metrics: the why, the how and the when not
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© Chazey Partners 2016
Metrics: The Why, the How and the When Not?
December 1, 2016| Arlington, Virginia
DELIVERING THE PROMISE …
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This session will explore the key concepts, best practices and lessons learned from our years of public sector experience and other case studies. Attendees will learn how to:
Establish or rebuild your metrics framework Implement metrics that are S.M.A.R.T. (Specific, Measurable,
Achievable, Relevant and Time-bound) Identify what metrics your internal clients care about and how
to engage them Drive relevance and performance from your metrics reporting
Metrics: The Why, the How and the When Not?
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Agenda
Who We Are
Case Studies & Your Experience
Shared Services & Client Engagement
Performance Measurement Concepts
Establishing or Re-Building Frameworks
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Your Facilitators
PHIL SEARLE CEO & Founder
Phil Searle has more than 25 years of experience in Finance, Shared Services,Technology and Outsourcing and is a globally recognized expert in businesstransformation, shared services, offshoring, and outsourcing, covering both theprivate and public sectors.
Prior to his current role, he was Group Vice President and CFO of Cendant TDSInternational, responsible for all aspects of Finance across four continents, includingDecision Support, Financial Planning & Analysis, and Controllership and Financial, aswell as certain HR Shared Services. Prior to Cendant, Phil was VP Finance andCorporate Controller at 3Com Corporation. Here he headed the Corporate ControllerFunction and the Worldwide Shared Finance Services team. His responsibilitiesincluded far reaching organizational, technology, service delivery and business processimprovement initiatives resulting in the global roll-out of ERP solutions and SharedServices for Finance, HR, Supply Chain, Logistics and Customer Support.
He trained and qualified as a Chartered Accountant (ICAEW) in the UK with KPMG. Hehas a BA Honours Degree in Economics from the University of Exeter and is also amember of Financial Executives International (FEI).
Contact:Tel: +1 408 402 3008philsearle@chazeypartners.com
ROBERT TOWLEManaging Director
Robert has over 20 years of experience in finance, shared services and technologyimplementations. He has managed multiple shared services transformation projects andhas held multiple roles managing shared services operations in the U.S., U.K. and inmultiple locations in India. Recently he has lead an assessment of a multi-university systemincluding Finance, Information Technology and Human Resources. He has also led effortswith a multi-functional shared services center and migrated finance functions to a third-party outsourcer. He is currently leading an engagement for the transformation for theEMEA region of a multi-billion financial services firm, including building an AccountingShared Services Center and Center of Expertise for FP&A.
Previously, he was the Vice President of Finance for Pinkerton Consulting. the VicePresident of Global Operations Finance for Travelport Limited, with responsibilities thatincluded the management of company’s Indian Shared Service Center, Global CorporateTravel and North American Payroll Operations and the US Controller for Hewlett Packard.He holds an MBA with Dual Concentrations in Finance and Information Technology fromAuburn University.
Contact: Tel: +1 862 812 7851roberttowle@chazeypartners.com
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SHARED SERVICES BUSINESS TRANSFORMATION ENTERPRISE WIDE SECURITY
End-to-End solution: From assessment to implementation
Optimization & Rebooting
Outsourcing Assessment
Technology Enablement
Global Business Services
Robotic Process Automation (RPA)
Coaching
GLOBAL MANAGEMENT CONSULTING & ADVISORY SERVICES
Organization Design
Staffing Services
Mergers & Acquisitions
Technology Enablement
Business Continuity Planning
Audit Services
Cybersecurity
Operational Security
Business Continuity Planning
Global Consulting & Advisory: Three Pillars
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Our Global Profile
Background: Founded 2006 • Global offices headquartered in California • Over 50 full-time and 70 specialist resources
The Chazey Difference: Continuity of staff • Practitioners first • Knowledge transfer • Engage client in transformation
Chazey Partners: Serving multiple
industries, globally, both private & public
sector
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Who We Worked With
OUR CLIENTS
WHERE WE COME FROM
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Agenda
Who We Are
Case Studies & Your Experience
Shared Services & Client Engagement
Performance Measurement Concepts
Establishing or Re-Building Frameworks
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• US Federal Government
• Corporate demanded explanations & remediation plans if targets not achieved
Aggressive
• SSO groups resented corporate function
• Seen as paper exercise
Pushback• Took “extra care” that
reports showed targets @100%
• Reports less meaningful
Impact
• Impact ≠ intent
• People will seek to avoid pain
• About getting better, not about punishment
Lessons Learned
Evil: Metrics as Punishment
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• University with Health System• Established multifunctional Shared
Service
• Measured only the part they controlled
• Not the end-to-end process
No Client Engagement
• Only looking at the small portion of end-to-end process, metrics were green
• Presented to clients as evidence of success of Shared Services Center
Metrics Green• Service was horrible• Clients had to pay chargeback
based on volume regardless of whether SSC process volume; some clients still handled own transactions
Clients Red
• Need to develop metrics in partnership with clients
• Whole process has more relevance (output metric)
• Also measure inputs and components (operational metrics) to enable root cause analysis
Lessons Learned
Evil: Metrics Green, Clients Red
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• Pharmaceutical company
• Setting up HR hub in Hong Kong for time zone, culture & language support
• Planned for full slate of new technology including case management, applicant tracking and payroll
Technology Enablement
• None of technology was ready at go-live
• Tried to re-implement existing US-centric case management system
• Eventually settled on manual process (macro-enabled spreadsheet)
Manual Process • Five metrics were implemented at
go-live
• Manal processes were integrated into day-to-day procedures (seamless)
• Resulting performance reports were more timely and relevant than those of established hubs with the old case management system
Outcome
• Technology is oversold
• Better to have a small number of the right metrics, than a large number of less relevant metrics
• Macro-enabled spreadsheets & optimized workflow can be transformative
Lessons Learned
Good: Less is More
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• Introduction of input KPIs
• SSO concerned about client reaction
Input KPIs
• Positive reaction
• Clients embracing concept
Client Reaction • Client actively
asking for information
• “How can I make this better?”
Evolution
• Finding efficiencies
• More partner-led initiatives
Growth
Good: Engage Client, Drive Improvement
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Agenda
Who We Are
Case Studies & Your Experience
Shared Services & Client Engagement
Performance Measurement Concepts
Establishing or Re-Building Frameworks
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Shared Services is the Organization that…
Simply a service that is sharedshared
services
Leading practice shared services: Treats the internal client as if they were an external client.Shared
Services
Provides non-core services to the “business”, employing a specialist team, geographically unconstrained, and focusing on the requirements of the internal client. This involves a philosophy and approach totally unlike traditional “corporate-driven” centralization.
Definition
Has the goal of providing high quality, non-core, but mission critical services (which can include both repetitive common processes and more specialized professional services) to the business at lower cost and more efficiently than the business could otherwise provide for itself.
Goal
Achieves cost savings and higher quality of service by leveraging organizational re-alignment, economies of scale, technology, lower cost locations, standardized end-to-end processes and best practice.How-To
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Client Interaction Framework
Account Management
Provider to client; via reporting, communication, & intentional interactions
Client Contact Management
Client to provider; planned operating model for client to submit queries and actions
Service Partnership Agreements
2-way agreements clarifying relationships, including service levels & inputs
Client Feedback
Surveys, case management & other tools to monitor feedback and satisfaction
Continuous Improvement
Follow up on feedback & performance reports to improve processes & systems
Process Control Database
Document & maintain matrix of client & provider responsibilities
Performance Measurement
Input, output & operational metrics with targets, covering multiple parameters
Performance Reporting
Creation & distribution of performance reports & resulting action plans
Recharging Methodology
Funding models & strategies to link client impact on process to chargeback
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Metrics Enable the Client Interaction Framework
Recharging Methodology
Performance Reporting
Performance Measurement
Process Control Database
ClientFeedback
Client Contact Management
Service Partnership Agreement
Account Management
Bring reality check to client conversations
Measure input volumes and exceptions
Documentation of negotiated service levels
Processhandover points
Reported regularly to all stakeholders
Full framework of input, output, and operational metrics
Measureclient satisfaction
Chargebacks typically linked to metrics
Continuous Improvement
Support culture of continuous improvement
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Agenda
Who We Are
Case Studies & Your Experience
Shared Services & Client Engagement
Performance Measurement Concepts
Establishing or Re-Building Frameworks
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Definitions
• Metrics: The list of items being measured with their specific definitions
• Key Performance Indicators (KPIs): A sub-set of metrics that typically focus on input and output measures, often are used to populate dashboards, and provide a good sense of overall performance despite their limited number
• Measures: The actual values/past results recorded against the metrics
• Benchmarks: The measures against which the organization assesses its performance
• Targets: The negotiated and agreed service levels, often set with reference to benchmarks
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Types of Metrics
OutputProcess
InputMetrics
Operational Metrics
OutputMetrics
Measure provider contribution
Efficient, effective, timely processing?
e.g., Cost to screen resume for minimum requirements
Become “individual metrics” if broken down by person
Measure end-to-end process
What does client need overall from this process?
e.g., How long it takes from vacancy to onboarding
A.K.A. “lagging” metrics
Measure client input
Timely, standardized and in the prescribed format?
e.g., Completeness of information in request to hire
A.K.A. “leading” or “reverse” metrics
Input
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Parameters for Metrics
Consistent, accurate and complete to agreed standardQuality
Responsiveness and turnaround timesTimeliness
Meets policy, regulatory and statutory requirementsCompliance
Volume measuresWorkload
Effort and cost per unit of outputEfficiency
Client and employee satisfactionSatisfaction
Parameter Description
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SpecificStandardized
definition
Not subject tointerpretation
MeasureablePossible to measure
and compare against
target
RelevantLink to strategy of organization
Acting on it impacts
performance
Time-BoundKPI only has
meaning if linked to period of time
Metrics need to be S.M.A.R.T.
AccountablePossible to assign accountability for
action plan & results
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Identify Client & Goal
Define Metrics Set TargetDevelop Initiative
Targets are Practical, Relevant & Achievable
Why What When How
Why are you setting a target?
Identify the
client and goal to be achieved
What are you going to measure?
Define a specific
metric & agree with client
When have you achieved success?
Define the targetin reference to
benchmarks
How will you achieve goal?
Develop specific
actions to achieve goal
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1. Start by identifying your client and the goal for performance measurement
2. Overall framework should include all types (input, operational, and output) and parameters(quality, timeliness, compliance, workload, efficiency, satisfaction)
3. Cascade organizational strategy/goals through Performance Measurement Framework
4. Negotiate and agree with the client and departments
5. Include targets for current and future operations and comparisons to external benchmarks
6. Establish a process to refresh metrics as targets are achieved or become less relevant
7. Include key exception indicators to go after exceptions/defects in processes and drive continuous improvement
8. Enable with technology to minimize/eliminate manual data collection/reporting
9. Use to drive continuous improvement and all elements of the Client Interaction Framework
10. Ensure metrics are S.M.A.R.T. (Specific, Measureable, Achievable, Relevant, Time-bound)
Leading Practices in Performance Measurement
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Agenda
Who We Are
Case Studies & Your Experience
Shared Services & Client Engagement
Performance Measurement Concepts
Establishing or Re-Building Frameworks
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Establishing or Re-Building Frameworks
RecommendationsGap AnalysisAssessmentMobilization
• Define the scope of the process being measured
• Identify your client• Mobilize your resources• Clarify your goals/
objectives for performance measurement
• Collect existing metrics, measures & reports
• Interview stakeholders• Develop a technology
landscape and appraisal• Review action plans and
follow up resulting from prior performance reporting
• Compare existing metrics against:• Three types• Six parameters• Targets• S.M.A.R.T.
• Prioritize gaps
• Identify resourcing• Technology requirements• Leverage strengths and
addressing challenges• Change management• Targets and service levels• Implementation
timeframes• What does the future
state look like if we continue as-is?
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Three Sets of Metrics
Initial Metrics
• To be ready at go-live
Deferred Metrics
• To be implemented when a constraint such as technology is addressed
Potential Metrics
• That are lower priority but could be implemented in the future
Typically, organizations completing this review will have three sets of metrics:
It is important to establish a process to refresh the framework on a regular basis. When looking to replace existing metrics, the pool of potential metrics is a great place to start.
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• Create vision and develop clear roadmap• Don’t expect 100% buy-in on framework, but identify champions and sponsors• Negotiated and agreed between providers, clients & stakeholders
Achieve Buy-In
• If you go too fast, you’ll lose prior supporters and sponsors• Build understanding through working with teams• Build skills in analysis, management and continuous improvement
Watch Speed
• Metrics done properly improve client engagement & understanding of client needs• Dig deep to understand issues• Frank, open and honest conversations with the client
Overcome Resistance
• Push/Pull Dynamic (client expectations vs. affordability)• If achieve 100% every period, change target or drop metric• Continually evaluate to ensure meaningful, aligned & relevant
Set targets
Winning Strategies
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1. Metrics enable and support a proactive, structured approach to client relationships
2. Metrics can be used for good or evil – don’t be evil
3. Picking the right metrics is just as important as deciding to use metrics – wrong choices will drive wrong behaviors
Leverage Our Experience for Your Success
Top Three Takeaways
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