1. Get the power of detail! www.performancemanagement.ro Performance Measures for Strategic Advantage Conference - 9 June 2005 The use of measures Marcel Chiranov mc@performancemanagement.ro

2. Get the power of detail! www.performancemanagement.ro 1. The program 95 sites in Romania Implementing activities from a basket of 27 194 independent projects Budget: $36 millions

3. Get the power of detail! www.performancemanagement.ro Challenges Staff coming from: business, government agencies, NGOs Staff with very broad experiences, background and expectations High anxiety to start Lack of realistic planning Work plan with a lot of weak points

4. Get the power of detail! www.performancemanagement.ro

5. Get the power of detail! www.performancemanagement.ro Main criteria in selecting processes’ measures Validity - clearly and directly measure what is intended Reliability - get same results in different place, at different time by different people Timeliness –sufficiently current and available Integrity - free of any political or personal influence Precision - acceptable margin of error

6. Get the power of detail! www.performancemanagement.ro

7. Get the power of detail! www.performancemanagement.ro Results of processes – strategy alignment Processes focused on Strategic Objectives Direct relationship between Program Indicators (lead and lag indicators) and Strategic Indicators The measures are focused on the right processes Eliminate processes overlapping

8. Get the power of detail! www.performancemanagement.ro 4. Getting the simple tools into place Objectives: 1.Define easy to use tools, relevant for the process 2.Make people comfortable in using the tools 3.Introduce MEASURES like a daily management tool

9. Get the power of detail! www.performancemanagement.ro Tools used to measure processes’ implementation 1. Nation wide survey – 15 questions, implemented yearly 2. Activity specific tools a. Questionnaires to be filled by staff working on projects - collected quarterly b. Forms to collect data from field sources (e.g. yearly expenditure reports, activity reports) - collected yearly

10. Get the power of detail! www.performancemanagement.ro Creating the measurement tools

11. Get the power of detail! www.performancemanagement.ro How to do this? Team work approach Results oriented Lot of negotiation, communication and “fine tuning” Consider present business conditions, include the future ones Be flexible Look for small details Never forget the big picture

12. Get the power of detail! www.performancemanagement.ro Benefits of involving staff in adjusting measurement tools Create ownership for measurement tools Help staff be comfortable with performance measurement Use measurement tools that fit the activity needs Prepare next step: incorporate performance measurement in daily operations

13. Get the power of detail! www.performancemanagement.ro 5. Developing a strategy to drive enhanced results

14. Get the power of detail! www.performancemanagement.ro Processes’ cross cutting matrix Find business processes whose intermediate results/milestones can be used by other processes to build up results e.g. Customer Service Dept have info useful to develop new product/service Select lead indicators from cross cutting points (processes common points)

15. Get the power of detail! www.performancemanagement.ro

16. Get the power of detail! www.performancemanagement.ro Benefits of Performance Measurement Better control for objectives’ achievement Better planning and forecasting Empowered staff Improved company’s culture Satisfied customers Improved communication Easy to use tool for strategy adjustment

17. Get the power of detail! www.performancemanagement.ro Measurable benefits of Performance Measurement - Demonstrated Return on Investment of 4:1 - 19:1 - Earlier detection of software defects from 22% - 90% - Reduction in post-release defects from 39% - 84% - Reduction in schedule time from 19% - 23% - Reduction in projected schedule variancedown to 2% - Increased productivity (less rework) of 35% - 75% - Reduced sustenance costs by 30% - 55%

18. Get the power of detail! www.performancemanagement.ro 6. Measures review and process adjustment Why to do this? Business conditions changed over time Staff got a better understanding of “what” and “how” to do Present status requires process adjustments in order to reach targets Present status requires target adjustment

19. Get the power of detail! www.performancemanagement.ro

20. Get the power of detail! www.performancemanagement.ro Questions? Thank you! Marcel Chiranov mc@performancemanagement.ro