A Performance Measurement Methodology.Performance measurement is a tool within a larger management process that links strategies to actions and investments. Performance indicators communicate the level of and progress in performance that results from actions or investments. They serve to inform decisions at both the tactical and the strategic levels. A methodology for performance measurement, therefore, must lie within an organization's overall methodologies for organizational and investment management. In this larger schema, there are resource owners, resource users, strategically valuable focus areas (e.g., customers and employees), and business and cultural processes that run the organization. Performance indicators can affect each of these key factors and players, but only through the decisions that are made using them. As a result, the managers of resources (CFO See Chief Financial Officer. or CIO CIO: see American Federation of Labor and Congress of Industrial Organizations. (Chief Information Officer) The executive officer in charge of information processing in an organization. offices) must have a well-defined well-de·fined adj. 1. Having definite and distinct lines or features: a well-defined silhouette. 2. performance measurement process that intimately links to their overarching o·ver·arch·ing adj. 1. Forming an arch overhead or above: overarching branches. 2. Extending over or throughout: "I am not sure whether the missing ingredient . . . management processes, which, in turn, serve to translate strategic plans into operational budget decisions. [1] Performance measures are too often included as one step in the overall investment management process. This article illustrates the driving and essential role that performance measures play in investment management models. They are drivers, in that they integrate each step of the overall investment management approach into an end-to-end end-to-end a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. process. They provide essential validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. of causal causal /cau·sal/ (kaw´z'l) pertaining to, involving, or indicating a cause. causal relating to or emanating from cause. relationships between investments, actions, and outcomes. This validation is essential for CFO Act or Clinger-Cohen Act compliance. [2] The following methodology will outline an overall resource management process. As alluded to above, it will also outline the process and activities involved with performance measurement. And, most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , it will overlay (1) A preprinted, precut form placed over a screen, key or tablet for identification purposes. See keyboard template. (2) A program segment called into memory when required. the two, illustrating the many places where performance measurement supports the overarching investment management processes. Section 1. Overarching Investment Management Process The following steps outline an iterative it·er·a·tive adj. 1. Characterized by or involving repetition, recurrence, reiteration, or repetitiousness. 2. Grammar Frequentative. Noun 1. and repeatable planning, selection, control, and evaluation process that is recommended for any organization to undertake for effective investment and general process management. The overarching process gives a framework within which the performance measurement process exists. Section II addresses specific tasks associated with performance measurement, and Section III diagrams how the performance measurement activities relate to the overarching investment management process. There are nine overarching process steps that include the management activities: select, conrol, and evaluate (consistent with Vector Research methodology). 1. Understand the Environment This is a critical step and applies to enterprise planning as well as division or strategic business unit planning. The following must be well-defined and used as sources of key assumptions throughout the process: * Organizational missions and vision * Operational architecture of critical processes * Key players: resource owners, resource users, responsibilities, decision makers * Places for value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: organizational modifications: steering committees steer·ing committee n. A committee that sets agendas and schedules of business, as for a legislative body or other assemblage. steering committee Noun , etc., aimed at eliminating process bottlenecks or effort duplication duplication /du·pli·ca·tion/ (doo-pli-ka´shun) 1. the act or process of doubling, or the state of being doubled. 2. * Decisions that need to be made (and information needed to make them) 2. Develop Framework The goal of this step is to develop a value-based framework within which to make strategic and investment decisions. Three key tasks should be completed, the third task being optional: * Establish key pillars of value to the organization." * Identify strategic objectives: establish guidance sources or mechanisms to be used to formulate formulate /for·mu·late/ (for´mu-lat) 1. to state in the form of a formula. 2. to prepare in accordance with a prescribed or specified method. strategies, and earmark earmark taking a piece out of the edge or center of the ear with a punch as an identification mark. The shape of the mark may be registerable under local legislation. key strategies that will evolve into actionable Giving sufficient legal grounds for a lawsuit; giving rise to a Cause of Action. An act, event, or occurrence is said to be actionable when there are legal grounds for basing a lawsuit on it. goals. * Research and benchmark industry best practices regarding strategy formulation formulation /for·mu·la·tion/ (for?mu-la´shun) the act or product of formulating. American Law Institute Formulation and revenue-enhancing developments. 3. Baseline The horizontal line to which the bottoms of lowercase characters (without descenders) are aligned. See typeface. baseline - released version Investments Three sets of questions can be assessed here. The detail with which the questions should be answered depends critically on the level of the organization in the enterprise and whether the baseline supports high-level enterprise decisions or project-level management decisions. All answers will serve to establish the scope of the management problem. * Answer: What are we currently investing in? Create a business model in which asset and investment values can be aggregated for an overview of the investment portfolio. This is a simple breakdown of the "buckets" of investments, like back-office information technology, software expenses, communications, train leases, employee recruitment, training, etc. * Answer: What are the total life-cycle life-cycle - software life-cycle cost estimates for these investments? This will help to identify what types of information that may eventually be critical for investment management and capital asset planning are missing from the asset management system. * Answer: Which investments are not in our direct scope but are significantly affected by our investment choices? This assists with organizational buy-in Buy-In When an investor is forced to repurchase shares because the seller did not deliver the securities in a timely fashion, or did not deliver them at all. Notes: Those who fail to deliver the securities will be notified with a buy-in notice. for investment decisions made in your particular business unit. 4. Gap Assessment Gap assessment involves not only a look at inside processes but also a look outward at the competition or other best practices for the core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
* What do we want to look like? (Key vision or strategy documents are very useful for defining this.) * What are we not doing, in terms of outputs and outcomes? * What are the key gaps? (involves a prioritization) * How would we know if the gaps were closed? That is, what are some measurable desired outcomes that we can relate directly to the gaps? 5. Solution Design Solution design is where the fun starts. All organizations design solutions already, but now there are a process and some key reference points to use for optimal design. * Refine the desired outcomes gathered above to define measurable tactical objectives. * Define performance measures that are commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with these objectives. * Investigate and design solution alternatives to close the gaps--it is useful to design distinct solutions for each investment area as defined in step 3. This allows multiple solutions with similar content and result orientation to compete for resources: -- Start with business process reengineering See reengineering. (BPR (Business Process Reengineering) See reengineering. BPR - Business Process Re-engineering ) efforts. -- Next, consider investment initiatives, including outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. solutions. -- Finally, design an array of solutions, from bare-bones bare bones pl.n. Informal The basic elements or essentials: outlined the bare bones of the proposal. bare to gold-plated gold-plated Adjective covered with a very thin coating of gold gold-plated adj → chapado en oro gold-plated gold adj → [4], that are increasing in both capability and cost. 6. Project Benefits [5] After the solutions have been designed for each investment area, relative benefits must be ascribed to solutions in each array. Performance measurement is especially useful here; however, it is critical that the measures selected truly communicate as much of the total value of the solution as possible. Benefit projection can be done without performance measures--humans have a pretty good sense of when one thing is better than another--but human perception cannot accurately assess by exactly "how much." The following lists are useful for selecting metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. that may appropriately communicate benefit or value. * Performance -- Ability to deliver to internal and ternal customers -- Access to services or products -- Access to information about products or delivery status -- Accuracy of data and systems environment -- Compatibility of systems and processes -- Effectiveness and impact of information delivered -- Options and flexibility for capturing future opportunities -- Security in technology and work practices -- Risk mitigation MITIGATION. To make less rigorous or penal. 2. Crimes are frequently committed under circumstances which are not justifiable nor excusable, yet they show that the offender has been greatly tempted; as, for example, when a starving man steals bread to satisfy or reductions * Cost savings and avoidances -- Asset duplication -- Response rates -- Data and information systems reliability -- Scaling up operations for increased demand -- Incidence of manual operations -- Time required for daily operations * Risk factors [6] -- Technology Risk: when product does not meet intended specifications and performance. -- Implementation Risk: amount of time required far exceeded the time planned for implementation. This could be affected by political risks in the public sector, e.g., unexpected grant funding changes. -- Strategic Risk: miscalculations in demand or competition. This should be captured in the "what if" modeling. -- Organizational/Project Management Risk: the ability of the organizations to communicate to overcome basic management risks. -- Change Management Risk: how easily the pilots and prototypes will be embraced and implemented for use at the organizational level. -- Human Element Risk: risks from lack of expertise in technical areas that are fundamental to operations. -- Economic Risk: failure to account for financial implications of other risks. It is useful to categorize cat·e·go·rize tr.v. cat·e·go·rized, cat·e·go·riz·ing, cat·e·go·riz·es To put into a category or categories; classify. cat benefit types. This may flow naturally from the pillars of value that were defined in step 2, but generally fall into mission impact, capability enhancement, systems efficiency, or cost-savings categories. [7] 7. Selection Selection is usually done annually and aims to establish investment preferences by examining all nonessential non·es·sen·tial adj. Being a substance required for normal functioning but not needed in the diet because the body can synthesize it. spending. Once they are examined, they are competed against initiatives to develop a strategy of funding priorities based on their relationships to outputs and outcomes. It is rare that an unfunded requirement's solution gets totally funded, so this process helps leadership maximize value by targeting limited discretionary funds to each investment area of high priority. Selection involves four facilitated steps, achievable in a matter of days. * Decide critical selection criteria. Define ahead of rime, in relation to the gaps previously articulated ar·tic·u·la·ted adj. Characterized by or having articulations; jointed. and the implementation realities that exist, any key criteria that must be met. -- Time deadlines -- Financial constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. -- System interoperability The capability of two or more hardware devices or two or more software routines to work harmoniously together. For example, in an Ethernet network, display adapters, hubs, switches and routers from different vendors must conform to the Ethernet standard and interoperate with each other. and interdependency in·ter·de·pen·dent adj. Mutually dependent: "Today, the mission of one institution can be accomplished only by recognizing that it lives in an interdependent world with conflicts and overlapping interests" necessities * Scale benefits. Design a process that will scale all benefit/risk information derived in step 6 to be on a comparable scale. * Conduct benefit/cost analysis. This can be done by ordering all solutions by their benefit-to-cost ratios and making a cut or by using more sophisticated decision analysis tools. * Coordinate a best-value package of investments. The process thus far offers accountability in investment planning, aimed at CFO Act and Clinger-Cohen Act compliance. The process arms the CIO and CFO with a selection process that strategically links the organizational vision to measurable, tactical outcomes. It allows leaders to make informed tradeoffs between investment options. Table 1 shows the seven selection steps of the investment decision process and the products of each step. 8. Control Control, as the word implies, should be done on an ongoing basis. A process must be set up that sets "tripwires Tripwires (previously The Enigma Project) are a four piece indie/rock alternative band from Reading, Berkshire, UK.[1] The band consists of Rhys Edwards, Ben White, Joe Stone and Sam Pilsbury, Joe Stone being the most recent addition, after the Welsh indie group " if the performance, cost, or schedule of a program falls outside of what is acceptable, to alert management to problems. This serves as a risk management tool but is also a good source of performance information. * Define how data and performance indicators reflect business activities. * Define decision mechanisms/processes and bodies to take action or make recommendations for improving or remedying performance deficiencies. * Link this mechanism and process to other organizational timetables and decision processes. * Create reporting-out mechanism for informing, making, and actioning on control decisions that have cause-and-effect relationships: e.g., bill document relay performance was too slow, so resource owner made discretionary-approved (small) investment to improve system effectiveness. 9. Evaluate Evaluation is conducted on a periodic basis. Quarterly or biannual bi·an·nu·al adj. 1. Happening twice each year; semiannual. 2. Occurring every two years; biennial. bi·an performance evaluations Performance evaluation The assessment of a manager's results, which involves, first, determining whether the money manager added value by outperforming the established benchmark (performance measurement) and, second, determining how the money manager achieved the calculated return are a common practice. This step is important for elevating the issues at the project management level to one of enterprise assessment, and it is essential for the lead-in The first part of a CD-R recording session, which starts 25 mm from the dead center of the disc and takes up 4,500 sectors. The table of contents is written into the lead-in when the session is closed. Its purpose is to allow the drive to synchronize and to hold the table of contents. to the following year's selection exercises. * Conduct evaluations/audits. Evaluate established performance indicators at a predetermined pre·de·ter·mine v. pre·de·ter·mined, pre·de·ter·min·ing, pre·de·ter·mines v.tr. 1. To determine, decide, or establish in advance: time frequency (annually, quarterly, etc.). Assess the control activities: frequency costs of change, possible improvements for flagged problem areas. * Report out: enterprise and system performance, control activities, problem flags, recommendations for areas needed for change. * Coordinate results with selection process. Section II. Performance Measurement Processes and Activities The following steps describe five key activities that support development of a performance measurement and decision paradigm. Their use is illustrated best as they relate to the overall investment management process. (See Section III.) 1. Performance and Planning Assessment * Obtain: -- Copy of entity's goals, objectives, vision statement, and mission. -- Operating manuals and other written procedures. -- Current internal reports used for performance measurement. -- Copies of internal and external performance reports covering operations, oversight
Oversight may refer to:
* Identify key processes to be addressed. * Perform process design workshops to verify (1) To prove the correctness of data. (2) In data entry operations, to compare the keystrokes of a second operator with the data entered by the first operator to ensure that the data were typed in accurately. See validate. or complete missing elements needed to develop performance measures. * Assess: -- Inherent risks in organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. . -- Management control procedures, philosophy, or operating style. -- Management commitment to legislative or regulatory compliance. 2. Determine Management Objectives and Performance Criteria * Identify key and critical activities that drive the total process and impact: process efficiency, mission effectiveness, product quality, timeliness, productivity, cost efficiency, and risk. 3. Develop Preliminary Measures * Sketch sketch, a rapidly executed kind of pictorial note-taking. The sketch is not usually intended as an autonomous work of art, although many have been considered masterpieces in their own right. performance measures from gap assessment (what you know). * Identify data needed to generate performance measures. * Validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data data reliability. * Locate and determine instrument to collect data. * Determine frequency of data collection. 4. Test Measures * Develop data collection instruments, to include surveys, spreadsheets The following is a list of spreadsheets. Freeware/open source software Online spreadsheets
* Populate To plug in chips or components into a printed circuit board. A fully populated board is one that contains all the devices it can hold. with baseline data. * Review processes and data results. * Show how performance improvements increase with each solution. * Modify data and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. collection procedures. 5. Refine Measures * Iteratively assess data and data collection methods to determine if: -- Data is too costly to collect. -- Performance measures did not communicate the critical information for decision-making decision-making, n the process of coming to a conclusion or making a judgment. decision-making, evidence-based, n a type of informal decision-making that combines clinical expertise, patient concerns, and evidence gathered from . - Additional performance measures are needed. * Link these improvements with critical gaps. * Link improvements to pillar pillar, freestanding columnar supporting member. It is a general term, little used as an exact architectural definition except as applied to an upright support in the medieval styles, consisting of an assemblage of juxtaposed shafts and moldings; unlike the column, of value or performance category. * Use to support benefit valuation. Section III. Overlay of Processes Table 2 displays the overlay of the overall and performance measurement processes. The shaded gradations are placed solely to assist the eye in delineating activities from subactivities. The purpose of this diagram diagram /di·a·gram/ (di´ah-gram) a graphic representation, in simplest form, of an object or concept, made up of lines and lacking pictorial elements. is to help set expectations of time commitments that are needed from teams and to clarify the activities, results, and information that are necessary for progression to the next step. Note that the assessment and selection activities (steps 1-7) can take place in roughly thirteen weeks, assuming management and staff commit a significant amount of time for participation and quality results. The control and evaluate stages are ongoing. The lambda and psi PSI - Portable Scheme Interpreter symbols indicate that activities are required of the respective team. Section IV. Conclusion Five keys to success are essential for a progressive, robust management model: * Know what decisions you are trying to make. * Include the right people to help arrive at answers to these decisions. * Invest in knowing what you have and defining where you need to be. * Assess gaps in tractable tractable easy to manage; tolerable. manner-capture rationale rationale (rash´  nal´),n the fundamental reasons used as the basis for a decision or action. as you move forward. * Be confident that the next iteration One repetition of a sequence of instructions or events. For example, in a program loop, one iteration is once through the instructions in the loop. See iterative development. (programming) iteration - Repetition of a sequence of instructions. will be better, more knowledgeable. Definitions 1. Performance measure: quantitative or qualitative comparison, estimates, or judgment of the levels or rates of change of the extent or dimensions of investments, processes, deliverables, or products. 2. Performance metric: the ratio of two measures. While a seemingly seem·ing adj. Apparent; ostensible. n. Outward appearance; semblance. seem  ing·ly adv. simple definition, note that the ratio serves to lend a context of one
measure to another, e.g., documents transferred per day or riders per
seat.
3. Performance indicators: measures, metrics, or other observations that infer the results status for investments, processes, deliverables, or products. Dr. Lisa Oakley Oak·ley , Annie 1860-1926. American sharpshooter. She was the star attraction of Buffalo Bill's Wild West Show. Noun 1. Oakley - United States sharpshooter who was featured in Buffalo Bill's Wild West Show (1860-1926) is employed by Femme femme adj. Slang Exhibiting stereotypical or exaggerated feminine traits. Used especially of lesbians and gay men. n. 1. Slang One who is femme. 2. Informal A woman or girl. Camp Incorporated (FCI (Flux Changes per Inch) The measurement of polarity reversals on a magnetic surface. In MFM, each flux change is equal to one bit. In RLL, a flux change generates more than one bit. ), Sterling, Virginia Sterling, Virginia is an unincorporated Washington, D.C. suburb, northwest of Herndon, east of Ashburn, and west of Reston, close to Dulles International Airport in Loudoun County. . Previously she was a Principal Economic and Investment Analyst for Soza & Co. and held staff positions at MITRE Corporation (body) MITRE Corporation - A US federally funded R&D center, spun off in 1958 from the MIT Lincoln Laboratory (also an FFRDC). MITRE is a non-profit corporation chartered to do R&D in the public interest. and the Deportment de·port·ment n. A manner of personal conduct; behavior. See Synonyms at behavior. deportment Noun the way in which a person moves and stands: of Defense. She holds a Ph.D. in economics, with specialties in information technology economics, public finance, institutional economics, and labor economics. Endnotes (1.) The foundation of the methodology used in this research is based on a few simple models:" Performance-Based Management: Eight Steps To Develop and Use Information Technology Performance Measures Effectively," (version 12/99): http:// www. itpolicy.qsa.gov/mkm/ pathways/ menu.htm; GSA (1) (Global mobile Suppliers Association, Sawbridgeworth, U.K., www.gsacom.com) A membership organization of suppliers of GSM products and services. Its goal is to promote GSM as the worldwide mobile communications standard. See GSM Association and GSM. ,"IT Capital Planning and Investment Guide," October October: see month. 1997:htrp://www.itpolicy. gsa.gov/eagency/virruallibrary/itips/gsa_capln.pdf, Vector Research," Department of Defense Guide for Managing Information Technology (IT) as an Investment and Measuring Performance," Version 1.0,10 February February: see month. 1997; and Robert S. Kaplan Robert S. Kaplan is Baker Foundation Professor at Harvard Business School and co-creator, together with David P. Norton, of the balanced scorecard, a means of linking a company's current actions to its long-term goals. and David P. Norton, Translating Strategy into Action: The Balanced Scorecard Balanced Scorecard A performance metric used in strategic management to identify and improve various internal functions and their resulting external outcomes. The balanced scorecard attempts to measure and provide feedback to organizations in order to assist in implementing , (MA: Harvard University Harvard University, mainly at Cambridge, Mass., including Harvard College, the oldest American college. Harvard College Harvard College, originally for men, was founded in 1636 with a grant from the General Court of the Massachusetts Bay Colony. , 1996.) (2.) "Chief Financial Officer's Act of 1990," Public Law 101-576; "National Defense Authorization Act The National Defense Authorization Act is the name of a United States federal law that is enacted each fiscal year to specify the budget and expenditures of the United States Department of Defense. for Fiscal Year 1996," Public Law 104-106. See also "Government Performance and Results Act The Government Performance and Results Act (GPRA) is a US Law enacted in 1993. It is one of a series of laws designed to improve government project management. The GPRA requires agencies to engage in project management tasks such as setting goals, measuring results, and reporting of 1993," Public Law 103-62, and "Paperwork Reduction Act The Paper Reduction Act, officially the Paperwork Reduction Act of 1980, Pub. L. No. 96-511, 94 Stat. 2812 (Dec. 11, 1980), codified in part at Subchapter I of Chapter 35 of Title 44 of the United States Code, through , is a United States federal law enacted in 1980 that of 1995," Public Law 104-13. These can be located at http://thomas.loc.gov/. (3.) A Balanced Scorecard framework (see Kaplan reference above) can be used, or any other multi-attribute method that captures the rationale of choices. (4.) Thank you to Dr. Ken Kuskey for introducing me to these metaphors. (5.) Examples are taken from Federal CIO Council, Capital Planning and IT Investment Committee, ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). and the Value Puzzle “Puzzle solving” redirects here. For the concept in Thomas Kuhn's philosophy of science, see normal science. A puzzle is a problem or enigma that challenges ingenuity. , April 1999, pp. 10-11. (6.) Examples are taken from Federal CIO Council, Capital Planning and IT Investment t Committee, ROI and the Value Puzzle, April 1999, p. 35. (7.) Note that these four categories of "returns" were inspired by Raines' Rule #4. See http://www.itpolicy.gsa.gov/mke/copplan/raines.htm
Investment Decision Process: SelectionSteps and Products
Steps
1. Understand the Environment
2. Develop Investment Framework
3. Construct Baseline of Investments
4. Assess Mission Tasks Performance and
Investments' Contribution
5. Design Resource Solutions * Identify types of decisions
* Select decision analytical tool
6. Project Relative Benefits of * Identify and measure performance,
Resource Solution if possible
7. Select "Best Value" Investment Package,
Based on Value and Cost
Steps Products
1. Understand the Environment Key ownership/leadership
assumptions
2. Develop Investment Framework Create "value-focused" framework
for investment evaluation and
decision-making
3. Construct Baseline of Investments Provide cost data used in tradeoff
scenarios and portfolio analysis
4. Assess Mission Tasks Performance and Conduct gap analysis; align
Investments' Contribution capabilities with mission tasks
5. Design Resource Solutions Build incremental or distinct
investment packages
6. Project Relative Benefits of Identify and prioritize investment
Resource Solution strategies
7. Select "Best Value" Investment Package, Develop options for implementation
Based on Value and Cost
Organizational BPR Activity Performance Measurement Activity
1. Understand the environment 1. Performance Planning and Assessment
* Organizational missions Obtain:
* System architure/ * Entity's goals, objectives,
key processes vision statement, and mission
* Key players: resource owners, * Operating manuals and
resource users, respon- other written procedures
sibilities, decision makers
* Current internal reports for
performance measurement
* Possible new bodies: steering * Copies of internal and
committees, etc. external performance
reports covering operations,
oversight inspections, and
related correspondence
* Decisions that need to be * Identify key processes
made (and information to be addressed
needed to make them)
* Perform process design workshops
to verify or complete missing
elements needed to develop
performance measures
Asses:
* inherent risks in
organizational structure
* management control procedures,
philosophy or operating style
* management commitment to legil-
ative or regulatory compliance
2. Determine Management Objectives
2. Develop Framework and Performance Criteria
* Value-based framework within * Identify key and critical
which to make management activities that drive the
and investment decisions: total process and impact
establish key pillars of process efficiency, mission
value to the organization effectiveness, product quality,
timeliness, productivity,
cost efficiency, and risk.
* Strategic objectives:
establish guidance sources
of mechanisms to be used,
and key strategies that will
evolve into actionable goals
* Research and benchmark best
practices for the
transportational/rail
industry regarding strategy
development and revenue-
enhanding developments
3. Baseline Investments
* Answer: what are we currently
investing in Create a "business
model" in which asset and
Investment value can be
totaled for an overview of
your investment portfolio.
* Answer: What are the total
life-ctde cost estmates
for these investments?
* Answer: What other investments
are not in our scope but are
significanly affected by our
investment choices? (This assists
with organizational buy-in
for investment decisions made in
a particular business unit.)
4. Gap Assessment
* What do we want to look like?
* What are we not doing? 3. Develop Preliminary Measures
* What are the key gaps? (may * Sketch performance measures from
gap
involve a prioritization) assessment ("What you know")
* How would we know if the * Identify data needed to generate
gaps were closed? performance measures
5. Solution Design * Validate data reliablity
* Using gap assessment and * Locate and determine instrument
underestimating of the "as- to collect data
is," define tactical obje-
ctives of "desired iytcines"
* Define performance measures * Determine frequency
that are commensurate with of data collection
these objectives
* Investigate and design
solution alternatives to
close the gaps
* Start with BPRs
* Next, consider investment
initiaitives, including
outsourcing solutions
Performance Performance
Organizational BPR Activity Measurement Measurement Week
Team Tasks Team Tasks
1. Understand the environment 1-3
* Organizational missions [lambda] [phi]
* System architure/ [lambda] [phi]
key processes
* Key players: resource owners, [lambda]
resource users, respon-
sibilities, decision makers
* Possible new bodies: steering [lambda]
committees, etc.
* Decisions that need to be [lambda]
made (and information
needed to make them)
[lambda] [phi]
[lambda]
3-4
2. Develop Framework
* Value-based framework within [lambda] [phi]
which to make management
and investment decisions:
establish key pillars of
value to the organization
* Strategic objectives:
establish guidance sources
of mechanisms to be used,
and key strategies that will
evolve into actionable goals
* Research and benchmark best
practices for the
transportational/rail
industry regarding strategy
development and revenue-
enhanding developments
3. Baseline Investments 4-5
* Answer: what are we currently
investing in Create a "business
model" in which assetand
Investment value can be
totaled for an overview of
your investment portfollo.
* Answer: What are the total
life-ctde cost estmates
for these investments?
* Answer: What other investments
are not in our scope but are
significanly affected by our
investment choices? (This assists
with organizational buy-in
for investment decisions made in
a particular business unit.)
4. Gap Assessment 6-7
* What do we want to look like?
* What are we not doing?
* What are the key gaps? (may [lambda] [phi]
involve a prioritization)
* How would we know if the [lambda] [phi]
gaps were closed?
5. Solution Design [lambda] [phi] 7-11
* Using gap assessment and [lambda]
underestimating of the "as-
is," define tactical obje-
ctives of "desured iytcines"
* Define performance measures [lambda]
that are commensurate with
these objectives
* Investigate and design
solution alternatives to
close the gaps
* Start with BPRs
* Next, consider investment
initiaitives, including
outsurcing solutions
6. Project Benefits 4. Test Measurement Activity
* Measure and assess performance; * Develop date collection
delivery, product or information instruments, to include:
access, data accuracy, compati- surveys, spreadheets,
bility, effectiveness, flexi- metadatea of existing data,
bility, security, savings, ... qualitative observations
* Assess risk factors: technologi- * Populate with baseline data
cal, implementation, strategic,
organizational, change manage-
ment, human element, economic, ...
* Categorize benefit types: * Review processes and data
this may flow naturally results
from the "pillars of value"
that were defined in step 2
* Modify data and/or
collection processes
7. Selection
* Decide critical selection
criteria; define a head of
time, in relation to the
gaps previously articulated
and the implementation
realities that exist, and key
criteria that must be met
- Time deadlines
- Financial consultants
- System interoperability and
interdependency necessities
* Scale benefits: design a
process that will scale all
benefit/risk information
* Conduct benefit/risk analysis
* Coordinate "best value"
package of investments
8. Control
* Define how data and perfor-
mance indicators reflect
business activities
* Define decision mechanism/
processes and bodies to take
action or make recommendations
for improving or remedying
performance deficiencies
* Link this mechanism and process
to other organizational time
tables and decision processes 5. Refine measures
* Create reporting out mechanism * Iteratively assess data and
for informing, making, and data collection methods
and actioning on control to determine if:
decisions; e.g., bill document - Date is too costly to collect
relay performance was too - Performance measures did not
slow, so resource owner made communicate the critical
discretionary-approved (small) information for decision-making
investment to improve system Additional Performance
effectiveness measures are needed
9. Evaluate * Link these improvements with
critical gaps
* Conduct evaluations/audits * Link improvements to pillar of
value of performance category
- Evaluate established * Use to support benefit valuation
performance indicators at a
pre-determined time frequency
(annually, quarterly, etc.)
- Assess the control activities:
frequency, costs of change,
possible improvements
for "flag" problem areas.
* Report out: Enterprise
and system performance,
control activities, problem
flags, recommendations
for areas needed for change
* Coordinate results
with Selection process
6. Project Benefits 10-12
* Measure and assess performance;
delivery, product or information
access, data accuracy, compati-
bility, effectiveness, flexi-
bility, security, savings, ... [lambda] [phi]
* Assess risk factors: technologi- [lambda]
cal, implementation, strategic,
organizational, change manage-
ment, human element, economic, ...
* Categorize benefit types:
this may flow naturally [lambda] [phi]
from the "pillars of value"
that were defined in step 2
[lambda]
7. Selection 13
* Decide critical selection
criteria; define a head of
time, in relation to the
gaps previously articulated
and the implementation
realities that exist, and key
criteria that must be met
- Time deadlines
- Financial consultants
- System interoperability and
interdependency necessities
* Scale benefits: design a
process that will scale all
benefit/risk information
* Conduct benefit/risk analysis
* Coordinate "best value"
package of investments
8. Control ongoing
* Define how data and perfor-
mance indicators reflect
business activities
* Define decision mechanism/
processes and bodies to take
action or make recommendations
for improving or remedying
performance deficiencies
* Link this mechanism and process
to other organizational time
tables and decision processes
* Create reporting out mechanism
for informing, making,
and actioning on control
decisions; e.g., bill document
relay performance was too
slow, so resource owner made
discretionary-approved (small)
investment to improve system
effectiveness [lambda] [phi]
9. Evaluate periodic
* Conduct evaluations/audits
- Evaluate established
performance indicators at a
pre-determined time frequency
(annually, quarterly, etc.)
- Assess the control activities:
frequency, costs of change,
possible improvements
for "flag" problem areas.
* Report out: Enterprise
and system performance,
control activities, problem
flags, recommendations
for areas needed for change
* Coordinate results
with Selection process
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