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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:

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Areas to be analyzed

Customer related numbers: 1. Turnover generated by segments of the


customers - these could be demographic
New customers acquired filters.
2. Outstanding balances held by segments
Status of existing customers of customers and terms of payment -
Customer attrition these could be demographic filters.
3. Collection of bad debts within customer
relationships.
Many of these aforementioned customer KPIs are developed and 4. Demographic analysis of individuals
improved with customer relationship management. (potential customers) applying to become
This is more an inclusive list than an exclusive one. The above customers, and the levels of approval,
rejections and pending numbers.
more or less describe what a bank would do, but could also refer to
a telephone company or similar service sector company. 5. Delinquency analysis of customers behind
What is important is: on payments.
6. Profitability of customers by demographic
Customer KPI-related data which is consistent and correct. segments and segmentation of customers
by profitability.
Timely availability of KPI related Data.

Faster availability of data is beginning to become a concern for more and more organizations.

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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 MSX Performance Measurement System Tools
key to success is not to implement all the Soft:
measurements.  CSI-Customer Satisfaction Survey
Rather, assess your work and dealers, identify your  PSI-Index Prospect Survey (Shopping+Calling+eMail)
stakeholders' needs, identify measures and  DSI-Dealer Satisfaction Survey
indicators to ensure that you satisfy those needs.  ESI-Employee Satisfaction Survey
Hard:
Therefore we structured the key drivers of the retail  Turn Over - MSX Qualified Dealer Composite
business and their performance measurement in a  ROI, Viability - Balance Sheet – EBIT
 GMROI- MSX Qualified Dealer Composite
“Another way”
approach:
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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 Customer Satisfaction ROI, Brand Image, Market Share

© Copyright 2006 MSX International. All rights reserved. MSX Dealer Development 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.

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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 DSI Manufacturer

Importer/ NSC

Dealer Retail Management


Development
Program Retail Staff

Coaching E-Learning

Management Tool MSX Performance Measurement Matrix


 Verify data. Soft:
 CSI-Customer Satisfaction Survey
 Appraisals on dealership basis.
 PSI-Index Prospect Survey (Shopping+Calling+eMail)
 Results from surveys.  DSI-Dealer Satisfaction Survey

 Consultant’s benchmark  ESI-Employee Satisfaction Survey


Hard:
 Quality assessment
 Turn Over - MSX Qualified Dealer Composite
 User administration  ROI, Viability - Balance Sheet – EBIT
 GMROI- MSX Qualified Dealer Composite
 Hosting

© 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 Virtual Dealership


management system, specifically designed for
aligning dealership teams to drive better results.

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

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Dealer Network
Fitness Value

An evaluation of the dealer network to assess overall


competitive fitness and diagnose performance obstacles in Network Fitness Value
the network and dealership environment.

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

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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 Plan for Monitor, Report


Implement Measure, on
Analysis Results
Evaluate Results

Baseline- Articulating Putting plans into Ongoing Providing


Analysis of the strategic practice to achieve performance accountability
current outcomes and results measurement and the
environment, establishing and periodic information
Delivering results
past targets and evaluation to needed to
performance, determining determine make future
emerging the best way of progress and choices
priorities and achieving allow for
key risks results corrective
action

© Copyright 2006 MSX International. All rights reserved. MSX Dealer Development 2007 Page 25
Example
MSX Sales Accelerator

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Example
MSX Sales Accelerator

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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 Page 29
Increase Efficiency
Reduce Costs

Maximize Revenue
Establish
Increase Market
Differentiation
Impact

Enhance Quality

© Copyright 2006 MSX International. All rights reserved. MSX Dealer Development 2007 Page 30

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