CONFIDENTIAL

Data Visualisation for Business

ANL 201

School of Business
 CONFIDENTIAL

Study Unit 1
Overview of Business
Performance Measurement
What is Business
Performance Measurement?
Business Performance Measurement Metrics
Business Performance Measurement
The big idea – Concepts
• Business performance measurement is the process of establishing parameters within
which resources, programmes, investments and acquisitions should be in order to
achieve desired business results.
• The ability to understand, manage and improve business performance is largely
dependent on the ability to successfully measure business performance.
• Organisations derive meaningful information from business performance measures and
present them in a report or graphical presentation for review or evaluation.

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What are Business performance measurement metrics?

• Business metrics are quantifiable measures used to track business processes to judge
the performance level of your business.
• There are hundreds of these metrics because there are so many different kinds of
businesses, with many different processes.
• Individual divisions or departments within a company, such as manufacturing, marketing
and sales, are responsible for monitoring the metrics that track the performance of their
respective parts of the business.
• Senior executives track more general metrics .

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Sales Metrics

• Measure and evaluate the sales-related performance and activities of an individual, team
or company over a given period of time.
• Analysing sales metrics helps identify what is and isn’t working and provides insights into
actions to take to improve sales performance.
• Examples:
– Net sales revenue
– Quota attainment
– Growth rate
– Churn rate
– Lead response

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Marketing Metrics

• Adopting key marketing metrics helps your marketing team determine how effective its
methods and channels are in supporting the success of your business.
• Examples:
– Return on marketing investment (ROMI)
– Customer acquisition cost (CAC)
– Customer lifetime value (CLV)
– Customer retention
– Customer engagement score

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Financial Metrics

• Financial metrics reflect the financial health of the business. After all, a company’s
survival hinges on its financial health.
• Examples:
– Net income
– Net profit margin
– Gross profit margin
– Working capital
– Accounts receivable turnover ratio

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HR Metrics

• Human resources metrics can help indicate employee satisfaction and performance.
• Examples:
– Employee turnover rate
– Revenue per employee (R/e)
– Employee net promoter score (eNPS)
– Training spend

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Importance of tracking business performance metrics

• Tracking the metrics that are most important to your business and managing operations
based on the results maximises the business’s chances of success.
• Performance improvement: Tracking the right business metrics tells you how well or
poorly the business is doing and provides direction for how to improve operations.
• Comparative analysis: Tracking business metrics reveals whether the business is over-
or underperforming on key industry benchmarks.
• Alignment: Business metrics can be used to ensure the entire company is working
toward shared organisational goals.
• Compliance: Mandates to track certain business metrics from governmental and other
regulatory agencies require companies to monitor them to stay in compliance.

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Importance of tracking business performance metrics

• Communication: Reporting business metrics is a vital communications tool for

customers, shareholders, employees or society at large.
• Identifying problems: Analysing business metrics can help identify emerging problems in
time to correct them before they become major pain points.

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What Business Metrics Should You Use?

• In the absence of clarity around business goals, some organisations can go “metrics-
crazy” and try to monitor too many things.
• While every business is different and, therefore, the metrics that matter are different for
each of them.
• These three questions can be powerful tools to identify what matters most to any
business:
– Is the metric directly relevant to the performance of the business?
– Does it help predict future performance in a useful way?
– Can it be reasonably measured?

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Class Discussion 1

• What are some of the relevant metrics for a Telecom service provider?

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Class Discussion 1

• What are some of the relevant metrics for a Telecom service provider?

Example 2- Hospital
•Ratio of total revenues to total costs
Example 1- Telecom
•Average length of stay
•Bed occupancy
•Average revenue
•Appointment per time
waiting user (ARPU)
•Staff turnover
•Churn rate
•Patient satisfaction
•Subscriber growth

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Class Discussion 1

• What are some of the relevant metrics for a Hospital?

Example 2- Hospital
•Ratio of total revenues to total costs
•Average length of stay
•Bed occupancy
•Appointment waiting time
•Staff turnover
•Patient satisfaction

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Class Discussion 1

• What are some of the relevant metrics for a Hospital?

Example 2- Hospital
•Ratio of total revenues to total costs
Example
•Average 2-ofHospital
length stay
•Bed occupancy
•Ratio of total
•Appointment revenues
waiting time to total costs
•Average
•Staff turnoverlength of stay
•Patient satisfaction
•Bed occupancy
•Appointment waiting time
•Staff turnover
•Patient satisfaction

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The Balanced
Scorecard
Balanced Scorecard
Concepts of the Balanced Scorecard (BSC) Model
• A robust model of business performance measurement requires measures to be
established in all the areas so as to provide a holistic picture of organisation business
performance now and in the future.
• In 1998, David Norton and Robert Kaplan (Harvard Business School) described how
many world-class organisations have adopted business performance measurement
systems way beyond looking only at financial objectives alone.
• The BSC enables organisations to clarify their visions and strategies and puts them into
action.

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The Balanced Scorecard (BSC) Perspectives

• The BSC suggests that we view an organisation from four perspectives or dimensions,
and we develop measures, collect data and analyse the data relative to each of the
following perspectives:
Financial
How should we appear to
stakeholders?

Customer Internal Business Processes

How should we appear to Vision & Strategy What business processes must
our customers? we excel at?

Learning & Growth

How could we continue to
improve and create value?
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The Balanced Scorecard
The Financial Perspective
• For any profit-oriented organisation, the bottom-line profitability is important.
• The measures in the financial perspective must eventually show gains in order for the
organisation to conclude that its overall performance has indeed improved.
• The measures for the other three perspectives that relate to customer, internal business
process and people must be appropriately selected in order (for financial performance) to
yield results

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The Balanced Scorecard
The Customer Perspective
• Under the Customer Perspective, an organisation needs to put “Customers First”
• Organisations have to establish goals for each key customer requirement
• Measures are then selected to gauge the organisation’s success in achieving these
goals

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The Balanced Scorecard
The Internal Business Processes Perspective
• Measures under this perspective allow managers to know how well their business is
running
• Organisations must identify key business processes that need to be excelled
• Measures are then established to monitor the performance of these key business
processes

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The Balanced Scorecard
The Learning and Growth Perspective
• Sometimes referred to as the innovation and development perspective
• This perspective includes employee training and corporate cultural attitudes
• Organisations have to establish goals that relate to innovation, growth and development
• Measures are then selected to gauge organisation’s success in achieving these goals

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The Balanced Scorecard

•Perspective
An illustration —Objective
Bank Measure
Financial Survival Liquidity ratio
Growth Profit Margin
Revenue development ROI, Leverage ratio
Customer Customer retention Customer satisfaction
Increase market share Growth of current and savings accounts, safety
deposits
Internal Process Increased digital presence Growth in online, mobile banking
Increase service excellence Customer complaint resolution time
Learning and Improve employee satisfaction Employee turnover
Growth Improve employee capabilities Number of employees using IT in their work

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Class Discussion 2

• What are some of the possible measures for each of the four Balanced Scorecard
perspectives for a Telecom service provider?

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Class Discussion 2

• What are some of the possible measures for each of the four Balanced Scorecard
perspectives for a Telecom service provider?
Financial
Sales growth, Cash Flow,
Return on Investment

Customer Internal Business Processes

Vision
Satisfaction level, Customer Service resolution time, Network
lifetime value, Brand recall, downtime, Call drop, New Service
Market share, Market growth Strategy Launch Time

Learning & Growth

Employee Satisfaction, Employee
churn rate, Training and
development hours, Skill upgrade
programs 27
The Strategy Map
The Strategy Map
What is a Strategy map?
• The “strategy map” lays out the process of executing strategies through planned
activities that are intended to achieve certain strategic objectives.
• Measurable business performance indicators are then established to track advancement
towards strategic objectives, and to drive necessary improvement actions that will bring
the organisation towards its intended strategic objectives.

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Organization:

Vision:

Mission:

Strategy Theme:
Strategy Objectives and Strategy Map Measures Targets Initiatives

Financial

Customer

Internal
Business
Process

Organizational
Capacity
The Strategy Map
Vision, Mission and Strategy

• Vision Statement sets out the desired future

state of the organization

• Mission Statement is the reason for the

organisation to exist

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Organization: EE, a British mobile network operator

Vision: We provide the best network and best service, so our customers trust us with their digital lives

Mission: We run UK's biggest and fastest mobile network

Strategy Theme:
Strategy Objectives and Strategy Map Measures

Financial

Customer

Internal Business
Process

Learning and
Growth
Strategic Themes

• Strategic themes or strategic thrusts are the main high-level business strategies that an
organisation must excel to achieve its vision.
• Strategic themes knit together independent activities and focuses on effort and
resources of functional groups that are significantly important.
• Strategic themes can be regarded as an organisation’s pillar of excellence.
• They define what major areas the organisation will focus on to achieve its vision.

For example: Business growth, customer satisfaction and operational

effectiveness for the mobile network operator

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Organization: EE, a British mobile network operator

Vision: We provide the best network and best service, so our customers trust us with their digital lives

Mission: We run UK's biggest and fastest mobile network

Strategy Theme: Business growth, Customer satisfaction, Operational effectiveness

Strategy Objectives and Strategy Map Measures

Financial

Customer

Internal Business
Process

Learning and
Growth
The Strategy Map
The need for Strategic Objectives (Goals)
• Require further supporting information, initiatives and plans on how they can be achieved
• Performance management begins with Strategic Objectives
• Examples: Launch a new product, increase profitability, grow market share
• Strategic Objectives focus on limited resources on things that matter most

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Organization: EE, a British mobile network operator

Vision: We provide the best network and best service, so our customers trust us with their digital lives

Mission: We run UK's biggest and fastest mobile network

Strategy Theme: Business growth, Customer satisfaction, Operational effectiveness

Strategy Objectives and Strategy Map Measures
Decrease
Increase Increase
Financial operating
revenue profitability
costs

Improve Improve Improve

Customer communication market customer
clarity perception experience

Improve Improve end

Internal Business Increase range
Process integrated user
of services
services interface

Improve Improve
Organizational Improve
Capacity knowledge and telecom
technology
skills netwok
Measures

• In order to monitor if the strategic objectives can be accomplished, the right measures
must first be defined
• To select the appropriate measure, considerations that need to be made are:
• Is it measurable?
• Are the data currently available or easily available?
• What should the frequency be?

An effective and sustainable Business Performance Measurement should place

balanced focus on the number of measures in all four BSC (Balance Scorecard)
perspectives.

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Organization: EE, a British mobile network operator

Vision: We provide the best network and best service, so our customers trust us with their digital lives

Mission: We run UK's biggest and fastest mobile network

Strategy Theme: Business growth, Customer satisfaction, Operational effectiveness

Strategy Objectives and Strategy Map Measures
Decrease Net Profit
Increase Increase
Financial operating Operating costs
revenue profitability
costs Revenue in target markets

Improve Improve Improve Market share growth

Customer communicat market customer CSI growth
ion clarity perception experience

Increase Improve Improve end New products as %of sales

Internal Business
Process range of integrated user Brand awareness score
services services interface End user experience score
Improve Improve Employee development plans
Organizational Improve
Capacity knowledge telecom Technology training index
technology
and skills netwok Network efficiency index
Class Discussion 3

• In designing the right measure, what are the important considerations?

• Measurable
• Refutable
• Non-actionable
• Data is easily available
• Determine the appropriate time period for every measure

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Measures
The Balanced Scorecard should contain a mix of leading and lagging indicators
• Constructing Appropriate Measures
Lagging Leading

Definition Measures focus on results at the end of Measures that drive or lead to the
a certain period. performance of lag measures.

Based on historical performance. Measures intermediate processes and

activities.
Examples Revenue Punctuality
Employee Turnover Rate Absenteeism
Advantages Often easy to identify and capture. Predictive in nature and allow an
organisation to adjust based on results.
Issues Historical in nature and do not reflect May be difficult to identify and capture.
current activities. Often, new measures have no history.
Lack predictive power.

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Targets
Setting Appropriate Targets

• Business performance targets are objective values that share the same unit of
measurement as the measures per se.
• With the identified targets, the gap between current and intended performance level can
be ascertained.
• The characteristics of a well-chosen target are:
– Easily understood and communicated,
– Clear in establishing expectations, and
– Encouragements given to stretch performance

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Organization: EE, a British mobile network operator

Vision: We provide the best network and best service, so our customers trust us with their digital lives

Mission: We run UK's biggest and fastest mobile network

Strategy Theme: Business growth, Customer satisfaction, Operational effectiveness

Strategy Objectives and Strategy Map Measures Targets

Decrease Net Profit +5% y-o-y

Increase Increase Operating costs -3% y-o-y
Financial operating
revenue profitability Revenue in target markets +12% y-o-y
costs

Improve Improve Improve Market share growth +3% y-o-y

Customer CSI growth +5% next year and then
communic market customer
stabilize
ation clarity perception experience

New products as %of 12% this year

Increase Improve Improve sales +5% y-o-y
Internal Business
Process range of integrated end user Brand awareness score >90% every reporting
services services interface End user experience score period

Employee development 95% in place

Improve Improve plans 90% efficient
Organizational Improve
Capacity knowledge telecom Technology training index 99.99% uptime
technology
and skills netwok Network efficiency index
Initiatives

• Initiatives are specific projects, programmes or planned activities directed at key

processes for the purpose of enhancing their output performance.
• Such initiatives are directed at closing the gaps identified during routine business
performance measurement.
• These improvement activities are incorporated as strategic initiatives.

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Success Factors for Implementing and Sustaining Business
Performance Measurement Systems

• Top management support

• Project champion
• Adequate resources
• Employee participation
• Concise reporting

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Summary

• Ability to understand, manage and improve business performance is largely dependent

on the ability to successfully measure business performance.
• Business metrics are quantifiable measures used to track business processes to judge
the performance level of your business.
• Balanced scorecard approach allows organisations to have a balanced view of its
performance in all critical areas of the business.
• Strategy map is a system that provides linkages between vision, mission, strategic
objectives, performance measures, targets and strategic initiatives
• Well defined Business Performance Measures gauge progress on Strategic objectives

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Discussion
Develop a strategy map

• In groups of 3-4, describe and develop a strategy map for an organization of your choice.
It could be a company that you have worked in. Make use of the Balanced Scorecard
and other concepts to illustrate the strategy map.
• Use the template on Canvas to draw your strategy map
• Send to your instructor after the class
• Instructor will review your strategy map and point 1-2 groups to present in the next
seminar
• Briefly present your strategy map to the class

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Tableau (Class
Activity)
Tableau (Class Activity)

Follow your instructor for the following exercises:

- Import Excel data: global_superstore_2016.xlsx (orders)

- Build a simple worksheet

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Tableau (Class Activity)

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Tableau (Class Activity)

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Tableau File Extension
File Type File Extension Purpose
Tableau Workbook .twb It contains information on each sheet and dashboard that is present in a workbook. It has
the details of the fields which are used in each view and the formula applied to the
aggregation of the measures. It also has the formatting and styles applied. It also contains
the data source connection information and any metadata information created for that
connection.
Tableau Packaged Workbook .twbx This file format contains the details of workbook as well as the local data that is used in
the analysis. Its purpose is to be share with other Tableau desktop or Tableau reader
users assuming it does not need data from the server.
Tableau Data source .tds The details of the connection used to create the tableau report are stored in this file. In
the connection details it stores the source type(excel/relational/sap etc.) as well as the
data types of the columns.
Tableau Packaged Data source .tdsx This file is similar to the .tds file with the addition of data along with the connection
details.
Tableau Data Extract .tde This file contains the data used in a .twb file in a highly compressed columnar data
format. This helps in storage optimization. It also saves the aggregated calculations that
are applied in the analysis. This file should be refreshed to get the updated data form the
source.

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