days).

• One time cash flow impact for 2008 was approximately $43MM, due to a production increase of 741,000 BOE for 2008 (approximately 2030 BOE/day increase).

• Each day the cycle time was reduced, generated over $550,000 in additional cash flow in 2008.


HR Vendor Contracting Process

• Government Human Resource Department

• 200+ contracts per year

• 9 sign offs including 3 departments and contractor

• Average cycle time to complete the process was 22-30 work days (5-6 calendar weeks)

• Standard contract was 19 pages long requiring triplication (57 pages per contract)

• 70% of contracts signed off after work completion

• Auditors indicated that this level of performance was not in compliance and the changes were required.


As Is Process

• 17 major steps

• Task time varied from 2 minutes to 30 minutes per step for a total of 2 hours 38 minutes

• Cycle between steps time varied from 15 minutes to 168 hours for a total of 22 - 30 work days

• Cost of the process in task time $61.25 per contract if there was no rework/revisions

• 19 page contract X 3 copies = 57 pages per contract


Process Step – (Original Process) Cycle Time

Task Time

Cost

1. Program Assistant develops "Application for Services" and "Contract"

15 min 15 min .25 X $25 = $6.25

2. Documents sent to Prog. Mgr. for approval/signing

1 - 24 hrs

2 min .04 X $25 = $1.00

3. Documents sent to Br. Mgr. for approval/signing

3 - 24 hrs

2 min .04 X $25 = $1.00

4. Documents sent to Exec. Dir. for approval/signing

24 hours

2 min .04 X $25 = $1.00

5. Documents sent to Office Mgr for approval/signing/assign ARF

24 hours

5 min .09 X $25 = $2.25

6. Documents sent to Adm. Clerk for processing

24 hours

15 min .25 X $25 = $6.25

7. Documents sent to Labour-Finance for approval/signing

3-7 D (72-168 H)

30 min .5 X $25 = $12.50

8. Documents sent to Adm. Clerk for processing

24 hours

5 min .09 X $25 = $2.25

9. Documents sent to Prg. Assistant, develop cover letter

1 - 24 hours

10 min .17 X $25 = $4.25

10. Prg Mgr reviews/signs cover letter 1 hour 2 min .04 X $25 = $1.00

11. Prg Assistant develops package and mails out documents to contractor

5 days (120 Hr)

5 min .09 X $25 = $2.25

12. Contractor reviews/signs contract, mails to PAO

5 days (120 Hr)

15 min .25 X $25 = $6.25(contractor)

13. Prg Assistant processes documents, forwards to Exec Director for approval/signing

24 hours

10 min .17 X $25 = $425

14. Documents sent to Prg Assistant for processing/copying/filing

24 hours

15 min .25 X $25 = $6.25

15. Original contract sent to Adm Clerk for processing/copying/filing

24 hours

15 min .25 X $25 = $6.25

16. Original contract sent to Labour-Finance for processing

48 hours

5 min .09 X $25 = $2.25

17. Copy of contract sent to contractor by mail 3 days (72 Hr)

5 min .09 X $25 = $2.25

TOTALS (Hours/Minutes) 534.25 -

721.26 hr

158 min $61.25

TOTALS (Days/Hours) (22.26 - 30.06 days)

(2 Hr 38 Min)


To Be Process Designed and Implemented

• 10 major steps

• Task time varied from 2 minutes to 15 minutes per step for a total of 1 hour 16 minutes

• Cycle between steps time varied from 5 minutes to 72 hours for a total of 8 work days

• Cost of the process in task time $29.25

• 1 page contract X 3 = 3 pages per contract


Process Step – (Streamlined Process) Cycle Time

Task Time

Cost

1. Program Assistant develops "Contract" & established ARF #

7 min 7 min .12 X $25 = $6.00

2. Document sent to Program. Mgr. for approval/signing

5 min 2 min 04 X $25 = $1.00

3. Document FAXed to consultant for approval/signing

17 min 15 min .25 X $25 = $6.25 (contractor)

4. Documents FAXed to Program Assistant, processed, sent to Exp. Officer for signing

24 hrs 10 min .17 X $25 = $4.25

5. Director signs contract, forwards to Prg Assistant

24 hrs 2 min .04 X $25 = $1.00

6. Program Assistant processes/copies/files document

15 min 15 min .25 X $25 = $6.25

7. Prg Assistant forwards contract copy to consultant

3 days 5 min 09 X $25 = $2.25

8. Original contract sent to Adm Clerk for processing/copying/filing

24 hours 15 min .25 X $25 = $6.25

9. Original contract sent to Labour-Finance for processing

48 hours 5 min .09 X $25 = $2.25

TOTALS (Hours/Minutes) 192.75

Hrs 76 min $29.25

TOTALS (Days/Hours) 8.16

Days 1Hr 16

Min


Net Improvements

• 2 sign offs from 9 including contractor (78% reduction)

• 52% reduction in task time per contract ($32 savings)

• 69% reduction in cycle time (435 hours)

• 95% reduction in paper (57 sheets to 3)

• As Is process required a cycle time of 450 hours to put contract into effect. The To Be process requires 36 minutes (99.86% improvement)

• Net savings in cost/materials per year: $6,400.00

• Net savings in task time per year: 273 hours (34, 8 hour days)


Vendor Contract CI Process Redesign Initiative

12,250

5,850 6,400

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Original Process Redesigned/Streamlined

Process

Difference (52%

Savings)

Cost of Original and Redesigned Processes

Dollars (Annual)

Performance Improvements: Cost


Performance Improvements: Cycle Time


627.76

192.5

435.26

0

100

200

300

400

500

600

700


Process

Difference (69%

Reduction)

Cycle Time of Orginal and Redesigned Processes

Hours - Per Contract


Performance Improvement: Task Time


158

8276

0

20

40

60

80

100

120

140

160

180


Process

Difference (52%

Reduction)

Task Time of Original and Redesigned Processes

Minutes - Per Contract


Performance Improvement: Materials


57

3

54

0

10

20

30

40

50

60


Process

Difference (95%

Reduction)

Materials (Paper/Copies for Contracts) for Original and Redesigned Processes

Number of Sheets Per Contract


The ritual of passing the leadership role to a new generation in an ancient kingdom8..


• What is the single most important leadership attribute represented by the 5 idols?

– Visionary?

– Decision Maker?

– Implementor?

– Creating Community Collaboration?

– Inspirational Communicator?

• Which one should the new heir pick?


The Dynamic Business Scorecard (DBSC)


The DBSC

• Key Components

– People

– Business Processes

– Technology

– Products/Services/Solutions

– Customer Response

– Business Results

• Defines your strategy, and measures

– Operational Excellence

– Customer Intimacy

– Product Leadership & Innovation


Business Processes• Cycle time (execution

planning to on stream)• Cost (per: meter drilled;

completion; tie-in; on stream etc.)

• Quality (% of results that meet budget, spec/standards, safety, timing etc)

People• Engagement rating• Retention rate• % of personal and

team goals fully achieved

Output • Quantity (wells drilled, completed, tied-in, on stream etc.)

• Quantity of wells drilled out of season

• New production/ uplift

• % increase in base production

CustomerRequirements • “Customer”

satisfaction rating• % of products/services

meeting customer requirements/SLAs

• # of customer acknowledgements

Business Results• Cash flow• $/BOE• Net Revenue • ROI

E&P Company Divisional

Dynamic Business Scorecard

Division

OutcomesInput Process Output Customer

Outcomes

Feedback


Products & Services Business Results

Business Processes

People

Client Response

Operational Excellence:HR-Dynamic Business Score Card

Goal: Zero Defects in Transactions

Goal: Low Cost Provider of Choice

Measures:

•Zero defect in transactional

services

•Degree of process standardization

and consistency (%,# processes

including IT standardized)

•HR Process efficiency, quality

•Selected Saratoga, Shandwich,

IABC Benchmarks

Goal: HR Products and

Services Conform to

Established Standards

and Company

Requirements

Measures:

•Degree of compliance to

legislative and service

level obligations

•Degree of consistency of

design and implementation

support of HR programs,

products and services

Goal: Client Satisfaction

Measures:

•Client Satisfaction and

Value levels (CSI*

measures) of design and

implementation support of

programs, products and

services

•% of clients who perceive

HR as a value added

business partner

Goal: Desirable Place to Work

Goal: Develop HR, Leader

and Individual

Contributor Competencies

Measures:

•Engagement level for HR Employees

•Engagement level for Company

Employees

•% HR Staff at full competency for

job roll

Goal: Key Contributors

To The Business

Goal: HR Meets

Business Targets

Measures:

•Cost savings in HR due to

efficiency gains

•Company cost savings or

efficiency gains resulting

from HR support

•Budget $ v.s Actual $

•Degree to which HR

Contributes to the

company strategy

HR &

Company

Outcomes

Input Process Output Customer

Outcomes

Feedback

* Client Satisfaction Index


Customer Intimacy:Sample DBSC Measures

Products &

Services

Business

Results

Business Processes

People

Customer

Response

•Employee skill sets and

competencies meet job

requirements for service

excellence and

understanding and

meeting unique customer

requirements.

•Wellness Index

•Turnover rate

•Employee Satisfaction

•Conformance to customer

expectations for service

and quality eg: reliability,

service delivery, cost,

quality, cycle time.

•Products and

services meet the

specifications of

customers 100%

of the time

•Highest level of

Customer

Satisfaction in

industry for existing

and customized

products and services

•100% obligations

met

•Customer issues

resolved within

specified time

•Retention rate

•MVA in top

quartile of

industry

•ROE in top

quartile of industry

•Increasing market

share at supply and

market end

•Revenue/margin

from existing

and customized

products and

services

Business

OutcomesInput Process

Output

Customer

Outcomes

Feedback


Product Leadership/Innovation:Sample DBSC Measures

Products &

Services

Business

Results

Business Processes

People

Customer

Response

•Employee skill sets &

competencies meet job

requirements for creativity,

creating new technology,

services, products and cross-

business unit solutions, and

marketing.

•ROI from T&D

•# of new ideas generated

•EE sat, wellness index,

turnover rate

•Cycle time (research-

design- development-

implementation)

• Flexibility/adaptability in

operations to meet new

business environment

requirements

•Speed of communication

•# of new

technologies,

products and

services

developed and

offered

•Highest level

of Customer

Satisfaction in

Industry

•Take up rate on

new technology,

service and

product

offerings

•%/# of new

offerings sold

•Customer

Retention rate

•MVA in top quartile

of industry

•ROE in top quartile of

industry

•Increasing market

share at supply and

market end

•Revenue and profit

from new product and

service offerings

TCPL

OutcomesInput Process

Output

Customer

Outcomes

Feedback


User/Customer Focus-Focus on Customer Satisfaction-Focus on creating engagement with the business on strategic issues

Metrics Include:-Satisfaction and Importance ratings, -Service Quality ratings

Business Contribution-Control of Costs/Expenses-Assessed business impact of IT projects

Metrics include:-ROI, IRR, NPV etc., contributed to the business

Operational Excellence-Focus on efficient and effective internal IT operations

Metrics Include:-Cost, quality, cycle time, project metrics

Future Orientation-Focus on capability development of staff-Focus on researching and aligning applications with future business needs

Metrics Include:-People competency/capability levels (innovation, strategic thinking)

IT Score Card


Tips for Developing Process Metrics

• SMART goals are needed to develop SMART metrics. Goals focus on results, not activities.

• Create a few, easily understood metrics. Numerous complex metrics are not very helpful. One metric can skew the focus of efforts, unintentionally creating negative impacts.

• Ensure you have reliable data to populate the metrics.

• Ratios are very helpful in “normalizing” data and allows “apples to apples” comparisons

• Use graphs or charts to display the data. It is much easier to identify trends or patterns from charts than from pages of numbers


Challenges With Process Metrics

• Goals and metrics in your process may need to change from time to time due to internal events – make sure what you are measuring is still relevant

• Find time to periodically review the results and measures of the process with customers and make adjustments as needed

• More than one process may be impacting the result and measures of your process


We could tell them it’s a crack in the projector lens


Contact Information:

Gordon Masiuk (403) 880-0917

[email protected]

[email protected]

www.business-performance-excellence.ca

Thank You!

June 21 2012 Process Performance Metrics Presentation

Business

Transcript of June 21 2012 Process Performance Metrics Presentation