Key Performance Indicator
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 1
KPI Dashboard and Measurement
Key Performance Indicators (KPI) Financial and non-financial metrics used to quantify objectives to reflect strategic performance of an organization KPIs are used in Business Intelligence to assess the present state of the business and to prescribe a course of action. The act of monitoring KPIs in real-time is known as business activity monitoring. KPIs are frequently used to "value" difficult to measure activities such as the benefits of leadership development, engagement, service, and satisfaction. KPIs are typically tied to an organization's strategy (as exemplified through techniques such as the Balanced Scorecard). The KPIs differ depending on the nature of the organization and the organization's strategy.
They help an organization to measure progress towards their organizational goals, especially toward difficult to quantify knowledge-based processes. © Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 2
KPI is a key part of a measurable objective
Identifying indicators It is necessary for an organization to at least identify its KPI's. The key environment for identifying KPI's are: Having a pre-defined business process. Having clear goals/performance requirements for the business processes. Having a quantitative/qualitative measurement of the results and comparison with set goals. Investigating variances and tweaking processes or resources to achieve short-term goals.
When identifying KPI's the acronym SMART is often applied. KPI's need to be:
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 3
Areas to be analyzed
Customer related numbers:
1.
Turnover generated by segments of the customers - these could be demographic filters.
2.
Outstanding balances held by segments of customers and terms of payment these could be demographic filters.
3.
Collection of bad debts within customer relationships.
4.
Demographic analysis of individuals (potential customers) applying to become customers, and the levels of approval, rejections and pending numbers.
5.
Delinquency analysis of customers behind on payments.
6.
Profitability of customers by demographic segments and segmentation of customers by profitability.
New customers acquired Status of existing customers Customer attrition
Many of these aforementioned customer KPIs are developed and improved with customer relationship management. This is more an inclusive list than an exclusive one. The above more or less describe what a bank would do, but could also refer to a telephone company or similar service sector company. What is important is: Customer KPI-related data which is consistent and correct. Timely availability of KPI related Data.
Faster availability of data is beginning to become a concern for more and more organizations.
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 4
Categorization of indicators
Key Performance Indicators define a set of values used to measure against.
These raw sets to summarize information against are called indicators.
Indicators identifiable as candidates for KPIs can be summarized into sub-categories: Quantitative indicators which can be presented as a number. Practical indicators that interface with existing company processes. Directional indicators specifying whether an organization is getting better or not. Actionable indicators are sufficiently in an organization's control to effect change.
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 5
Issues
In reality organizations and businesses often when looking for Key Performance Indicators discover that they cannot get the performance indicators that they would like to get.
Often they are stuck with various non-key indicators.
These are used as if they were Key Performance Indicators and often called KPI's since something is better than nothing.
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 6
Key Performance Measurement “Another way”
Key Performance Measurement is an effective management tool because it provides the information decision makers require to accurately monitor key issues related to company and organizational goals, progress and quality at both the executive and project levels and performance against a plan.
Measurement also provides data that managers need to ask the right questions -- and make the right decisions based on objective information.
Measurement provides progress assessment and data for objective decision making. We provide measurement views and tools but the key to success is not to implement all the measurements. Rather, assess your work and dealers, identify your stakeholders' needs, identify measures and indicators to ensure that you satisfy those needs. Therefore we structured the key drivers of the retail business and their performance measurement in a “Another way” approach: © Copyright 2006 MSX International. All rights reserved.
MSX Performance Measurement System Tools Soft:
CSI-Customer Satisfaction Survey
PSI-Index Prospect Survey (Shopping+Calling+eMail)
DSI-Dealer Satisfaction Survey
ESI-Employee Satisfaction Survey
Hard:
Turn Over - MSX Qualified Dealer Composite
ROI, Viability - Balance Sheet – EBIT
GMROI- MSX Qualified Dealer Composite
MSX Dealer Development
2007
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Employees key to customer satisfaction It’s a People Business
In Times they are a changing as organisations who are working to increase levels of customer satisfaction are refocusing investment in their employees, rather than in new technology.
In Recruitment, training, development and binding of human resources are decisive factors for securing competitive advantages by generating sustainable customer satisfaction. This is the vital Key Perfermance Indicator (CSI) wich is often underastimated. Within our studies we could show the dircect coralation from CSI to ROI and Growth.
Systematic and strategic development of human resources and the associated increase and retention of knowledge is the basis for long-term success. Because knowledge brings ideas and ideas bring success. And the ideas in a company can come only from its people. Investing in people is the opportunity to boost bottom-line profitability at the Retail business:
Employee Satisfaction
Dealer Satisfaction
© Copyright 2006 MSX International. All rights reserved.
Customer Satisfaction
MSX Dealer Development
ROI, Brand Image, Market Share
2007
Page 8
Customer Satisfaction and Customer Retention
The success of any company can ultimately be measured by its success among its customers.
We identify for our clients the needs and expectations of their customers. Using these results, we then create an active customer satisfaction management program for increasing customer satisfaction and sustainable customer loyalty.
Based on our Dbit- CSI (Dealer Business Improvement, customer Satisfaction and Retention Tools) method, we develop a conclusive and scalable integrated system. In addition to surveys and analyses, Dbit includes convincing data interpretation, training of our client personnel, and additional support in the form of coaching our clients in the identification, development, planning and implementation of further action.
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 9
Customer Satisfaction and Customer Retention
We set up a complaint management program for OEM, NSC and Importers, creating a system that gathers and classifies complaints from all channels of communication and forwards them to the appropriate staff member for action.
Once these conditions have been met, we build up a comprehensive customer relationship management (CRM) program. In this program all customer data are interlinked and transferred to a uniform database.
Active dialog with the customer can now commence: your marketing and sales goals can be targeted according to precisely-defined profiles and then systematically tracked to monitor success.
Lasting customer loyalty is fostered by a company’s own uncompromising quality standards. The monitoring of customer-relevant quality standards opens perspectives for offering service guarantees and service commitments that are important for the customer.
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 10
Performance Measurement Matrix Launch
Face to Face ROI
CSI
Manufacturer
DSI
Importer/ NSC Dealer Development Program
Retail Management
Coaching
Management Tool
Verify data.
Appraisals on dealership basis.
Retail Staff E-Learning
MSX Performance Measurement Matrix Soft:
CSI-Customer Satisfaction Survey
PSI-Index Prospect Survey (Shopping+Calling+eMail)
Results from surveys.
DSI-Dealer Satisfaction Survey
Consultant’s benchmark
ESI-Employee Satisfaction Survey
Quality assessment
Hard:
Turn Over - MSX Qualified Dealer Composite
User administration
ROI, Viability - Balance Sheet – EBIT
Hosting
GMROI- MSX Qualified Dealer Composite
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 11
Key Performance Measurement “Another way”
The MSX Perfermance Measurment systematic includes methodologies for defining strategy, objectives and goals and developing metrics to measure execution against the strategy. The MSX “Another Way” approach is based on the idea that to understand performance, dealer networks need a balanced model that encompasses a range of key internal and external indicators, as well as the related performance drivers and outcome metrics that describe the cause-and-effect relationships behind the strategy. It gives a “balanced” view of performance against plan by offering a balance between short- and long-term objectives, desired outcomes and performance drivers, and “hard” and “soft” objective measures.
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 12
Key Performance Measurement Virtual Dealership A simple and effective integrated, performance management system, specifically designed for aligning dealership teams to drive better results.
Virtual Dealership
CONTENT
Guides, tools, templates, manuals, business plan kit and dealership score charts Real-time Performance measurement Access to all important dealer information at any time Centralised data management High level of project transparency Interactive multilingual web-based tool
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 13
Dealer Network Fitness Value
The MSX Dealernetwork Fitness value is clearly not just about software: Consensus-building on critical success factors (Cross-Impact Analysis) Visualization of the strategy through Cause & Effect/Strategy Maps Focalization on key objectives, targets, projects and initiatives Reporting and controlling of performance versus targets Continuous strategic review, simulation and feedback
This high level of functionality and flexibility within a 'ready-for-use' application permits the rapid implementation of a personalized system. Indeed, the majority of functions traditionally considered 'custom features' by clients are already included as a standard in the MSX Dbit Web application © Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 14
Dealer Network Fitness Value An evaluation of the dealer network to assess overall competitive fitness and diagnose performance obstacles in the network and dealership environment.
Network Fitness Value
SWOT Analysis across the network Network Heat map On-Time Performance reporting Market Benchmark study Key critical constraints hindering performance Performance Development Plan Pan-European level Country Level Regional Level Dealer Level © Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 15
Key Performance Measurement “Another way” The Tool
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 16
Key Performance Measurement “Another way” The Tool
DEALER BUSINESS IMPROVEMENT TOOL
Access to all important dealer information at any time
Efficient reporting
Centralised data management
Sustainable project development
High level of project transparency
System architecture based on modules ensuring further development
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 17
Key Performance Measurement “Another way” The Tool
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 18
Key Perfermance Indicatores More than just numbers
Figures, but also offer our clients customized market research solutions, providing a sound basis for decision making and for achieving company objectives. Market research with the cutting-edge solutions. The result is optimum interpretation and maximum usefulness of the generated data. MSX support their clients where it counts. To do so we offer a wide range of services that extend from developing intelligent and promising concepts based on market research results, to successfully implementing these concepts, and monitoring and evaluating their success. We provide our clients not only with data but also with the support of an assigned team of highly motivated staff from the beginning of the project up to interpretation and implementation of the results. Our focus throughout is on customer satisfaction, our personal benchmark for success is the overwhelmingly satisfied customer.
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 19
Key Perfermance Indicatores More than just numbers
At MSX, we find the answers to the questions that concern the complete automotive added value chain today:
Market Share and Units Customer Satisfaction and Customer Retention Sales and Service Performance Products and Brands Personnel Qualification and Motivation Dealer network viability
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 20
Key Perfermance Indicatores Market Share and Units
The Sales growth of a dealer network can ultimately be measured by its success among its customers.
Active dialog with the customer can now commence: dealer marketing and sales goals can be targeted according to precisely-defined profiles and then systematically tracked to monitor success.
Lasting customer loyalty is fostered by a manufacturer’s own uncompromising quality standards.
The monitoring of customer-relevant quality standards opens perspectives for offering service guarantees and service commitments that are important for the customer.
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 21
Key Perfermance Indicatores Market Share and Units
With our Dbit (Dealer Business Improvement Tool) system, we can determine during the implementation phase whether your customer-oriented processes are effective and efficient. To do so we compare the compiled actual key performance indicators with the targeted values.
We generally work with a Index Contact approach. This method is especially appropriate for the motor industry and distribution system. Throughout market Share and Sales Increase we proof on an ongoing base our implementation strategy. © Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 22
KPI Interpretation Transfer & Coaching
The data mining, we unearth previously undiscovered knowledge slumbering in diverse customer databases and archives.
Using conjoint analyses, for example, we help companies discover and evaluate relevant product characteristics before a product launch.
Using multivariate procedures and effectiveness analyses, we can show our clients which factors influence a particular research topic (for example customer satisfaction) and to what extent.
Drawing on segmentation procedures, we split results according to target groups.
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 23
KPI Interpretation Transfer & Coaching Scoring models are then very helpful in evaluating the results and converting them into detailed Sales and Marketing strategies.
Frequently, the results of a survey can be more than conclusive and yet nothing happens – often because resources and capacities are lacking.
Our trainers and coaches conduct workshops on side at the dealership and explain to your employees how the figures are to be interpreted. Together with our clients, our trainers and coaches develop action plans that enable you to control improvement measures by way of a results-oriented monitoring system.
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 24
The Life Cycle Approach to Managing for Results How do KPI fit into the Broader Results-based Dealer Development?
Learn & Adjust
Strategic Analysis
BaselineAnalysis of the current environment, past performance, emerging priorities and key risks
Plan for Results
Articulating strategic outcomes and establishing targets and determining the best way of achieving results
© Copyright 2006 MSX International. All rights reserved.
Implement
Putting plans into practice to achieve results Delivering results
MSX Dealer Development
Monitor, Measure, Evaluate Ongoing performance measurement and periodic evaluation to determine progress and allow for corrective action
Report on Results Providing accountability and the information needed to make future choices
2007
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Example MSX Sales Accelerator
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
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Example MSX Sales Accelerator
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 27
Example MSX Sales Accelerator
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 28
Example MSX Sales Accelerator
The MSX specialists coach dealer sales representatives into sustainable sales improvement and help develop the individual’s selling skills. Specific coaching and training is provided in areas such as: Management skills (e.g. controlling and motivating a sales team, financial aspects – Profit & Loss and Key Performance Indicators) Sales representative selling skills Dealership Sales and marketing
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
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Increase Efficiency Reduce Costs
Maximize Revenue Increase Market Impact
Establish Differentiation
Enhance Quality
© Copyright 2006 MSX International. All rights reserved.
MSX Dealer Development
2007
Page 30