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Insync10 1708 145 vella
 

Insync10 1708 145 vella

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    Insync10 1708 145 vella Insync10 1708 145 vella Presentation Transcript

    • Achieving Organisational Change from Measurement and Reporting Paul Vella 17-Aug-2010 The most comprehensive Oracle applications & technology content under one roof
    • Introduction • Change • Landscape • Resistance • Measurement • Best Practice • Use Measurement Strategically • OBI Analytics KPI and Metrics • 11g Scorecard Features
    • Change Landscape Political Change “It is change, continuing change, inevitable Technological Financial change, that is the dominant factor in Change Change society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it Organisational will be ...” - Isaac Asimov Change Demographic Climate Change Change Market Change
    • Change Landscape •Political Change •Organisation Change •Government Policy •Merger •Taxation Policy •Acquisition •Regulatory Framework •Succession •Financial Change •Turnover •Recession •De-Centralisation •GFC •Shared Services •Interest Rates •Relocation •Inflation •Demographic Change •Climate Change •Population Age •Environment Change •Urbanisation •Catastrophic Events •De-Urbanisation •Market Change •Technological Change •Competitive Framework •System Change •Consumer Demand •User Interface Change •Developing Markets
    • Change Process • TQM Baseline Change • Baldridge • Six Sigma (define, measure, Continuous analyze, improve, control) Improvement • Kaizen (standardise, measure, gauge, innovate) Plan Measure • PDCA (plan, do, check, act)
    • Resistance to Change – Top 10 1. Risk of Change 2. Connection to “Old Way” • Resistance relates to people and 3. No Role Models for “New Way” perception 4. Fear about Competence to • You can change technology and Change systems, but unless it is accepted, 5. People are too busy to Change then there will be significant 6. Healthy Scepticism resistance 7. Fear of a “Hidden Agenda” • Can lead to expensive failures 8. Feeling Threatened / Loss of Status 9. Past Failure to Change 10. Believe that change is a bad idea
    • Using Measurement Strategically End State Assess What are the changes needed in Measure people, processes, products/services, and climate, in Define Take a Leap order to drive the required results. Targets Magic Happens Baseline Determine Current State Measures
    • Measures should…. 1. Ownership: Connect business results to people 2. Forward Looking: Involve a healthy mix of leading and lagging indicators 3. Current: Are kept alive in discussions-and not left sitting in a binder somewhere 4. Realistic: Are given time to work 5. Challenging: Have teeth 6. Strategically Aligned: Support organisational goals over and above functional/divisional goals 7. Consistent: Measure the right things
    • How Measurement Helps… 1. Need for Change: Provide evidence that change is needed 2. Clarity: Clarify the purpose and direction of the change effort, by forcing people to consider its specific impact in unambiguous terms 3. Communication: Measurement is a form of communication - it tells people what you care about 4. Progress: Tracking the effectiveness of the change effort both tells people that it is important and provides a way to judge how well it is being implemented, or how well it was designed 5. Business Case: The results can be used as a justification for future projects 6. Direction: The measurement effort can be set up as a framework for expecting and anticipating change, making it seem more controllable and less threatening
    • Approach to Measurement 1. Develop Strategy Map of • KPIs are measures by which the performances of organisations, Organisation business units, and their divisions, 2. Define Objectives under each departments and employees are Strategy periodically assessed. 3. Define KPIs under each Objective • Balanced Scorecard Methodology is 4. Baseline Current State used to review and track 5. Set and Agree Targets performance of KPIs aligned to the 6. Measure and Report on Indicators Objectives and Strategic Map of the Organisation. 7. Review Progress against Agreed Targets
    • Defining KPIs 1. Acceptable, understood, meaningful and measurable. 2. Measured when systems and processes • SMART Criteria (Specific, to capture and measure are in place. Measurable, Achievable, Relevant, 3. Meaningful by contributing to and Time phased. organisational improvement. 4. Take into account seasonal, geographic, demographic considerations 5. Lower level KPIs aligned to higher level objectives 6. Numerical Targets should be set in terms of a value, a lower limit, an upper limit, range of values, percentage or scheduled date.
    • OBI Analytics 430 Dashboard 350 Fact 550 Pages tables Dimensions 2000+ derived metrics 2500 3250 109 pre-built Reports Dashboards metrics
    • OBI Analytics Measures DSO Purchasing ROA AR Turnover DPO Misses %Adhoc Purchases AP Turnover ROE ROCE Inventory EBIT Turns Compa Ratio Days Cash in Current Ratio Hand CAPEX Ratio Cash Cycle Quick ratio
    • OBI Analytics KPIs AP AP Days Payables This metric shows Days Payable Outstanding (DPO). It Outstanding (DPO) shows the average length of the time the trade payables are outstanding before they are paid. This metric determines the average number of days in accounts payable to measure the effectiveness of the firm’s credit policies and indicate the level of investment in payables needed to maintain the firm’s expenditure level. AR AR Days Sales This metric compute4s the Days Sales Outstanding- (AR Outstanding (DSO) Balance / Average Daily Posted Revenue). Average Daily Posted Revenue is computed by Posted Revenue for the period / Number of days in the period. This metric determines the average number of days in accounts receivable to measure the effectiveness of the firm’s credit policies and indicate the level of investment in receivables needed to maintain the firm’s sales level.
    • Common KPIs - 2 AR AR Turnover Accounts receivable Turnover measures the number of times the trade receivables turnover annually. The higher the AR Turnover, the lower the working capital needs of the company. AP AP Turnover This metric calculates Purchases / Accounts Payables; where Purchases = total purchases from various suppliers.
    • Common KPIs - 3 Inventory Avg Inventory Days This metric determines the ratio of inventory to COGS to measure the efficiency of the firm’s inventory management (number of days of inventory held). A higher ratio or days indicates that inventory does not remain in the warehouses or on the shelves but rather turns over rapidly form the time of acquisition to sale. GL Cash Cycle This metric calculates an organisations cash cycle by subtracting the Operating Cycle in days from the Average Payables in days GL Working Capital This metric determines the ratio of revenue to Working Turnover Capital where working capital = current assets less current liabilities
    • Common KPIs - 4 GL CAPEX ratio This metric is the ratio of operating cash flow to capital expenditure for the period. GL Current ratio This metric calculates the current assets to current liabilities ratio. Sometimes called the liquidity ratio. Provides an indication of financial risk. GL Days Cash In Hand This metric calculates (Cash + AR) / Minimum Operating Expenses ; where Minimum Operating Expenses = (Total Operating Expenses + Interest Expenses – Depreciation)
    • Common KPIs - 5 GL Debt to Equity This metric calculates the long-term debt to total equity ratio. GL EBIT This metric calculate profitability by calculating Revenue – COGS – Selling and Marketing Costs – Other Operating Expenses – R&D Expenditure + Other Income GL Net Working This metric subtracts current assets from current Capital (NWC) to liabilities, then divides the results into total assets to Assets determine the ration of net working capital to total assets.
    • Common KPIs - 6 GL Quick Ratio This metric perovides liquidity information by calculating (Current Assets – Inventories) / Current Liabilities. GL Times Interest This metric calculates (Earnings before interest and taxes) Earned / Interest expense where EBIT = revenue – COGS – Selling and Marketing Costs – Other Operating Expenses – R&D Expenditure + Other Income GL Return on Assets EBIT / Total Assets * 100 (ROA)
    • Common KPIs - 7 GL Return on Capital Pre-Tax Income / Total Capital Employed *100; Capital Expenditure (ROCE) Employed = (Total Shareholders Funds + Long Term Debt) GL Return on Equity Net Income / Total Shareholders Funds * 100 HR Leave •Absence Days (Notified / Not Notified) Ratios •Annual Leave Balance •Long Service Leave Balance •Headcount •Diversity Ratios (M/F), (P/T) •Compa Ratio (Emp salary / Avg salary) •Termination ratios •Average Length of Service •Training Days pa •Supervisor / Employee ratios
    • OBI 11g Scorecarding and Metrics • OBIEE 11gR1 includes a new product called Oracle Scorecard and Strategy Management. •KPIs are defined within the web catalog and are defined by taking a measure, a target measure and a set of thresholds, which can then be used either directly in dashboards (by use of another new feature called KPI Watchlists) or within one of the new scorecards.
    • OBI 11g Scorecarding and Metrics •Build KPIs and KPI Watch Lists •You can either display the results of the KPI in a simple table, or you can add them to a KPI Watchlist. •These can be added like any other object to a user’s dashboard. •This KPI Watchlist can then be sliced and diced, using dimension controls at the top of the watchlist, to allow the user to drill into whatever level of data they are authorized to view.
    • OBI 11g Scorecarding and Metrics The Scorecard part of OBIEE 11g builds on the foundation of KPIs to allow you to define complex, multi-part strategies using the metrics in your semantic layer.
    • OBI 11g Scorecarding and Metrics •These objectives are organized into a hierarchy. •Create a strategy tree diagram that shows how each objective feeds up into the overall strategy. •The objective of improving store performance is made up of financial, and non- financial objectives, each with their own set of KPIs.
    • Summary • Change • Change Landscape • Resistance to Change • Measurement • Best Practices • Using Measurement Strategically • OBI Analytics KPI and Metrics • 11g Scorecard Features
    • Tell us what you think… • http://feedback.insync10.com.au