Finance & Facilities

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20 Νοε 2013 (πριν από 3 χρόνια και 10 μήνες)

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Finance & Facilities

Metrics & Reporting

Instructors: LuAnn Stokke, Vincent Lau




The Balanced Scorecard (BSC) is an important tool that aligns business activities, improves communications, and measures
organization performance against strategic goals. Attendees can expect to gain a good understanding of BSC principles and
how BSC theory relates to real
-
life application in F2.


This course will provide definitions and help demystify the relationshi
p
among operation, strategy, dashboard, scorecard, strategy maps, initiatives, values, mission, vision, and other terms.


Background and Quality Improvement Infrastructure

What is Balanced Scorecard?

Vision to Operation

Operational Dashboards

Exercise 1

BREAK

Strategy Map, Objectives & Initiatives

Strategic Scorecards

Exercise 2

Targets & Benchmarks

Welcome


What have you heard? What would you like
to know more about?

-

LEAN, QI, PI, PDCA, Deming, Strategy Map, BSC, Dashboard, Scorecards,
Kaizen, Strategic Objectives, Initiatives, etc.


Efficient

Processes

Strategic Plans


Quality Improvement System


Trained Staff


Recognition


Data Analysis

Customer Focus

Empowered Staff

Problem Solving


Teamwork Quality Processes Measurement Systems

Vision

Delighted

Customers


Leaders Staff


Trustworthy Trustworthy


Trusting of Others Trusting of Others

Approachable, Inspiring Collaborative, Committed


What are the goals?

1. Customer Focus

2. Continuous Improvement

3. Quality Definition

4. Work Process Focus

5. Prevention

6. Error
-
Free Attitude

7. Manage by Facts

8. Participation / Empowerment

9. Total Involvement

How is it done?

Who does it?

More than a performance measurement tool:


Helps organizations effectively execute strategy.


Articulates strategy in actionable terms.


Serves as a roadmap for strategy execution.


Mobilizes and aligns leaders and staff to make strategy
a continuous process.


Illustrates cause
-
and
-
effect relationships between
actions and outcomes.

FS

CPO

FM

Treasury
Group

University

Audit

F2 Admin

Top down

Management
tool

Bottom up

Bottom up

Top down

Top down

Custome
r
focused

Different organizations have different journeys. There is no right or wrong way to
implement continuous

improvement
.



BSC


QI


LEAN



Vision

Mission

Strategy

Operation

Ideal State. A lofty dream.


A common goal / future for
the entire organization.

What does the
organization
do
?

What type of business?

Often
interchangeably used
as
Vision

Major
Goals
& Performance
Objectives to achieve the
Mission & Vision


Specific actions to
achieve
work
-
level targets aligned
with strategic goals.

Description

One day
in the
future


Not yet clearly
attainable
?

5


10
years

3


5 years

Present


1 year


Timeframe

An ideal
world


40,000 ft

point of view


20,000 ft

point of view


Strategic
Scorecard

Ground level

point of view


Operational
Dashboard

Also Known As

UW President

Board of Regents

Executives

Government

SVP / AVPs

Controller

Executives

Leaders

Leaders

Managers

Supervisors

Staff

Managers

Supervisors

Staff

Owners

(
F2
perspective)


Conceptual
















Factual

Is it real?



Vision

Mission

Strategy

Operation

“I
have a dream that all men will be judged
by the merit of their character,

not
by the
color of their skin
.”

Eliminate racial injustice in American
society





Establish national
-
public attention to racial
injustice



Educate people
about racial injustice



Governments establish civil rights for all citizens


Speak
at public
events


March
alongside civil
-
rights
activists


Engage politicians at events


Object to and stand
-
up against racial injustice

Rev. Dr. Martin Luther King





Dr. King’s vision/mission of equality
is achievable with successful
Strategy & Operations.


We all play a role/influence the
success of an organization.




Successful Strategy is how to achieve
Vision & Mission.




Successful Operation helps achieve
Strategy (Strategic Objectives).



Values

Utilize a passive/non
-
violent approach

Why we
exist

What’s
important to
us

What we want to
be

Our game plan

Translate, Focus and Align

What are the priorities?

What we must improve?

What do I need to do?

Vision / Mission /
Values

Strategy

Operations / Tactics

VISION / MISSION

Set Direction

STRATEGY

Systems; Cross
-
functional

OPERATION

Execution/Feedback

Work
Teams /
Measure

Analysts

Leaders
Directors
Supervisors
Coordinators

STEAM

Executives

We all Play a Role

FS

CPO

FM

Treasury
Group

University
Audit

F2

Admin

Maintain

grounds


Clean
buildings


Service
vehicles

Project
-

manage new
construction


Manage or
monitor
design/con
-
struction

vendors

Pay staff on
time


Manage
research
budgets


Deliver mail

Steward

Endowment


Lease
buildings and
space


Mitigate risk

Monitor
regulatory
compliance


Conduct
audits



Deliver

F2
-
wide training


Oversee
LEAN
implementa
-
tion

INPUT

Value

Added Tasks

OUTPUT


Financial



20% of measures



Customer

(esp. important for Non
-
Profit
)


20% of measures




Internal
Process


40% of measures





Learning &
Growth


20% of measures



A fully functioning Dashboard may consist of 20
-
25 measures, with a
larger portion in Internal Process

According to Kaplan & Norton, long
-
term success is
best gauged via a
BALANCED

perspective.


For example, financial statements will not display intangible assets:

cycle
-
time, knowledge management,
staff capability, customer
satisfaction, etc
.


CUSTOMER



PROCESS/THEME MEASURE (Strategy Map Objective) ACTUAL TARGET


GAP

FINANCIAL







PROCESS/THEME MEASURE (Strategy Map Objective) ACTUAL TARGET


GAP

Instill

Customer
Confidence


1
Percent of Financial Aid Disbursed Within
1
st

Week of Academic Quarter (C1,

annual)


84%


85%

-
1%

Control Costs


14 Utilities Cost Avoidance, Seattle Campus
(R1, annual)

$9.89M

$
8.78M

No gap

Manage Business
Growth



2 Number of Business Days to Set up New
Budgets (C1,

monthly)

21

days

12

days

-
9

days

Control Costs


15 Cost of (Leased) Space per Sq. Ft. (R2,
quarterly)

$32.44

$33.15

No gap

Manage Business

Growth


3 Transportation

Modes to and from
Campus
-

Environmentally

friendly
transportation
(C2, annual). Reduce

drive
alone.

22%

2008

20%?

-
2%

Control

Costs


16
U.S. Postal Service Postage Cost

Avoidance (R1, quarterly)


9.8%

8.5%

No gap

Synthesize

Information
and Inform Campus


4 Customer perception: “FS employees
effectively communicate with me,“ 2009
Customer Survey (C3, biennial)

70%


72%

-
2%

Control Costs


17

Cost
-
per
-
Paycheck (R1,

annual
)

$1.00


$2.25


No gap

Monitor

Client
Satisfaction


5 CPO Client Advisory Committee
Quarterly
Survey Results (C1, quarterly)

HOLD FOR CUST. SURVEY

3.31

Jul2009

3.5

-
0.19

Control Costs


18

eCommerce Utilization Rate (R3,
monthly)

79%

100%

-
21%

Monitor Client
Satisfaction


6 Student Overall Satisfaction with SFS
Services (C3, annual)

80%

64%

No gap

Control Costs


19

Custodial Services
--
Cost Comparison
per GSF (R2, annual)


$1.29

$1.41

No gap

INTERNAL BUSINESS
PROCESS


PROCESS/THEME MEASURE (Strategy Map Objective) ACTUAL TARGET


GAP

Manage Operational &
Business

Risk



20 DRAFT: Risk Management

Cost of Risk
(R3, quarterly)


$ 0.0054


$ 0.0054

No gap

Operational Excellence



7 Annual Productivity: Finance & Facilities
vs. Depart
ment of Labor benc
hmark

0.8%

3.0%


-
2.2%

Manage Investment
Portfolios


21 Consolidated Endowment Fund and

Invested Fund Performance Returns, CEF; IF
(R3
, quarterly)

4.1%

0.0%

3.1%

-
0.2%

No gap

Purchase Goods and
Services



8

Number of Invoice Discrepancies Over 30
Days Old (O1, monthly)

122

50

-
72

Manage Cost of

Capital


22.

Cost of debt: ILP; Non
-
ILP (R3,
quarterly)

4.3%

5.1%

5.0%

5.5%

No gap

Purchase
Goods and
Services


9

Percent of Online Invoices Paid Within 45
Days of Invoice Date (O1, monthly)

76%

85%

-
9%

STAFF LEARNING & GROWTH





PROCESS/THEME MEASURE (Strategy Map Objective) ACTUAL TARGE
T

GAP

Manage Workspace
and Infrastructure
Projects


10 Closed Projects Cost versus Budget (O1,
annual)


-
8.4%


-
6.0%


+/
-
10%

No gap

Develop Staff


23

Percentage of staff highly satisfied with
Collaboration (4, 5); 2009 Employee Survey,
(S1, annual)

68%

70%

-
2%

Operate
and Maintain
Buildings;

Campus


1
1a

Carbon Footprint Reduction, in

MgCO2e, Scope 1 and 2 Emissions

(O4,
quarterly)

2.4%

2.0%

No gap

Lead People


24


Percentage of staff highly satisfied with
Internal Communication (4, 5); 2009
Employee Survey (S1, annual)

62%

63%

-
1%

Operate
and Maintain
Buildings;

Campus


1
1b

Carbon Footprint Reduction, in

MgCO2e, Scope 3 Emissions

(O4, quarterly)


11.9%


2.0%


No gap

Lead

People


25

Percentage of staff highly satisfied with
Leadership (4, 5); 2009 Employee Survey
(S2, annual)

63%

70%

-
7%

Operate and Maintain
Buildings;

Campus




12

Water and Energy Conservation, Seattle
Campus (O4, quarterly)

1123gpd

510
btu


1188gpd

538.5btu

No gap


Develop

Staff


26

Percentage of staff highly satisfied with
Development to Full Potential (4, 5); 2009
Employee Survey (S3, annual)

75%

69%

No gap

Advise & Consult


13 Percent of MWBE and SBA firms in
eProcurement
/Diverse Supplier Portal (O3,
quarterly)

35%

25%

No gap


Lead People


27

Percent of staff highly satisfied (4, 5);
2009 Employee Survey "overall satisfaction"
question (S3, annual)

71%

69%

No gap

Financial


Annual % growth in revenue


Average margin per order




Customer


Average wait time (in minutes)
for customer to receive order


# of inaccurate orders per 1,000





Internal Process


# Days to develop new product


% of food wasted



Learning
&
Growth


% of Staff cross
-
trained


% of servers > 5 years with
company



Setting:


It is the year 2000, and you are the Blockbuster senior management
team.


You are the industry leader in renting movies.


Your competitors include Hollywood Video, local video stores, and
grocery stores.


Assignment
:


Create the Blockbuster operational dashboard.


Using the four perspectives, what measures would you like to see that would
show you know how well Blockbuster is doing?


Report out & debrief to class.


Dashboard attributes:

Measures key processes

Operational in nature

Displays day
-
to
-
day activities

Reinforces doing our job well

Analyzes performance

Provides baseline for improvement efforts


Financial





Customer


Internal Process

Learning &

Growth



Star Wars episodes 5 & 6 were
titled “Empire Strikes Back” and
“Return of the Jedi”


What was the title given to the
original 1977 movie Star Wars?


A.
“A New Hope”

B.
“Genesis”

C.
“Anakin’s Vengeance”




“A New Hope” was sub
-
titled to
help distinguish from its prequel
and sequel.


But to this day, most remember
the iconic movie as “Star Wars”


A.
“A New Hope”

B.
“Genesis”

C.
“Anakin’s Vengeance”




Which is the most expensive movie to date?


A.
Avatar

B.
Pirates of the Caribbean: At World's End

C.
Titanic

Which is the most expensive movie to date?


A.
Avatar $237M

B.
Pirates of the Caribbean: At World's End $300M

C.
Titanic $200M

Guess this animated science fiction movie:






Year is 2105






Earth is covered in trash






Humans live on luxury
Starliners






Trash compactor robot cleans Earth






Robot & movie titled “WALL• E”




Why we
exist

What’s
important to
us

What we want to
be

Our game plan

Translate, Focus and Align

What are the priorities

What we must improve?

What I need to do?

Vision / Mission /
Values

Strategy

Operation / Tactics

Develop
Strategy

Test and
Adapt the
Strategy

Monitor and
Learn

Plan
Operations

Translate
the Strategy

Strategy Map


Balanced
Scorecard

Dashboards

Now that you have a Strategy Map and
Strategic Objectives, how would you know
you are making progress in achieving it?


A Scorecard tells the story of the strategy.


Reviewing the Scorecard is a way to assess
progress towards the Strategic Objectives on
the Map.



BSC scorecard vs. "metrics": BSC not a collection of measures, it's a description
of the organization's strategy.




Operational

Dashboard

Strategy

Scorecard

Purpose

Demonstrates an organization’s
performance in delivering
their core
-
processes today.

An organization’s
roadmap of the
future
, and how every entity within the
organization impacts success.

Themes

Day
-
to
-
day
activities

Doing our job well

Management

Tasks

“Winning
the
fight”

Concrete

5
-
year
plan

Moving the organization forward

Leadership

Projects

“Winning
the
war”

Perception

Examples of
Measurements


# of days to
process transactions


# of transactions


# of outstanding items


$ savings / costs


“lag measure” (after the fact)


Best indicator/proxy


Can be
concrete;

e.g. “utility costs
avoided”


Milestones achieved


Index of several measures that
connect to tell the story

Operational

Dashboard

Strategy

Scorecard

Suggestions
when starting to
measure

Consider measurements that best
refelct

your
core process.

Consider

one
Lead
and
one
Lag measure.

Lag
measures may not be available in the
beginning;

rather,
just
lead indicators.

Review

Month
ly or quarterly

Semi
-
annual

/ Annual

When is it

Strategy
vs.
Operations?


Once
a
strategy
is achieved
and the
process is stable, it
can move
to
operations.


An operational
measure may
become strategically important and reviewed at a
strategic
level
(e.g.,
Budget responsibility at
UW, utility costs avoided, etc.)

Lead vs. Lag
measures

Lag

=
Whether you met your
desired results

Lead

=

A predictive driving metric
that leads to achieving results, or
early indicator/warning sign


Could be lead or lag

The

ultimate strategic measure (“were desired
results achieved?”) is often a lag indicator.
Since strategy is usually cast at a 3
-
5 year
horizon, lead measures are reviewed in the
interim.

Draft and


launch
initiatives

when target can’t be reached through current core processes or incremental process
improvement. Initiatives, once achieved, introduce new capability or innovation that changes the operation or context of
the strategy.


An initiative may impact several Strategic Objectives/Measures


Not all Strategic Objectives have an initiative


Initiatives are akin to projects and are not operational (e.g.,

project m
ilestones, completion

dates

not routine
services or performance levels)


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As the senior management team, craft a Strategy Map for your firm. Where is
your company heading in the next 5 years, given what you know?


Draft at least one scorecard measure for each perspective to help you
understand whether you’re achieving your strategic objectives.

It is the Year 2010, present time


Your table is the senior management team of one of these assigned companies: Blockbuster,
Netflix or
Redbox
. You all provide entertainment products to consumers,

but using different
business models.


In the last 10 years, there have been significant changes within the industry


Internet technologies


Changing c
ustomer

demographics


New business lines (e.g., game rentals, agreements with studios for exclusive movie
release
dates)


Hollywood Video bankrupt (formerly major Blockbuster rival)


STRATEGY MAP TEMPLATE

FINANCIAL


Double profits within 5 years.


MISSION


Deliver quality entertainment



VISION


Bringing quality of life anywhere, anytime

CUSTOMER

INTERNAL PROCESS

LEARNING & GROWTH

Target Types

Description

Usage

Example

CUSTOMER

Target based on Customer
expectations of your process.
Target set via customer input
(survey, feedback, focus
-
groups).


Demonstrating client
satisfaction or customer
expectations.



Number of days UW
officially closed on regular
school days (Target=0)


One day response time for
customer
-
inquiry


BENCHMARK

Target based on peer

performance. How does
your process rank relative to
the industry? How does it
rank relative to the industry’s
best practices?


Demonstrating cost
-
effectiveness / value


Demonstrating rank among
peers



Our performance
compared to industry
average


Gap between our
performance and industry
best
-
practices


STRETCH

Target based on projections
from improving the process,

rather than from incremental
change over time.



Process Improvements


Target setting when other
methods are not
appropriate/available



Reduce process turnover
time to 3 days within 1
year


Rate of return up 10%
from previous year


COMPLIANCE /

LAW

Target based on compliance
or law requirements. These
targets are prescribed, and
are non
-
negotiable “red
-
rules.”



Complying with regulations


Common in industries
dealing with regulatory
issues (e.g. Grants/
Contracts, Construction,

Payroll, Safety, etc.)



Meet

e
mission standards
for automobiles


Eliminate

v
iolation of civil
rights in the workplace


Target Setting


“Benchmarking is the process of
comparing one’s business processes
and performance metrics to industry
bests and/or best practices from
other industries. Dimensions typically
measured are
quality
,
time
, and
cost
.
Improvements from learning mean
doing things better, faster, and
cheaper.”

en.wikipedia.org/wiki/Benchmarking

Remote Research/Analysis

LEAN, CPI, BSC

“STEP 3”

BSC

either dashboard or scorecard

“STEP 1”

“STEP 2”

Develop
Strategy

Test and
Adapt the
Strategy

Monitor and
Learn

Plan
Operations

Translate
the Strategy

Strategy Map


Balanced
Scorecard

Dashboards

The Balanced Scorecard (BSC) aligns business activities, improves
communications, and measures organization performance against
strategic goals.


What would you like to know more about?


How to get involved? (classes, teams, dashboards & scorecards, etc.)

FS

CPO

FM

Treasury
Group

University

Audit

Finance

&
Facilities

Strategy

Scorecard

Yes

Yes

Yes

(hybrid)

In process

Operation

Dashboard

In process

Yes

Yes

Yes

Yes

Contact

Linda Tennant

Kelly Casey

Jeanne
Semura

Susan Freccia

Patricia Durbin

LuAnn or
Vincent

How does operational dashboard link to
scorecard and strategy map