1. BetterManagement Presents
Achieving Performance
Improvement: Case Studies in
Performance Management
Presented By:
Tony C. Adkins
SAS
Visionary perspectives for management insights
Copyright © 2004, SAS Institute Inc. All rights reserved.

2. Meaningful Performance Management
Meaningful
Accurate
Aligned
Copyright © 2004, SAS Institute Inc. All rights reserved.

3. Managing the business: Why should I be interested?
Less than 10% of strategies effectively executed
Confusion & politics
• Inconsistent messages, no understanding of what creates value
• Siloed operations, different agendas
• Inefficient allocation of resources
• Short term thinking/ tactics
• Drowning in data, constant fire fighting
Copyright © 2004, SAS Institute Inc. All rights reserved.

4. What is Performance Management?
• IT Analysts
• Commercial business
• Public sector
Copyright © 2004, SAS Institute Inc. All rights reserved.

5. Commercial business
Manage the limited resources
How to achieve more profit
Ideally aligned with corporate strategy
Copyright © 2004, SAS Institute Inc. All rights reserved.

6. Public sector
The difference here is the lack of focus on
“profit.”
In a report outlining the PMA, President George W. Bush wrote:
“Government should be results oriented – guided not only by process but guided
performance. There comes a time when every program must be judged either a
success or a failure. Where we find success, we should repeat it, share it, and
make it the standard. And where we find failure, we must call it by its name.
Government action that fails in its purpose must be reformed or ended.”
Copyright © 2004, SAS Institute Inc. All rights reserved.

7. Managing the
business
Resources
resource
drivers
Performance
Cost Drivers Activities
Measures
activity
drivers
Customers,
Products, Services
& Channels
Copyright © 2004, SAS Institute Inc. All rights reserved.

8. Managing the
business
Resources
resource
drivers
Performance
Cost Drivers Activities
Measures
activity
drivers
Customers,
Products, Services
& Channels
Copyright © 2004, SAS Institute Inc. All rights reserved.

9. Managing the
business
Resources
resource
drivers
Strategy Performance
Cost Drivers Activities
Modeling Measures
activity
drivers
Customers,
Products, Services
& Channels
Copyright © 2004, SAS Institute Inc. All rights reserved.

10. Managing the
business
Resources
resource
drivers
Strategy Performance
Cost Drivers Activities
Modeling Measures
activity
drivers
Customers,
Products, Services
& Channels
Planning
Copyright © 2004, SAS Institute Inc. All rights reserved.

11. Managing the Budgeting
business
Resources
resource
drivers
Strategy Performance
Cost Drivers Activities
Modeling Measures
activity
drivers
Customers,
Products, Services
& Channels
Planning
Copyright © 2004, SAS Institute Inc. All rights reserved.

12. EXECUTION
Managing the Budgeting
business
Resources
resource
drivers
Strategy Performance
Cost Drivers Activities
Modeling Measures
activity
drivers
Customers,
Products, Services
& Channels
Planning
Copyright © 2004, SAS Institute Inc. All rights reserved.

13. EXECUTION
Managing the Budgeting Consolidation
business
Resources
resource
drivers
Strategy Performance
Cost Drivers Activities
Modeling Measures
activity
drivers
Customers,
Products, Services
& Channels
Planning
Copyright © 2004, SAS Institute Inc. All rights reserved.

14. EXECUTION
Managing the Budgeting Consolidation
business
Resources
resource
drivers
Scorecard/
Strategy Performance Dashboard +
Cost Drivers Activities
Modeling Measures Compliance
activity
drivers
Customers,
Products, Services
& Channels
Planning
Copyright © 2004, SAS Institute Inc. All rights reserved.

15. EXECUTION
Managing the Budgeting Consolidation exploration
business
Resources
resource
drivers
Scorecard/
Strategy Performance Dashboard +
Cost Drivers Activities
Modeling Measures Compliance
activity
drivers
Customers,
Products, Services exploration
& Channels
Planning
Copyright © 2004, SAS Institute Inc. All rights reserved.

16. EXECUTION
Managing the Budgeting Consolidation exploration
business
Resources
Human & IT Capital
Manufacturing & Research resource
drivers
Scorecard/
Strategy Performance Dashboard +
Cost Drivers Activities
Modeling Measures Compliance
activity
drivers
Process & Customers,
Quality Improvement Products, Services exploration
& Channels
Economic & Market
trends
Supplier/ Customer
Planning interactions, logistics & behaviors
Copyright © 2004, SAS Institute Inc. All rights reserved.

17. Managing the business: Where do I start?
Understand how you consume information today
Information Evolution Model
Level 5: Innovate (effectiveness)
Exploit
Level 4: Optimize (efficiency)
Level 3: Integrate (transparency)
Level 2: Consolidate (silos of many)
Gather
Level 1: Operate (silos of one)
Factors that influence results
• People (Skills, ability, needs)
• Process (Logical execution)
• Culture (Values toward use of information)
• Infrastructure (How systems support business needs)
Copyright © 2004, SAS Institute Inc. All rights reserved.

18. Information Revolution –
Authors: Jim Davis, Gloria J. Miller, Allan
Russell
Copyright © 2004, SAS Institute Inc. All rights reserved.

19. A Brief look: Four Case Studies
LubeOil
HomeHealth
Super Draft
Armed Forces
Copyright © 2004, SAS Institute Inc. All rights reserved.

20. LubeOil
Copyright © 2004, SAS Institute Inc. All rights reserved.

21. LubeOil
Copyright © 2004, SAS Institute Inc. All rights reserved.

22. LubeOil
BENCHMARK TEMPLATE # 1
ABC Profit Value Chain
Affiliate: Various Global
Sort Criteria: Total Lube Business
*All revenue/cost in USD/BBL
Raw Acct Del Sales and Net
Affiliate Volume (BBL) Realization Material GM LOBP Distribution GM Marketing Advertising Margin
6,202,039 150.5 85.7 64.8 11.1 45.1 21.8 6.2 17.1
8.6
Local Affiliate 1
1,025,109 162.2 94.6 67.6 17.5 16.6 33.6 19.7 6.1 7.8
Local Affiliate 2
832,344 166.6 81.7 20.5 11.5 49.6 22.9 5.9 20.7
84.9
Local Affiliate 3
489,227 135.9 92.2 43.7 9.7 25.7 4.0 12.2
8.3 9.6
Local Affiliate 4
368,164 188.9 105.8 83.1 72.2 21.1
7.9 2.9 1.7 49.3
Local Affiliate 5
91,373 87.5 30.8 4.9 71.7 14.2 10.8
219.8 132.3 96.7
Local Affiliate 6
154.8 87.8 67.0 10.9 11.3 44.8 21.5 5.9 17.4
Affiliate Weighted Average
487,164 193.0 113.0 80.0 28.0 4.0 48.0 38.0 14.0 -4.0
Regional grouping
38.2 -25.2 13.0 -17.1 7.3 3.2 -16.5 -8.1 -21.4
VARIANCE TO AVG
Copyright © 2004, SAS Institute Inc. All rights reserved.

23. HomeHealth - Challenges
Reduce cost
• For reimbursement changes
Maintain quality
• Quality as defined by our customers
Improve access
• Provide services that focus on the needs & wants of our
customers
Copyright © 2004, SAS Institute Inc. All rights reserved.

24. HomeHealth
Psych nursing visit is 3 times more costly than
med-surg visit
HMO visits cost 1.5 times more than Medicare
visits
Admission process costs $450/client
PT travel is 2 times more expensive than RN
travel
Documentation costs $45 per visit
Copyright © 2004, SAS Institute Inc. All rights reserved.

25. HomeHealth
Activity “costing” can elicit fear and
defensiveness
Activity “management” may be more acceptable
Education begins with staff interviews
Sharing what makes work hard validates staff
long-standing frustrations and involves them in
the process
Copyright © 2004, SAS Institute Inc. All rights reserved.

26. Strategic Planning
Focus strategic plan on areas that are most
important to customers and/or high cost
Obtain organizational commitment to objectives
and tactical plans
Copyright © 2004, SAS Institute Inc. All rights reserved.

27. SuperDraft - Challenges
Define profit by each of SuperDraft’s more than
18,000 customers
Create a sustainable ABC/M system
Build and deploy an ABC/M system in six
months
Deliver results of major impact
Copyright © 2004, SAS Institute Inc. All rights reserved.

28. SuperDraft
Copyright © 2004, SAS Institute Inc. All rights reserved.

29. SuperDraft
Copyright © 2004, SAS Institute Inc. All rights reserved.

30. DND - Canarus
Create ABC models to support business
planning
Ensure the ABC models are fundamental part of
the IME
Create a scorecard driven system that could
also be used for re-engineering, ASD,
continuous improvement
Tie the ABC models into the financial and
managerial accounting system
Copyright © 2004, SAS Institute Inc. All rights reserved.

31. Integrated Management Environment
BUSINESS PLANNING PROCESS BALANCED SCORECARD
Operational Forces Key Strategies
Output
Input O CF/DND
Command & Control
U
T
Training Maximize Op Optimize Protect
Personnel P
Combat Capability Resource Use Environment
U
Support
Materiel Capable Strengthen Provide Promote
T
Infrastructure Defence Team Support Awareness
Mandated Programs Forces
S
$
Operational Forces
Accountability View
LFC
LFWA LFCA SQFT LFAA 1 DIV CLFCSC LS
Economy Efficiency Effectiveness
... ...
Performance Measurement EIS ... ... ... ... ...
Activity Based Management Risk Assessment
Process View
CF/DND
S Dir C Mgmt F Gen F Emp
Data Mart C&C Op Forces Trg Support M Prog
Service Standards
Fin
Mat
Training Standards
Pers Pers Eqpt
Org Safety
Benchmarks C Trg Indiv Trg
Plans Infra
National Systems
OVERSIGHT AND CONTROL FRAMEWORK
Copyright © 2004, SAS Institute Inc. All rights reserved.

32. Major Lessons Learned
Highlight and ACT
Link ABM to Performance Management
Activity “costing” can elicit fear
Can be complex
“Pot of Gold at the End of the Rainbow”
Copyright © 2004, SAS Institute Inc. All rights reserved.

33. Questions?
Tony Adkins
Tony.Adkins@sas.com
Copyright © 2004, SAS Institute Inc. All rights reserved.

34. Upcoming Webcasts
Leadership Essentials for Balanced Scorecard
Success: How to Get Everyone Involved in
Running Your Business
Balanced Scorecard Fundamentals
Barriers and Benchmarks: Performance
Improvement Benchmarking Survey Conclusions
http://www.bettermanagement.com/seminars/seminarList.aspx?f=11
Sam Sheikh
Sam.Sheikh@BetterManagement.com
Copyright © 2004, SAS Institute Inc. All rights reserved.