metrics: the why, the how and the when not

© Chazey Partners 2016

Metrics: The Why, the How and the When Not?

December 1, 2016| Arlington, Virginia

DELIVERING THE PROMISE …

North America | Latin America | Europe | Middle East | Africa | Asia©Chazey Partners 2016 2

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?


Agenda

Who We Are

Case Studies & Your Experience

Shared Services & Client Engagement

Performance Measurement Concepts

Establishing or Re-Building Frameworks


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 [email protected]

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 [email protected]

mailto:[email protected]



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


Business Continuity Planning

Audit Services

Cybersecurity

Operational Security

Business Continuity Planning

Global Consulting & Advisory: Three Pillars


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


Who We Worked With

OUR CLIENTS

WHERE WE COME FROM


Agenda

Who We Are






• 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


• 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


• 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


• 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


• 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


Agenda

Who We Are






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


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


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


Agenda

Who We Are






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


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


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


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


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


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


Agenda

Who We Are







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?


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.


• 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


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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