Scorecard and Kpis

8/19/2019 Scorecard and Kpis

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SCORECARD AND

KPIS 101Based on

www.bscdesigner.com/scorecard-and-kpis-101.htm

By Aleksey Savkin, bscdesigner.com

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#%& A'' !#D!(A&%$S A$)*!S

• !t doesn+t make sense to callsomething )*! ntil a bsinesscontet is dened.

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#%& A'' !#D!(A&%$S A$)*!S


• Bt !+ll be sing the )*! term as it ismore poplaried.

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#%& A'' !#D!(A&%$S A$)*!S


• Bt !+ll be sing the )*! term as it ismore poplaried.

• &hese aspects were discssedbe2ore3 in the gide 2rom4antication to a metric

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56A& *$%B'7S A$ )*!S A#D AS(%$(A$D S8**%SD &% S%'9:

• !ndicators are nmerical vales that

are linked to some kind o2 process.

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• !ndicators are nmerical vales that

are linked to some kind o2 process.• &heir primary goal is to show a

nmber that can give s an idea

abot the crrent per2ormance.

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%# !#D!(A&%$ '9'<

• Show the crrent vale.

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%# !#D!(A&%$ '9'<

• Show the crrent vale.• !ntrodce the per2ormance 2nction

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%# !#D!(A&%$ '9'<

• Show the crrent vale.• !ntrodce the per2ormance 2nction

• !nterpret the vale o2 an indicator on

a baseline/target scale.

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%# S(%$(A$D '9'<

• "rop indicators into categories.

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%# S(%$(A$D '9'<

• "rop indicators into categories.• Speci2y the relevant importance.

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%# S(%$(A$D '9'<


• (alclate the per2ormance o2

category.

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%# S(%$(A$D '9'<


• (alclate the per2ormance o2

category.• (alclate the total per2ormance.

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!#D!(A&%$ '9'



&6 9A'8 %= A#!#D!(A&%$

>?0 @

0 hors/week

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&6 9A'8 %= A#!#D!(A&%$

>?0 @

0 hors/week

#meric vale

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&6 9A'8 %= A#!#D!(A&%$

>?0 @

0 hors/week

#meric vale 7easre nit

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&6 $%' %= &6 *$=%$7A#(

=8#(&!%#

•

5hat the vale >?0@ means:

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&6 $%' %= &6 *$=%$7A#(

=8#(&!%#

•

5hat the vale >?0@ means:

• !s it a high or low:

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&6 $%' %= &6 *$=%$7A#(

=8#(&!%#

•

5e need a measrement scale

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9A'8

&!7


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9A'8

&!7

7a7a C means the maimalpossible vale o2 an indicator


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9A'8

&!7

7a7a C means the maimalpossible vale o2 an indicator

7in7in C means the minimal possiblevale o2 an indicator


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9A'8

&!7

7a

7in


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&6 *$=%$7A#( %= A#!#D!(A&%$ (A# B (A'(8'A&D AS

*er2ormance 9aleE, F G 100F

9ale C 7inE

7a C 7inE

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!n or eample<

9ale G >?0

7in G 0

7a G H00

&6 *$=%$7A#( %= A#!#D!(A&%$ (A# B (A'(8'A&D AS

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&6 *$=%$7A#( %= A#!#D!(A&%$ (A# B (A'(8'A&D AS


G IIF

>?0C 0E

H00 C 0E

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&he per2ormance 2nction o2 )*!

Sorce<

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*er2ormance 9aleE, F G 9aleC 7inE / 7a C 7inEE J 100F

5ith a linear growth o2 thevale the per2ormance will alsogrow linearly



&6 *$=%$7A#( =8#(&!%# !S#%& A'5AKS '!#A$

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&6 *$=%$7A#( =8#(&!%# !S#%& A'5AKS '!#A$

•

=or eample, the per2ormance mightgrow very slowly in the beginning, btthen increase rapidly

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Sorce<

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*er2ormance 9aleE, F G*ower9ale,10E / *ower7a, 10E

&he per2ormance might grow very slowly inthe beginning, bt then increase rapidly.




*ower 9ale,10E

*ower 7a,10E

&6 *$=%$7A#(

=8#(&!%# !S #%& A'5AKS'!#A$

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5!&6 &6 !#($AS %= &6

9A'8 &6 *$=%$7A#(7!"6& B D($AS!#"

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5!&6 &6 !#($AS %= &6

9A'8 &6 *$=%$7A#(7!"6& B D($AS!#"

• =or eample, the more waiting timethere is in the spport center, the lower is its per2ormance.

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&h 2 2 ti 2 )*!




Sorce<

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*er2ormance 9aleE, F G 7a C9aleE / 7a C 7inEE J 100F

5ith the increase o2 the vale theper2ormance might be decreasing as well.




7a C 9aleE

7a C 7inE

5!&6 &6 !#($AS %= &6

9A'8 &6 *$=%$7A#(7!"6& B D($AS!#"

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(A'(8'A&!#" &6 *$%"$SS

• Sometimes it is necessary to 2ocsattention on a very specic part o2the per2ormance interval.

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9A'8

&!7

7a

7in

(A'(8'A&!#" &6 *$%"$SS

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9A'8

&!7

7a

7in

(A'(8'A&!#" &6 *$%"$SS

*lanning horion

6istorical

valesBSC



9A'8

&!7

7a

7in

(A'(8'A&!#" &6 *$%"$SS

*lanning horion

6istorical

vales

Baseline

&arget

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9A'8

&!7

7a

7in

(A'(8'A&!#" &6 *$%"$SS

*lanning horion

6istorical

vales

Baseline

&arget

7in and 7a aresed to calclate the

per2ormance o2 the )*!.

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9A'8

&!7

7a

7in

(A'(8'A&!#" &6 *$%"$SS

*lanning horion

6istorical

vales

Baseline

&arget

7in and 7a aresed to calclate the

per2ormance o2 the )*!.

&he per2ormance answers the 4estion<5hat is the overall

per2ormance o2 the)*!:

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9A'8

&!7

7a

7in

(A'(8'A&!#" &6 *$%"$SS

*lanning horion

6istorical

vales

Baseline

&arget

Baseline and &argetare sed to calclatethe progress.

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9A'8

&!7

7a

7in

(A'(8'A&!#" &6 *$%"$SS

*lanning horion

6istorical

vales

Baseline

&arget

Baseline and &argetare sed to calclatethe progress.

&he progress answersthe 4estion< &o what

etent was the targetachieved:

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&6!S 7!"6& S%8#D A '!&&' B!&(%7*'!(A&D &% D%3

• &his might sond a little bitcomplicated to do i2 yo se 7S

cel or similar so2tware

• A pro2essional scorecard so2tware,like BS( Designerwill atomate these tasks 2or yo.

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S(%$(A$D '9'



&6 $'9A#& !7*%$&A#( %=

)*!S

A spport center has two )*!s<

– Average email response time, hors

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&6 $'9A#& !7*%$&A#( %=

)*!S



– =irst contact resoltion rate, F

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&6 $'9A#& !7*%$&A#( %=

)*!S




5hat )*! is moreimportant:

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% ( %



&6 $'9A#& !7*%$&A#( %=

)*!S

• A company can make Average emailresponse time e4al to 10 mintes,

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&6 $'9A#& !7*%$&A#( %=



&6 $'9A#& !7*%$&A#( %=

)*!S


• Bt this will not make cstomers

happy, as the =irst contactresoltion rate will be very low.

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&6 $'9A#& !7*%$&A#( %=



&6 $'9A#& !7*%$&A#( %=

)*!S


• Bt this will not make cstomers

happy, as the =irst contactresoltion rate will be very low.

• "ood response time is important, bt

what is more important is the high4ality o2 the answers.

&6 $'9A#& !7*%$&A#( %=



&6 $'9A#& !7*%$&A#( %=

)*!S

• &o reLect this idea we need aconcept o2 “weight ” <



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&6 $'9A#& !7*%$&A#( %=



&6 $'9A#& !7*%$&A#( %=

)*!S

• &o reLect this idea we need aconcept o2 “weight ” <

– Average email response time, horsMweight G N

– =irst contact resoltion rate, FM weight

G H

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&6 $'9A#& !7*%$&A#( %=



&6 $'9A#& !7*%$&A#( %=

)*!S

• &o reLect this idea we need a concepto2 “weight ” <

– Average email response time, horsMweight G N

– =irst contact resoltion rate, FM weight GH

#ow we know that =irst contact resoltionrate is more important than Average

email response time. BSC

(A'(8'A&!#" &6 &%&A'



(A'(8'A&!#" &6 &%&A'

*$=%$7A#(

• &he per2ormance o2 a category canbe calclated by taking in accontthe per2ormance vales o2 eachindicator and their weights.

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(A'(8'A&!#" &6 &%&A'



(A'(8'A&!#" &6 &%&A'

*$=%$7A#(

• 6ere we have the strctre o2 thescorecard (1..N C are categories.7etric-i,O are indicators together with

their weight and per2ormance vales<

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(A'(8'A&!#" &6 &%&A'



(A'(8'A&!#" &6 &%&A'

*$=%$7A#(

• 'et+s convert this into a diPerentnotation<

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(A'(8'A&!#" &6 &%&A'



(A'(8'A&!#" &6 &%&A'

*$=%$7A#(

• 5e had or weight on a scale 1..10,so be2ore moving ahead we need tocalclate a normalied weight<

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(A'(8'A&!#" &6 &%&A'



(A'(8'A&!#" &6 &%&A'

*$=%$7A#(

• &he total per2ormance vale 2or the selectedcategory is be calclated as<

5here<

– #i is the nmber o2 metrics on i-levelM

– #5i,O C is a normalied weight o2 O-metric on i-levelM

– #Si,O C is a per2ormance o2 O-metric on i-level.

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(A'(8'A&!#" &6 &%&A'



(A'(8'A&!#" &6 &%&A'

*$=%$7A#(

• &he nal 2ormla 2or the totalper2ormance inde o2 the scorecardwill be<

5here 7 is a nmber o2 categories.

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(A'(8'A&!#" &6 &%&A'



(A'(8'A&!#" &6 &%&A'

*$=%$7A#(

• &hese calclations are simple i2 yodon+t have sbcategories in yorscorecard.

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(A'(8'A&!#" &6 &%&A'



(A'(8'A&!#" &6 &%&A'

*$=%$7A#(

• &hese calclations are simple i2 yodon+t have sbcategories in yorscorecard.

• !2 yo had sbcategories, the weight o2 these sbcategories shold betaken into accont in a similar way.

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(A'(8'A&!#" &6 &%&A'



(A'(8'A&!#" &6 &%&A'

*$=%$7A#(

• &hese calclations are simple i2 yo don+thave sbcategories in yor scorecard.

• !2 yo had sbcategories, the weight o2

these sbcategories shold be taken intoaccont in a similar way.

• *ro2essional scorecard so2tware like BS(Designer will atomate these calclationsso that yo can 2ocs on the bsinessside.

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(A'(8'A&!#" &6 &%&A'



(A'(8'A&!#" &6 &%&A'

*$=%$7A#(

• *ro2essional scorecard so2tware like BS(Designer will atomate these calclationsso that yo can 2ocs on the bsiness side.



7%$ AB%8& &6 BA'A#(D S(%$(A$D

=ind more insight2larticles abot theBalanced Scorecardin Articles section atwww.bscdesigner.com

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&6A#) K%8

=eel 2ree to send s yor 4estions sing thecontact 2orm at www.bscdesigner.com

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Scorecard and Kpis