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    Section-2 (Organizational Process Management and Measures) PDF

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    Eduardo Expósito Espinosa

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    Section-2 (Organizational Process Management and Measures) PDF

    Uploaded by

    Eduardo Expósito Espinosa
    42 views17 pages

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    Section-2 (Organizational Process Management and Measures).pdf

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    42 views17 pages

    Section-2 (Organizational Process Management and Measures) PDF

    Uploaded by

    Eduardo Expósito Espinosa

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 17

    Impact on Stakeholders

    Owner, Managers

    Suppliers, Customers
    Employees, Partners

    Local Community,
    Associations, Media

    Public
    Benchmarking
     The process of comparing

     one's business processes and performance


    metrics

    to

     industry bests and best practices from


    other companies.
    Benchmarking
     Process benchmarking
     Example: Delivery process, Billing process
     Performance benchmarking
     Features of products and services e.g.
    mileage, download speed
     Strategic benchmarking
     How companies compete
    Internal vs External Benchmarking
     Internal Benchmarking
     Easy access to sensitive information
     Less time and resources required
     Limited gain because internal benchmark
    might not be the best in class.

     External Benchmarking
     Just the revise of internal benchmarking
    Benchmarking Process
     What function to benchmark (D)
     What is the current performance level
    (M)
     Select the Best-in-Class (M)
     Compare (A)
     Agree on actions to achieve or beat the
    Best-in-Class and Implement (I)
     Monitor (C )
     Re-do
    Benchmarking Challenges
     Management support
     Alignment with the strategy
     Lack of Resources
     Right team
     A suitable and willing partner
     Willingness to change
    Performance Measures
     Metrics to measure performance
     Commonly used performance measures
    for outsiders are financial
     Internal metrics include performance
    levels
     Process yield
     Defect rate
     Average time to answer a call
     Schedule
    Balanced Scorecard
     By Robert S.Kaplan and David P. Norton
     Four perspectives
     Financial
     Customer
     Internal Business Processes
     Learning and Growth
    Balanced Scorecard

    ## ##

    Financial Customer

    ## ##

    Internal Processes Learning/Growth


    Leading vs Lagging Indicators
     Lagging are easy to measure
     Lagging are post event (output)
     Leading are predictive measures (inputs)
     Leading indicators are not guaranteed
    and are the difficult to decide, which
    one to select.
     Mix of both leading and lagging is good.
    Common Financial Measures
     Return on Investment
     Payback Period
     Net Present Value
     Internal Rate of Return
     Benefit/Cost Ratio
    Return on Investment
    $2,000

    Year 01 Year 02 Year 03 Year 04 Year 05

    $1,000 $1,000 $1,000 $1,000 $1,000

    Return on investment =

    Income x 100%
    Cost
    Payback Period
    $2,000

    Year 01 Year 02 Year 03 Year 04 Year 05

    $1,000 $1,000 $1,000 $1,000 $1,000

    Time to recover the investment


    Net Present Value
    $2,000

    Year 01 Year 02 Year 03 Year 04 Year 05

    $1,000 $1,000 $1,000 $1,000 $1,000

    Cost of Capital = 10%


    Net Present Value
    $2,000

    Year 01 Year 02 Year 03 Year 04 Year 05

    $2,500

    Cost of Capital = 10%


    Internal Rate of Return
    $2,000

    Year 01 Year 02 Year 03 Year 04 Year 05

    $2,500

    Cost of Capital = 10%


    Benefit/Cost Ratio
    $2,000

    Year 01 Year 02 Year 03 Year 04 Year 05

    $1,000 $1,000 $1,000 $1,000 $1,000

    Cost of Capital = 10%

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