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NH Hotels Milanofiori, Assago (MI) - 18 Oct. 13

"How to find the appropriate set of KPI’s to support
Management in Decisi...
Agenda
 Objectives & Components of Management Control System
 An Integrated Approach for Management Control System Enhan...
Objectives & Components of
Management Control System
Management Control System should allow a better understanding and mon...
Enterprise Value Management
Reply Consulting Support
Starting from the strategic vision defined by the Company, Reply Cons...
An Integrated Approach for
Management Control System enhancement
FROM STRATEGY TO CONTROL OBJECTS:
STRATEGY TO MEASURES
From Strategic Objectives
to Planning & Control Model
Strategy to Measures
Footsteps

PERFORMANCE
MANAGEMENT
Defines “How to control them?” (the Control Tools) and are represen...
Enterprise Value Management
Strategy Matrix 1/7
VALUE DRIVERS

KPI

Volumes

REVENUE
INCREASE

PROCESSES
P.01 - UNDERSTAND...
Enterprise Value Management
Strategy Matrix – Value Drivers
Value Drivers

2/7

Value Levers

Acquire New
Customers

Marke...
Enterprise Value Management
Strategy Matrix – Tactical Value Levers

3/7

The Tactical Value Levers represent the full set...
Enterprise Value Management
Strategy Matrix – Processes 4/7
The Value Chain summarizes all the activities performed in the...
Enterprise Value Management
Strategy Matrix – Sub Processes
P.02 - STRATEGIC PLANNING

P.02.1 - Design the organizational
...
Enterprise Value Management
Strategy Matrix – KPI Definition

6/7

The KPI Library is a database of more than 700 indicato...
Strategy to Measures –
Analisys Dimensions Definition

7/7

Following KPI definition an applicable set of Analisys Dimensi...
Conclusions
An integrated approach
The Right Answer

Starting from the strategic vision defined by the Company, Reply Consulting offer...
Reply Consulting support your Evolution….
Reply Consulting, once defined with the Management or recived from the Company t...
Q&A
Thank you
Marco Cossutta, Partner
m.cossutta@reply.it
Reply Consulting
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How to find the appropriate set of KPI’s to support
Management in Decision Making: An Integrated Approach"

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  1. 1. NH Hotels Milanofiori, Assago (MI) - 18 Oct. 13 "How to find the appropriate set of KPI’s to support Management in Decision Making: An Integrated Approach" Marco Cossutta, Partner Reply Consulting
  2. 2. Agenda  Objectives & Components of Management Control System  An Integrated Approach for Management Control System Enhancement  From Strategic Objectives to Planning & Control Model  Strategy to Measures Footsteps  Conclusions 2 © International Institute of Business Analysis
  3. 3. Objectives & Components of Management Control System Management Control System should allow a better understanding and monitoring of performance, risks detection and prevention and the alignment of people behavior to strategic objectives of the Company. Management Control System is based on two complementary elements:  The Control Objects (“What should be controlled?”)  the Control Tools (“How to control them?”) Control Tools Control Objects Key Performance Indicators (KPI) Analisys Dimensions Timing and key addressee Organization & Processes Incentive System Accounting Tools & Policies Information System
  4. 4. Enterprise Value Management Reply Consulting Support Starting from the strategic vision defined by the Company, Reply Consulting offers an external point of view to support the full roll out of the plans and to support the alignment of objectives, activities and performance management system. Reply Consulting has designed a new methodology to evaluate: • the completeness of the strategy defined, • the alignment of the operational targets to the strategic directions, • the completeness of the activities to achieve the targets, • the adequacy and reliability of measurement and monitoring tools. The Strategy Matrix is a tool enhabling an integrated and comprehensive assessment of : • The Value Levers, • The critical processes, • The performance measures (KPIs) • The potential enhancements required
  5. 5. An Integrated Approach for Management Control System enhancement
  6. 6. FROM STRATEGY TO CONTROL OBJECTS: STRATEGY TO MEASURES
  7. 7. From Strategic Objectives to Planning & Control Model
  8. 8. Strategy to Measures Footsteps PERFORMANCE MANAGEMENT Defines “How to control them?” (the Control Tools) and are represented by: Organization & Processes, Accounting Tools & Policies, Information System CONTROL TOOLS Defines “What should be controlled?” (The Control Objects) and are represented by: Key Performance Indicators (KPI), Analisys Dimensions, Timing & Key Addressee Represents the translation of strategic guidelines into expected long-term objectives STRATEGIC OBJECTIVES Represents the levers for overcoming barriers for change and promote strategic guidelines throughout the organization Communication KEY ACTIONS Training Defines the action plan to be adopted to succeed in strategy implementation Rewards CRITICAL PROCESSES Benchmarking Identify the key processes that enable strategic objectives overcome STRATEGY Mission Vision Values CONTINUOUS IMPROVMENT CONTROL OBJECTS
  9. 9. Enterprise Value Management Strategy Matrix 1/7 VALUE DRIVERS KPI Volumes REVENUE INCREASE PROCESSES P.01 - UNDERSTAND MARKETS & CUSTOMERS Key Performance Indicators Pricing P.02 - STRATEGIC PLANNING P.03 - DESIGN PRODUCTS & SERVICES P.04 - MARKET & SELL Commercial, Technical & General Costs P.06 - PRODUCE & DELIVER PRODUCTS /SERVICES Cost of Goods Sold P.07 - AFTER SALES P.08 - DEVELOP & MANAGE HUMAN RESOURCES Receivables & Payables External Factors and Competitive Environment P.11 - REGULATORY & COMPLIANCE ASSET OPTIMIZATION CORPORATE OUTLOOK Company Strengths MARGIN PROFITABILITY ENHANCEMENT Tangibles and Intangibles P.09 - INFORMATION & COMMUNICATION TECH P.10 - MANAGE FINANCIAL & PHYSICAL RESOURCE Inventory REVENUE INCREASE ASSETS OPTIMIZATION KPI CORPORATE OUTLOOK PROFITABILITY ENHANCEMENT P.05 - PROCUREMENT P.12 - MANAGE EXTERNAL RELATIONSHIPS P.13 - MANAGE IMPROVEMENT & CHANGE TACTICAL VALUE LEVERS 1. Develop new patterns 2. Enhance incremental changes
  10. 10. Enterprise Value Management Strategy Matrix – Value Drivers Value Drivers 2/7 Value Levers Acquire New Customers Marketing & Sales Product & Service Innovation Account Management Revenue Increase Volumes Retain and Enhance Existing Customers Cross-Sell & UpSell Retention Leverage Differentiating Assets Pricing Strengthen Pricing Cash/ Asset Management Demand & Supply Management Price List Optimization KPI
  11. 11. Enterprise Value Management Strategy Matrix – Tactical Value Levers 3/7 The Tactical Value Levers represent the full set of interventions to reach the targets defined by the Top Management. They could introduce new rules, processes and organizational changes – Develop New Patterns – or improve existing processes and/or activities – Enhance Incremental Changes. The below example is related to Retain and Enhance Existing Customers - Cross-Sell & Up-Sell : Develop New Patterns Enhance Incremental Changes Increase focus on high value/ high potential customer Improve total customer experience (purchasing, fulfillment, usage, service…) Increase focus on most profitable products and services Improve brand strength and goodwill Increase focus on most effective sales and advertising channels Improve cross-sell/up-sell skill for staff Increase focus on expansion of customer relationship Improve staff incentives for crossselling/up-selling … …
  12. 12. Enterprise Value Management Strategy Matrix – Processes 4/7 The Value Chain summarizes all the activities performed in the Company to design, develop, produce, sell and ship the products . All the activities are classified in two main clusters: • Operations, including all ‘value creating’ areas to produce, sell and deliver the product to the final customer, and to offer post sales assistance SUPPORT PROCESSES OPERATIONS • Support & Overheads, including all other supporting areas to operations P.01 UNDERSTAND MARKETS & CUSTOMERS P.02 STRATEGIC PLANNING P.03 DESIGN PRODUCTS & SERVICES P.04 MARKET & SELL P.08 - DEVELOP AND MANAGE HUMAN RESOURCES P.09 - INFORMATION AND COMMUNICATION TECNOLOGIES P.10 - MANAGE FINANCIAL AND PHYSICAL RESOURCES P.11 - REGULATORY AND COMPLIANCE P.12 - MANAGE EXTERNAL RELATIONSHIPS P.13 - MANAGE IMPROVEMENT AND CHANGE P.05 PROCUREMENT P.06 PRODUCE & DELIVER PRODUCTS AND SERVICES P.07 AFTER SALES
  13. 13. Enterprise Value Management Strategy Matrix – Sub Processes P.02 - STRATEGIC PLANNING P.02.1 - Design the organizational structure and relationships between units P.02.2 - Develop budgets P.02.3 - Business planning and simulating P.02.4 - Business development and corporate performance monitoring 5/7 P.03 - DESIGN PRODUCTS & SERVICES P.03.1 – Identify opportunities for new products and services P.03.2 - Product costing P.03.3 - Develop new products /services concept and plans P.04 - MARKET & SELL P.04.1 - Bring the new products and services to market P.04.2 - Brand management P.04.3 - Advertising and promotion P.04.4 - Customer acquisition P.03.4 - R&D portfolio planning and management P.04.5 - Develop pricing strategy P.03.5 - Product management P.04.6 - Sell products and services P.08 - DEVELOP AND MANAGE HUMAN RESOURCES P.08.1 - Develop and manage base and variable compensation P.08.2 - Recruit, select and hire employees P.08.3 - Manage deployment of personnel and teams P.08.4 - Develop and train employees P.08.5 - Time & attendance P.08.6 - Process payroll P.04.7 - Channel execution P.04.8 - Sales force management P.04.9 - Store management P.04.10 - Customer relationship mgt. P.04.11 - Billing
  14. 14. Enterprise Value Management Strategy Matrix – KPI Definition 6/7 The KPI Library is a database of more than 700 indicators of cost, quality and time, each linked to the related Value Chain processes. Below an example (related to process P.04 Market & Sell): • KPI Cost-based – summarizing the financial performance • KPI Quality-based – aiming at evaluating how much the goods/services fit customers’ needs • KPI Time-based - measuring the quickness of responsed and flexibility to external factors
  15. 15. Strategy to Measures – Analisys Dimensions Definition 7/7 Following KPI definition an applicable set of Analisys Dimension will be identified for each of them. To any combination of KPI-Analisys Dimension will be assigned addressee and timing (frequency & iteration).
  16. 16. Conclusions
  17. 17. An integrated approach The Right Answer Starting from the strategic vision defined by the Company, Reply Consulting offers a comprehensive metodology (based on Business Analisys Techniques) for answering to the question: "How to find the appropriate set of KPI’s to support Management in Decision Making” Alternative access points
  18. 18. Reply Consulting support your Evolution…. Reply Consulting, once defined with the Management or recived from the Company the Strategic Plan, is able to provide competencies, methodologies and tools for: • evaluating coehrency, trustworthiness and financial sustainability of defined strategy, • evaluating adequacy and reliability of the Management Control System (Organization, Processes and Information System) in place, • Defining and implementing the corrective actions related to: ARTICOLAZIONE PIANO INDUSTRALE DEFINIZIONE OBIETTIVI Cosa ottenere VALIDAZIONE PIANO INDUSTRIALE • Definizione Strategia • Declinazione Intenzioni Strategiche • Articolazione delle Azioni Chiave Verifica di: • Coerenza • Attendibilità • Sostenibilità Finanziaria o Organization: functions; DEFINIZIONE MODELLO DI BUSINESS DEFINIZIONE MISURATORI Cosa misurare ANALISI PROCESSI • Mappatura Catena del Valore • Individuazione e definizione di Fattori Critici di Successo e Rischio Individuazione e definizione dei Processi e Sottoprocessi Critici Definizione indicatori di prestazione (KPI), dimensioni di analisi e delle analisi di profittabilità Verifica di: • Adeguatezza (confronto KPI disponibili vs/teorici) • Affidabilità (analisi affidabilità KPI disponibili) Assessment and AFC and Internal empowement; Auditing MBO Plans definition;... o Processes: Definition and documentation of Policies and Procedures • Valutazione dell’efficienza ed efficacia dei processi da reingegnerizzare rispetto alle best practice • Formalizzazione procedure • Compliance..... VERIFICA ADEGUATEZZA E AFFIDABILITA’ Skill of MODELLO DI PIANIFICAZIONE E CONTROLLO OTTIMIZZAZIONE PROCESSI DEFINIZIONE AZIONI Cosa Fare Re-organization OTTIMIZZAZIONE ORGANIZZAZIONE • Revisione organizzazione • Definizione piano di incentivazione per il Management coerente con gli obiettivi definiti nella strategia formulata...... OTTIMIZZAZIONE SISTEMI INFORMATIVI ATTIVITA’ COMUNI A OGNI AZIENDA ATTIVITA’ MANDATORIE PER QUOTANDE MA ESSENZIALI PER OGNI AZIENDA Introduzione di sistemi di pianificazione e reporting per l’analisi dei dati ed una loro efficace fruizione sia in sede di pianificazione sia in sede di consuntivazione...... related to AFC, Internal Auditing and ICT functions; Re-design or process improvment; 231 and 262 Compliance;... o Information System (Information System Planning; Software Selection, Design and Implementation of Planning & Reporting Systems; ERP Control Model Adjustment; Datawarehousing & EAI;...
  19. 19. Q&A
  20. 20. Thank you Marco Cossutta, Partner m.cossutta@reply.it Reply Consulting
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