indianapolis life insurance company balanced scorecard project tier ii scorecards draft version 2.0...
TRANSCRIPT
Indianapolis Life Insurance Company
Balanced Scorecard ProjectTier II Scorecards
Draft Version 2.0
January 21st, 1999
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Product-Market Responsibilities
� Product-Market Portfolio Responsibilities– Portfolio profitability
– Oversight of the New Product Development process
– Prioritization of product lines under development
– Identifying new markets and oversight of portfolio market planning
� Product Manager Responsibilities– Product Profitability
– Market research (check on alignment with distribution)
– Product development
– Pricing
– Product filing
– Illustration software development & Re-proposal development
– Product promotion: (Compliance & marketing materials) (check on distribution alignment)
– Administration Systems Analysis (check on operations alignment)
BOP: Strategic alliance relationships: relationship management, contract negotiations, etc. Question on interface/overlap?
Summarization of key responsibilities for Product-Market Portfolio and Product Managers
3
Cascading & Aligning Scorecards
EnterpriseStrategies
Enterprise Critical Success Factors (CSF’s)
EnterpriseMeasures
Portfolio & Process
Objectives
Portfolio & Process CSF’s
Linkage
Alignment
Enterprise
Tier II*
Tier IIa
Portfolio & Process
Measures
Tier IIaGoals
Tier IIa CSF’s
Tier IIaMeasures
Scorecards are cascaded and aligned through the critical success factors
*Tier II currently contains: Product-Market Portfolios (Financial Protection & Wealth Accumulation), Business Process Outsourcing, Customer Care (Operations and Distribution), Shared Services and Financial.Tier IIA currently encompasses products (Term UL, WL, VUL, Annuity)
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Enterprise -- Tier II Mapping
Enterprise Critical Success Factor Product Market Portfolio BPO Customer Care Shared Services
Wealth Accumulation Financial Protection Distribution Operations Financial
Financial
Quality Earnings Growth Consistent with Plan
Quality ROE Consistent with Plan
Capital & Risk Management
Balanced Portfolio of Business
CustomerExpand Customer Base & Penetration of Existing CustomersDevelop Products that Deliver True Value to the Customer & Enterprise
Provide Quality Service Meeting Customer Needs
Maintain Appropriate Rating
ProcessAlignment of Products, Services & Delivery to Target Customer Segments
Optimize Technology & Infrastructure
Efficient & Effective Business Fundamentals
Learning & Growth
Employee Satisfaction
Developing Current Leadership & Leadership of the Future
Recruiting & Retention
Education & Training
Well-Aligned Incentives
High Level of InfluenceLower Level of Influence
Draft
*
* New market development & increasing value to existing customers** Customer refers to internal customers: operations & distribution
Identify enterprise critical success factors that may be influenced at the Tier II level
*
** **
5
Establishing Tier II Objectives
Product-Market Portfolio Objectives:
1) Meet portfolio ROE and earnings growth goals 2) Ensure capital plans are in place for new products and that products are built with assumptions that the organization can support 3) Develop products that deliver value and are aligned to target customer segments 4) Identify and develop new markets and increase value to existing customers5) Win through people
Draft
Enterprise critical success factors that are “highly influencable” become “Tier II” objectives… additionally, there may be other objectives which are aligned with the enterprise scorecard
Product-Market Balanced Scorecard
Enterprise Critical Success Factor Product Market Portfolio BPO Customer Care Shared Services
Wealth Accumulation Financial Protection Distribution Operations Financial
Financial
Quality Earnings Growth Consistent with Plan
Quality ROE Consistent with Plan
Capital & Risk Management
Balanced Portfolio of Business
CustomerExpand Customer Base & Penetration of Existing CustomersDevelop Products that Deliver True Value to the Customer & Enterprise
Provide Quality Service Meeting Customer Needs
Maintain Appropriate Rating
ProcessAlignment of Products, Services & Delivery to Target Customer Segments
Optimize Technology & Infrastructure
Efficient & Effective Business Fundamentals
Learning & Growth
Employee Satisfaction
Developing Current Leadership & Leadership of the Future
Recruiting & Retention
Education & Training
Well-Aligned Incentives
High Level of InfluenceLower Level of Influence
*
* New market development & increasing value to existing customers** Customer refers to internal customers: operations & distribution
*
** **
6
Product-Market Balanced Scorecard
DraftIdentify Tier II critical success factors and key performance indicators for the objectives
Product-Market Portfolio Objectives:
1) Meet portfolio ROE and earnings growth goals 2) Ensure capital plans are in place for new products and that products are built with assumptions that the organization can support 3) Develop products that deliver value and are aligned to target customer segments 4) Identify and develop new markets and increase value to existing customers5) Win through people
Critical Success Factor Measure
Financial
Profitable growth Portfolio earnings & ROE
Plan for and ensure adequate capital Capital plan in place
ALM Indicator
Customer
Develop timely, innovative, flexible products Product approval to launch cycle time
Maintain close relationship with Customer Care for new products and market opportunities
Sales growth versus plan
Keep existing products competitive Retention (FP), Lapse Rate (WA)
ProcessEnsure alignment of technology (development to administration)
Average software turnaround time (to be detemined)
Efficient and effective business fundamentals Average filing turnaround time
Build products that meet expenses Allowables to expenses*
Learning & Growth
Employee satisfaction Employee satisfaction index
Retention (To be determined)
* or Budget vs. Actual Expense
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Critical Success Factor Measure Current Results Target
Financial
Profitable growth Portfolio earnings & ROE
Plan for and ensure adequate capital Capital plan in place
ALM Indicator
Customer
Develop timely, innovative, flexible products Product approval to launch cycle time
Maintain close relationship with Customer Care for new products and market opportunities
Sales growth versus plan
Keep existing products competitive Retention (FP), Lapse Rate (WA)
ProcessEnsure alignment of technology (development to administration)
Average software turnaround time (to be detemined)
Efficient and effective business fundamentals Average filing turnaround time
Build products that meet expenses Allowables to expenses*
Learning & Growth
Employee satisfaction Employee satisfaction index
Retention (To be determined)
Next Steps - Set Targets and Identify Tactics to Reach Targets
Each measure should have a target (short term and long term) and an identified initiative/tactic to bridge the performance gap (current performance - target performance)
Initiative Alignment
Measure: ROEPerformance Gap: 5%Tactic/Inititiative: Rationalize Portfolio Owner TBDTactic Steps: 1) Determine product profitability 2) Identify distribution implications of rationalization 3) Identify operational implications of rationalization 4) Develop phase out plan 5) Initiative phase out plan
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Tier II Critical Success Factor Term Whole Life Un. Life VUL Annuity
Financial
Profitable growth
Plan and ensure for adequate capital
Balanced portfolio
Customer
Develop timely, innovative products
Maintain close relationship with Customer Care for new products
Process
Optimize product-market selection
Efficient and effective business fundamentals
Learning & Growth
Employee satisfaction
Portfolio -- Product Mapping
Ability to Influence
Product Manager Objectives:
1) 2)3)
Product Manager Balanced Scorecard
EnterpriseStrategies
EnterpriseCritical SuccessFactors (CSF’s)
EnterpriseMeasures
Portfolio &Process
Objectives
Portfolio &ProcessCSF’s
Enterprise
Tier II
Tier III
Portfolio &Process
Measures
Tier IIIGoals
Tier III CSF’s
Tier IIIMeasures
A similar process may be undertaken to develop Product manager objectives and scorecards aligned with the portfolio
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Horizontal Alignment
The same process may be used to identify objectives, critical success factors and performance indicators for the other Tier II areas. Additionally, the scorecards should be aligned “horizontally” to ensure internal requirements are met
� Distribution
– Cross-selling
– # of appointed reps (WA)
– Sales per appointed rep (WA)
– # of B/D selling agreements / distribution outlets (WA)
� Investments
– Risk/Reward profile, earned rate (WA)
� Shared Services
– Timeliness and accuracy of projects (WA)
– E-Commerce (WA)
Sample Product-Market “requirements”
Enterprise
Product-Market
Portfolios
Business Process
OutsourcingCustomer Care
Operations Distribution
Horizontal Alignment
Ver
tical
Alig
nmen
t
10
Developing a Scorecard
Conduct Interviews,
Review Business Plans, etc.
Develop Draft
Scorecard
Confirm Strategy
IdentifyPerformance
Measures
Refine Measures &
EstablishTargets
DevelopImplementation
Plan
Pre-Workshop
Confirm Critical
Success Factors
Post-Workshop
Workshop(s)
A scorecard is typically developed in a 3-phased approach
Facilitated Session with future “Scorecard Owner” and his/her direct reports or team
Tier II Current State