IN2004B- M1- Organizational Indicators

IN 2004 B

IN 2005 B

IN 2006 B

Cuadro de mando integralIndicadores de desempeñoTableros de control

Indicadores organizacionales

VisiónMisiónFODAEstrategia de negocio

Análisis estratégico

M1 - Organiztional Indicators

What would you consider as a business indicator?

Thanks

Team

Data

Dashboards

Timeline

Comparison

Process

Balanced Scorecard

Image

Quote

Referencias

Key Performance Indicators

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Index

Paul R. Niven

"The BSC tells the story of your strategy"

Balanced Scorecard (BSC)

Balanced Scorecard (BSC)

Ref (3); pg. 5

• Inicialmente, un énfasis en el desempeño fianciero de las organizaciones sin considerar otros aspectos.
• 1992 - Robert Kaplan (Profesor de Harvard) y David Norton (Consultor) publican el artículo " The Balanced Scorecard - Measures that Drive Performance".
• Una mejor visión del desempeño de las organizaciones a través de 4 perspectivas, balance entre indicadores.

Contexto

Wider perspective on performance

1992 - Robert Kaplan y David Norton

Emphasis on financial performance

Ref (3); pg. 5

Background

01 BSC Perspectives

Includes objectives related to customer's expections on flexibility, time, quality, and price.

Define inficators conidering the following: a) Who is the customer?b) What is the organization's value proposition?c) What do customers expect from the organization?

Customer

Considers objectives related to the performance of primary value chain functions.

Key processes are identified. The organization must focus on such processes to create value for its customers.

Internal processes

Comprises objectives related to competency development, work environment, technology infrastructure, etc.

This perspective is fundamental to BSC. The objectives in this perspective drive the other three perspectives.

Learning and Growth

Encompasses objectives ralated to profitability, productivity, stock pricing, etc.

The measures in this perspective indicate whether the strategy is producing tangible results ($).

Finance

04

06

05

07

02

03

Step 7

Stay on track

Step 6

Travel

Step 5

Plan time and resources

Why should BSCs be used?

The processes of developing a BSC and planning a trip to a particular destination share some similarities...

01

Step 4

Map the route

Step 1

Select a destination

Step 2

Agree on the type of trip

Step 3

Agree on the route

Tabla tomada de (3)

The BSC process

Activity 5

Activity 4

Activity 3

Activity 2

Initial BSC

Activity 1

Activities down the road

OBJECTIVES

Figure - BSC's elements

PERSPECTIVE

INITIATIVES

INDICATORS AND GOALS

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step 1

For each perspective you must define...

Initiatives (programs, projects, actions)

For each indicator set short and long term goals

For each objective one (or more) performance indicators

Strategic objectives

Example

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Beneficios

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Ayuda a entender cómo ejecutar una estrategia.

Ejemplos

Objetivos

Facilitar la administración estratégica

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Definición

"Es parte de un sistema que permite traducir la estrategia en acción" (3).

"Lo escencial de la estrategia es identificar qué no hacer" - Michael Porter

Balanced Scorecard

Strategy Maps

What is a strategy map?

Ref (3); pg. 5

• Companies find difficult to connect strategies and objectives in the 4 perspectives.

• 2000 - Kaplan and Norton publish the article "Having Trouble with your Strategy? Then Map It"
• The combination of BSC and strategy maps are fundamental to strategic management.

Background

A visual tool that illustrates a company's objectives and the relationships between them. It's a key component of the balanced scorecard methodology and can help organizations:

• Communicate their vision
• Understand cause and effect
• Explore steps to achieve objectives
• Test hypotheses

Strategy Map

Ref (4); pg. 102

• How many perspectives to include?

• Where to get the information from?

Developing a strategy map

Ref (4); pg. 106

• Human resources
• Core values
• Benchmarks

Learning and Growth

• Operation reports
• Benchmarks
• Consultancy services

Internal processes

• Sales/ Marketing
• Consultancy services
• Performance reports

Customer

• Annual report
• Performance reports
• Benchmarks

Finance

VisionMission Strategy

Ref (4); pg. 139

• Is a visual representation, in one page, of what must be done in each of the 4 perspectives to effectively execute a strategy.
• It comprises clearly stated objectives (starting with verbs).
• Provides clarity and is a powerful communication tool which identifies objectives to succed.

Do not forget it, a strategy map...

• Increase on-line consultancy services
• Keep staff motivated
• Increase the number of operations
• Improve price competitiveness
• Train employees in office management software
• Ensure customer satisfaction
• Keep technology updated
• Improve customer support
• Maximize company's value
• Reduce costs and improve operational efficiency
• Increase sales
• Optimize service processes
• Improve work environment

Develop the strategy map for a notary's office. Some relevant objectives below:

Collaborative practice

Activity 5

Activity 4

Activity 3

Strategy Map

Activity 2

Initial BSC

Activity 1

Activities down the road

Beneficios

Ejemplos

Objetivos

Definición

Mapas estratégicos

How can we know the objectives in the strategy map are beign achieved?

Key Performance Indicators (KPI)

“What is not defined cannot be measured. What is not measured, cannot be improved. What is not improved, is always degraded”.William Thomson Kelvin

KPIs

Explain this using the ASP model

Why are indicators needed?

Control

Execution

Planning

Indicators

Metric

"A KPI is a metric but a metric is not necessarily a KPI" (2).

Indicators vs metrics

Indicators vs Metrics

Metrics provide specific, quantifiable measurements that can be directly calculated and analyzed, often focusing on performance in concrete terms. Indicators offer insights into trends, performance, and relationships, often derived from qualitative data or calculations that represent broader organizational health. They serve to inform strategic decisions rather than serve as standalone quantitative measures.

Performance indicators are data and calculations that measure the activities, behaviors, and performance of a business, organization, or product. They can be used to track progress towards business goals.

What is a Performance Indicator?

• Validity: the indicator must show the actual behavior of the measured variable.
• Stability: the indicator must be defined, calculated and interpreted always in the same way (comparissons and trends).
• Simple interpretation.
• Show trends along time.
• Sensitive to changes.
• Easy to gather and process data.
• Quick to update.

Some characteristics of KPIs

Functions...

When compared to goals and benchmarks, existing gaps signal opportunities.

Improvement

Communicate organizational priorities. Indicators must drive strategy aligned behaviors.

Communication

Allow the identification and control of organizational resources.

Control

Un indicador retrasado (lagging) mide el resultado del desempeño al final de un periodo, tiene una orientación hacia el pasado porque nos muestra las consecuencias de lo que ya se hizo. Un indicador adelantado (leading) mide el desempeño de los factores que son críticos ahora, para obtener un resultado deseado en el futuro

Empezar con analogía de bostezos y preguntas durante clase. Ref (4) pg. 144

¿Líder o seguidor?

Usar analogía de preguntas y bostezos (leading) y ECOAS (lagging)

Un indicador retrasado (lagging) mide el resultado del desempeño al final de un periodo, tiene una orientación hacia el pasado porque nos muestra las consecuencias de lo que ya se hizo. Un indicador adelantado (leading) mide el desempeño de los factores que son críticos ahora, para obtener un resultado deseado en el futuro

¿Líder o seguidor?

Source: https://dictionary.cambridge.org/us/dictionary/english/

A lagging indicator is a measure that relates to events or developments in the past, not to changes that have taken place since those events or developments. A leading indicator shows what a situation will be like in the future rather than showing what it is like now or has been like in previous weeks, months, etc.

Leading or lagging?

Tabla tomada de (4).

Leading or lagging?

Group activity

Desempeño del proceso de recaudación de fondos de una asociación de apoyo a niños en situación de calle

Rentabilidad del negocio para una empresa mediana mayorista de abarrotes

Nivel de servicio al cliente de una empresa que fabrica envases de plástico y entrega regionalmente

Rotación anual de personal en una empresa de manufactura

Productividad mensual de una línea de producción de muebles

Para los siguientes conceptos sugiere al menos un indicador cuantitativo adelantado (leading) y un indicador de resultados (lagging):

• Strategy map

How to define/identify indicators?

• Clarify the meaning of indicators.
• Enables communication between creators and users.
• Serves as a future reference.
• Becomes the main input for those designing organizational dashboards.

Documentation

https://www.lean.org/the-lean-post/articles/the-value-of-key-performance-indicators-in-a-lean-transformation/

Targets

Iniciar esta sesión con analogía sobre deportes sin target, futbol sin portería, basketball sin canasta, golf sin hoyos ni banderas. Ref (4) pag 180

Types of targets

• Annual
• Early warning

Short term

• 3 to five years

Medium term

• 10 to 30 years
• Make a destination posible

Long term

Activity 5

Indicators and Targets

Activities down the road

Activity 4

Activity 3

Strategy Map

Activity 2

Initial BSC

Activity 1

Initiatives

"Initiatives are programs, activities or projects that will take place to meet the targets" (4).

What are they?

Examples

What's next?

What's next?

Personal BSC

Activity 5

Indicators and Targets

Activities down the road

Activity 4

Activity 3

Strategy Map

Activity 2

Initial BSC

Activity 1

Funciones

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Control, comunicación y mejora.

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Características

Válido, sensible y simple

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Tipos

Leading vs Lagging

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Definición

"Métrica que mide una actividad de negocio contra una meta" (1).

Generalmente conocidos como indicadores claves del desempeño o KPIs

Indicadores

"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat" . - Sun Tzu

Dashboards

Herramientas

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Diseño

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Tipos

Estratégicos, tácticos y operacionales.

Definición

Dashboards

"Just as race car drivers rely on dashboards to do their job, managers are increasingly dependent on dashboards to operate their organizations." (2).

Dashboards

Design clues

Taken from (3)

Scorecards vs Dashboards

Dasboard Evolution

Taken from (2).

Dashboard content by hierarchical level

Taken from (2).

Taken from (2).

Analysis time across management levels

Metrics by business unit and dashboard category

Taken from (2).

Tomado de (2).

Common Visualisation Elements

Enfatiza la magnitud del cambio a lo largo del tiempo, enfoca la atención en tendencias.

Gráfica de área

Para comparación de categorias o para hacer generalizaciones rápidas de los datos.

Gráfica de barras

Se usan para representar la reducción progresiva en los datos, tal como las etapas en un proceso de ventas.

Gráfica de embudo

Adecuada para representar cambios a lo largo del tiempo.

Gráfica de líneas

Efectiva para mostrar la contribución de segmentos como porcentaje de un todo.

Gráfica de pay

Se usa para identificar la relación entre dos variables.

Gráfica de correlación

Dashboard

Actividad 5

Balances Scorecard final

Indicadores y metas

Actividades

Actividad 4

Actividad 3

Mapa estratégico

Actividad 2

Balances Scorecard inicial

Actividad 1

4. Paul R. Niven. (2006). Balanced Scorecard Step-by-Step : Maximizing Performance and Maintaining Results: Vol. 2nd ed. Wiley.

3. Ron Person. (2009). Balanced Scorecards and Operational Dashboards with Microsoft Excel. Wiley.

2. Nils H. Rasmussen, Manish Bansal, & Claire Y. Chen. (2009). Business Dashboards : A Visual Catalog for Design and Deployment. Wiley.

1. Eckerson, W. W. (2010). Performance dashboards : Measuring, monitoring, and managing your business. ProQuest Ebook Central https://ebookcentral.proquest.com

Referencias

01 Anexos