Analytical Performance Management

Stephen Batesseb@batescainelli.comhttp://www.linkedin.com/in/batessTwitter: @batess4 Aug 2010 #ignite LANDWARNET

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Competing on Analytics

“I Think” vs “I Know”

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How SMART Are You?

SpecificMeasurableAttainableRelevant

Timebound

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Industry vs Government

• 10k

• Business and Risk Factors

• Audited Financial Statements

• Management Discussion and Analysis

• Forward Looking Statements

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Regulatory Compliance

• CFO Act 1990

• GPRA 1993

• PAR– Audited Financial

Statements– Management

Discussion and Analysis

– Performance Measures

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Measure What Matters

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Financial and Non-Financial Measures

• Dollars spent

• Costs incurred

• ROI

• Payback

• Future Value

• Present Value

• Earned Value

• Documents/Reports

• Quality

• Timeliness

• Surveys

• Site visits

• Publications

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The Opportunity Cost of Reporting

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What kinds of data?

Time Series

Cross Sectional

B Company Qualification Scores over the last 5 years

All B Company Qualification Scores In The Division

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Performance Frameworks

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Linkages

• Harrah’s Entertainment found that for each 1% percent it grew its share of customer gaming budgets, its share price increased by $1.10

• Victoria’s Secret determined that by raising the conversion rate (where a customer enters a store and actually buys something) by 1 percent brought more than $35M in sales and and more than $15M in operating profit.

Davenport: The Rise of Analytical Performance Management

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Army Goals, Measures, and Targets

SustainPrepareReset

Transform

Army: FY11 Performance Budget Overview

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Goal: Transform LANDWARNET

• Measure: Transform the LandWarNet into a more effective, centralized, economically efficient, secure, operationalized, and sustainable network– Target: Complete fielding of regional hub

nodes– Target: Consolidate information technology

services into Area Processing Centers (APCs)– Target: Designate APCs in and outside the

continental United States– Target: Standardize network operations

command and control capabilitiesArmy: FY11 Performance Budget Overview

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Goal: Transform Army Business Process

• Measure: Implement the General Fund Enterprise Business System (GFEBS) to move the Army to a cost and performance management culture – Target: Implement GFEBS at 20 Army

organizations

• Measure: Number of trained Lean Six Sigma (LSS) personnel to review and improve business processes – Target: Train 60 Master Back Belts, 1,800

Black Belts, and 1,250 Green BeltsArmy: FY11 Performance Budget Overview

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Opinions are like …

Everyone is entitled to their own opinion, just not their own facts

Specific, Measurable, Attainable, Relevant, and Timebound performance measures can effectively change the conversation from

“I think” to “I know”

Linkages between financial and non-financial KPIs are incredibly powerful

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Thank You!!!seb@batescainelli.comTwitter: @batesshttp://www.linkedin.com/in/batess