a reference guide to the balanced scorecard service …

A REFERENCE GUIDETO THE BALANCED SCORECARD

SERVICE MODEL

Robert S. Last (Editor)March 29, 2005

A Reference Guide to the Balanced Scorecard Serv ice Model

Introduction 9

Exhibit 1 – Relating Measurement-ManagedOrganizations to Performance . . . . . . . . . . . . . . . . . . . .12

Chapter 1 – The Balanced Scorecard:From Big Business to IT Service & Support 15

Part I – The Origins of the Balanced Scorecard . . . . . . .16Exhibit 2 – ECI’s Balanced Business Scorecard . . . . . . .21Part II – The Balanced Scorecard Service Modelfor Support Centers . . . . . . . . . . . . . . . . . . . . . . . . . . . .22Exhibit 3 – The Support CenterBalanced Scorecard Service Model . . . . . . . . . . . . . . . .24Exhibit 4 – Measurement-Managed OrganizationsExhibit Different Cultural Characteristics . . . . . . . . . .31

Chapter 2 – Why Balanced Scorecards Workfor Support Centers: Warning Signs & Analysis 33

Exhibit 5 – Measurement System Self-Assessment . . . .37Exhibit 6 – Lag and Lead Performance Measures . . . . .51Exhibit 7 – Sample Support Center BalancedScorecard Key Performance Indicators . . . . . . . . . . . . .52Goals, Metrics, & Key Performance Indicators . . . . . . . .54

TABLE OF CONTENTS

The HDI Metr ics Guide

Chapter 3 – Steps to Implementinga Support Center Balanced Scorecard 57

Step 1 – Choose Your Support Center’s Metrics . . . . . . .58Step 2 – Link Measurements to Strategy . . . . . . . . . . . . .60Exhibit 8 – Link Measurements to Strategy . . . . . . . . .62Step 3 – Performance Measures Data Dictionary . . . . . .63Exhibit 9 – Performance Measure Data Dictionary . . . . .65Step 4 – Trend Charts & The Quarterly Review . . . . . . .66Exhibit 10 – First Quarter 2005 Metrics Report . . . . . .68

Chapter 4 – The HDI Metrics Catalog Series 69

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70Anatomy of a Metric . . . . . . . . . . . . . . . . . . . . . . . . . . . .70Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73

Appendix 77

1 – List of Support Center Metrics & Formulas . . . . . . .782 – Worksheet – Linking Measurements to Strategy . . . .842a – Examples of LMS . . . . . . . . . . . . . . . . . . . . . . . . . .853 – Worksheet – Performance Measures

Data Dictionary . . . . . . . . . . . . . . . . . . . . . . . . . . . .873a – Examples of Data Dictionary Entries . . . . . . . . . . .884 – Worksheet – Quarterly Metrics Report . . . . . . . . . . .895 – Worksheet – Agenda for The Quarterly

Metrics Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . .916 – Directions for Creating Performance

Measure Data Dictionary Entries . . . . . . . . . . . . . . .937 – Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . .96

INTRODUCTION

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When you can measure whatyou are speaking about,

and express it in numbers, youknow something about it; butwhen you cannot measure it innumbers, your knowledge is of ameager and unsatisfactory kind…

Lord Kelvin,Scottish Mathematician (circa 1870)

IT service and support operations have beencollecting data from ACDs, problem tracking systems,knowledge systems, e-mail programs and other suchtools for years. As an industry, service and support hasbeen very successful in collecting this data and,usually, plugging it into an Excel spreadsheet andthen presenting it at management meetings as“information,” where it is discussed, debated, and thenused to make decisions. The trouble with this almostuniversal approach is that it confuses the collecteddata with actionable information.

There’s a big difference between the two; data is just rawgroups of numbers that represent events that are nowhistorical, lack context, and most importantly, don’treveal anything in particular unless they are analyzed,

Introduction

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compared to a baseline of some type, and used in acontext that influences action. The best supportoperations use their metrics to drive their performanceupward and provide valuable information to theircorporate parent. While this is not a new concept, themethodology has evolved from simply counting callsto gathering information that is actionable, change-oriented and reflective of success, problems, and failure.

The concept of a Balanced Scorecard (BSC) is the highestevolution of the capture and use of metrics, because it tiesperformance measures to strategy and will help anorganization evolve into a measurement managedorganization. The goal of such an organization is to have areporting capability that directs behavior, evaluatesperformance against predetermined goals, and providesnot just data, but information for adjusting corporate andIT goals by creating a closed-loop feedback process.Organizations and departments using Balanced Scorecardscan distinguish themselves from their competitors andbecome an asset to their corporate parents.

This assertion is borne-out from the results ofresearch studies. The table in Exhibit 1 – RelatingMeasurement-Managed Organizations to Performanceshows the difference between organizations that embracemeasurement-management and those that do not.

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Exhibit 1Relating Measurement-Managed Organizationsto Performance 1

Even a support center that uses a BalancedScorecard as a standalone “metrics” report canincrease its effectiveness and efficiency by providingits corporate parent with indisputable evidence ofits success and information about customerproblems, concerns, and attitudes.

Measures of Success Measurement ManagedOrganizations

Non-MeasurementManaged Organizations

Perceived as an industryleader over the last three

years (1999-2002)74% 44%

Reported to be financiallyranked in the top third

of their industry83% 52%

Three year Returnon Investment (ROI) 80% 43%

Last major culturalor operational changejudged to be very or

moderately successful

97% 55%

1 John H. Lingle and William A. Schieman, Is Measurement Worth It?, in MichaelBitterman, “How IT Benefits From Adopting Measurement-Management Techniques,”www.performance-measurement.net/news-detail.asp?nID=200, July 25, 2004(www.itpg.com)

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The goal of this reference guide is to providesupport managers with a guide to understandingand constructing a balanced support card that isapplicable to their support operations. It mixestheory with practical advice on constructing aBalanced Scorecard that will assist the reader indeveloping a support center service model and takethe use of metrics beyond the simple bean countingthat has characterized metrics programs so far.

This reference guide will be the precursor of a newseries that HDI is preparing on support centermetrics. Throughout 2005, HDI will be workingwith support managers and consultants throughoutthe country to produce a series of definitive guidesthat define, guide, and bring best practices tosupport managers everywhere.

All worksheets contained within this guide areavailable in template form on the HDI Web sitewww.ThinkHDI.com, for Gold members and above.

If you are interested in becoming an author forthis exciting project, please contact Rich Hand,Director of HDI Membership Operations [email protected] for more information.

CHAPTER 1

The Balanced Scorecard:From Big Business

to IT Service & Support

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PART I – THE ORIGINSOF THE BALANCED

SCORECARD CONCEPT

Robert S. Kaplan & David P. Norton

T he concept of a balancedscorecard concept was created

by Robert S. Kaplan, the MarvinBower Professor of Leadership

Development at the Harvard Business School andDavid P. Norton, the president of Renaissance Solutions,Inc. Combining academic inquiry and practicalbusiness knowledge they began a revolution with thepublication of their article, “The Balanced Scorecard—Measures That Drive Performance.” 2 The methodologythey created with this article has become the “goldstandard” for ensuring “…that strategies address allareas of the enterprise…” 3 For IT service and supportorganizations, such an adherence to discipline, if itever existed, is a new concept that is particularlysuited to the IT world.

Chapter 1

2 Robert S. Kaplan and David P. Norton, “The Balanced Scorecard—Measures ThatDrive Performance,” Harvard Business Review, January-February 1992

3 IT Services, Anthony F. Tardugno, Thomas R. DiPasquale & Robert E. Matthews,Upper Saddle River, NJ, Page 35, 2000.

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Kaplan and Norton argue that the traditional relianceupon quarterly financial reports, while obviouslyimportant, is a model that is based on accountingprinciples that were developed centuries ago “…foran environment of arm’s-length transactions betweenindependent entities. This venerable financialaccounting model is still being used by informationage companies as they attempt to build internal assetsand capabilities, and to forge linkages and strategicalliances with external parties.” 4 As the authors pointout, financial measures tell a story based on pastevents while we live and work in an increasingly “realtime” world where what happens in Europe and Asiais just as important as what happens in Washington,D.C. and on Wall Street.

The Balanced Scorecard is not a replacement for financialaccounting and other metric programs; it is anevolutionary management tool for a new century wherebusiness is conducted world-wide and at all hours. AsKaplan and Norton describe it, the Balanced Scorecard

…complements financial measurements of pastperformance with measures of the drivers of futureperformance. The objectives and measures of the

4 Kaplan & Norton, p7

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scorecard are derived from an organization’s visionand strategy. The objectives and measures vieworganizational performance from four perspectives:

n Financialn Customer n Internal business processes, andn Learning and growth

These four perspectives provide the framework for theBalanced Scorecard. 5

The biggest advantage of the Balanced Scorecard isthat it allows managers of businesses to survey theiroperations from four, interlocking perspectives. It linksstrategy to performance measures while keeping thetraditional financial measures that represent pastperformance. It provides answers to four questions:

n How do customers see us? (Customer perspective)n What must we excel at? (Internal perspective)n Can we continue to improve and create value?

(Innovation and learning perspective)n How do we look to shareholders?

(Financial perspective)

5 Kaplan and Norton, Page 8

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While simultaneously minimizing informationoverload and data smog, by restricting the number ofmeasures used to measure success to a selectednumber. Kaplan and Norton assert that the BalancedScorecard “…is more than a new measurementsystem. Innovative companies use the scorecard as thecentral, organizing framework for their managementprocesses. Companies can develop an initial BalancedScorecard with fairly narrow objectives: to gainclarification, consensus, and focus on their strategy,and then to communicate that strategy throughout theorganization. The real power of the BalancedScorecard, however, occurs when it is transformedfrom a measurement system to a management system.As more and more companies work with the BalancedScorecard, they see how it can be used to:

n Clarify and gain consensus about strategyn Communicate strategy throughout the organizationn Align departmental and personal goals to the strategyn Link strategic objectives to long-term targets and

annual budgetsn Identify and align strategic initiativesn Perform periodic and systematic strategic reviewn Obtain feedback to learn about and improve strategy

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The Balanced Scorecard fills the void that exists in mostmanagement systems—the lack of a systematic processto implement and obtain feedback about strategy.Management processes built around the scorecardenable the organization to become aligned and focusedon implementing the long-term strategy. Used in thisway, the Balanced Scorecard becomes the foundationfor managing information age organizations.” 6

On the following page is an example of a BSC for afictional company called ECI. It has the virtue ofsimplicity while measuring the critical success factorsthat the company’s management has identified. Itprovides goals for each BSC quadrant and providesmeasures for determining the progress towardsreaching those goals.

6 The Balanced Scorecard, Robert S. Kaplan and David P. Norton, The President and Fellowsof Harvard College, Page 17-18, 1996.

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Exhibit 2ECI’s Balanced Business Scorecard shows a typicalcorporate scorecard 7

7 “The Balanced Scorecard—Measures that Drive Performance,” Robert S. Kaplan andDavid P. Norton, Harvard Business Review, January-February 1992.

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Building upon the work of Kaplan and Norton, RonMuns, CEO of HDI, and Mark Ellis of Kronos haverefined the Balanced Scorecard concept and made itapplicable for IT service and support centers. In thearticle reproduced below, they discuss how to use theBSC to manage the financial and operational challengesfacing support center managers. Using well-definedgoals, metrics, and key performance indicators theyexplain how to link performance measures withcorporate and organizational strategy in ways that areboth more efficient and effective than what is commonlyused today. With the growing trend of all business unitoperations being brought into alignment with corporatestrategy there is no better time than now to explore newways to “count the beans” in a support center.

PART II – THE BALANCED SCORECARDSERVICE MODEL FOR SUPPORT CENTERS

Ron Muns, HDI & Mark Ellis, Kronos, Inc.

The Support Center’s Balanced Scorecard (BSC)Service Model

I have been working with Mark Ellis of Kronos(www.Kronos.com) as well as our Strategic

Advisory Board (SAB) to define a model for

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measuring the performance of IT Service and Support(the support center). The results of this work areincluded in HDI's new support process guidebook,which will be published in the first Quarter of 2005.I am excited and pleased with this ground breakingwork and want to share some of it with you.

Most of the book focuses on processes based on ITIL®;however, it also covers other important processes forsupport centers that are not covered by ITIL®. Markand I have documented an operational service modelthat balances key performance metrics that oftenconflict with one another. For example, customer needs,at times, seem to be at odds with costs/productivitygoals. While both are important, they can competefor your attention.

The Support Center BSC Service ModelEffective financial and operational management forany support center operation should be directlylinked to an integrated Balanced Scorecard ServiceModel that focuses on customer satisfaction, employeesatisfaction, costs/productivity, and organizationalmaturity. Utilizing these four elements to form ahigh-level goal set with supporting key performanceindicators (KPIs), also known as key businessindicators or operational metrics, will not only allow

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a support center manager to look at past performanceand trends, but also will allow for optimizedforecasting of future costs, operational performance,and service levels based on workload for the projectedbase of customers, whether internal or external.

Exhibit 3The Support Center Balanced Scorecard Service Model

Customer SatisfactionCustomer satisfaction is generally measured viacustomer surveys. To minimize bias, an externalfirm should ideally conduct these surveys. Externalsurvey firms may also offer comparative industrydata or provide additional analytics on surveyresults. When this is not possible, efforts should bemade to assure survey participants of the value oftheir honest responses.

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The primary customer satisfaction survey is transactionbased, which involves utilizing an abbreviated set ofquestions based on closed incidents (phone, e-mail orWeb). These surveys are usually focused on a limitednumber of questions specific to an incident duringa given period, and specifically target the person whogenerated the original incident. Standard samplequestions might include:

n Please rate the accuracy of the solution provided. n Please rate the timeliness of the solution provided. n Please rate our initial responsiveness to

your incident. n Please rate the professionalism of the support

engineer who answered your incident. n Please rate your overall experience for this incident.

Other indicators of customer satisfaction might includerepeat usage of support center services (mostly appliesto external support organizations) and percentage ofcustomers participating in surveys. If customers don’tthink their input matters, they won’t respond.

Employee SatisfactionIn any service business, the people who deliver thatservice are the essential product. Despite this, manyservice organizations, including both internal and

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external support centers, do not properly manage andmaintain their employees’ general job satisfaction.This can impact both customer satisfaction as well asthe cost of operations.

An employee survey should be conducted twice a yearwith each employee, ideally about six months apart.Regular surveys will allow comparison of results andwill identify improvement and/or dissatisfaction overtime. These surveys should not be confused withemployee performance evaluations/reviews.

Finally, companies that effectively manage employeesatisfaction do not always have the highest pay scalesfor their area. Pay rates are often ranked as the thirdor fourth most important issue on employee surveys.Generally, communication and training willfrequently be more of an issue. Well-managedcustomer support centers that can integrate employeeneeds into an effective service delivery model willbecome a target employer of future employees.

Costs/Productivity GoalsIt is time for the industry to come together and agreeon definitions and methods for developing costmetrics. This is the only way that benchmarkcomparisons can have any value. Standard costing

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(and operational) metrics will allow supportorganizations to understand their cost structures andoperational efficiencies in comparison to otherorganizations or within the organization itself. It willhelp you understand and answer questions, such as:

n Are we spending too little on supportinfrastructure and too much on labor?

n Are our costs for e-mail support too high? n How much could we save by moving our

end-users from phone support to self-help? n Are our costs high because we have excessive

overhead allocations? n When can we expect to get a return from the

introduction of new support tools? n We do level 1, level 2, and level 3 support and

thus our cost per incident is higher than ourcompetitors. Does management understand thatour competitor’s support costs only include level1 support? Or, does management understandthat the competitor’s support organization onlyprovides log and route support?

Doing costs/productivity analysis on the supportorganization eventually boils down to calculatingcosts in terms of cost per unit of work and per servicedelivered (i.e., per incident). The most important unit

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is the cost per incident, which should be computedseparately by channel received (phone, self-help, chat,e-mail, self-healing, etc.). This analysis may be furtherbroken down by products or services offered.

Organizational MaturityOf the four quadrants; customer, employee, costs/productivity, and organizational maturity, this last oneis the most strategic and the most subjective. It isfocused on the structure, ability to change, quickness,responsiveness, and strategic positioning of supportwithin the larger organization. Organizational maturityenables customer and employee satisfaction withoptimal cost structure. Elements to track that indicateorganizational maturity include:

1. Visible executive support of the support center. 2. Time to fill knowledge gaps—When new errors

are identified, how long does it take to documentthe problem and the solution? How long doesit take for this information to be available to thesupport analysts and end-users (customers)?

3. Time to Employee Proficiency—How longdoes it take for new employees to be productive?

4. Time to New Product Proficiency—How longdoes it take for the support organization to beproficient on new products?

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5. Flexibility of cost to changes in workload—How quickly can the support organization changethe cost structure (up or down) as work varies?

6. Diversity—Has the organization embraced thevalue of racial and cultural diversity withinsupport? If the organization has global teammembers, are they aware of cultural and localissues that vary the definition of best practices.

7. Work elimination through problemmanagement and change management—Tracking of cost savings resulting fromidentification and elimination of known errors.

8. Formalization of IT processes—Trackingindicators that the support organization hasintegrated all support processes with those ofother IT functional areas.

ConclusionThe key to the BSC Service Model is to continuallyimprove in all four quadrants. It is easy to improvecustomer satisfaction if you don’t consider costs. It iseasy to lower costs if you don’t care about employeeor customer satisfaction. It is easy to mature as anorganization if you don’t focus on anything else. Thekey is in the balance. The yin and the yang of thesupport center. As with life, it is about balance. Byunderstanding how our management decisions affect

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our customers, our employees, costs, and our future,we can evolve into that wonderful, but elusive “worldclass” support center. Best of luck! 8

Organizations that are on a quest for “world class”status will not achieve that status by accident. Theyhave trained and developed their leaders, employees,and processes to the point that in everything they do,they exhibit characteristics that define their success.They have studied, researched, argued, fought, talkedamong themselves, and talked with others to such adegree, that they are ready to embrace change thatwill serve their customers, their employees, theirstockholders, and the world itself. They havetranscended simply counting beans and moved tolong-term, sustainable success by looking at theirproducts and operations honestly, objectively, andwith an excitement based on the knowledge that theiroperations are steadily improving, growing, andevolving to world-class status.

6 “The Support Center’s Balanced Scorecard Service Model,” Ron Muns and Mark Ellis,The Muns Report, HDI, December 8, 2004.

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These characteristics are presented below inExhibit 4 – Measurement-Managed OrganizationsExhibit Different Cultural Characteristics. 9

Exhibit 4Measurement-Managed Organizations Exhibit DifferentCultural Characteristics

9 John H. Lingle and William A. Schieman,, Is Measurement Worth It?, inMichael Bitterman, “How IT Benefits From Adopting Measurement-ManagementTechniques,” www.performance-measurement.net/news-detail.asp?nID=200,July 25, 2004 (www.itpg.com)

CHAPTER 2

Why Balanced ScorecardsWork for Support Centers:

Warning Signs and Analysis

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What makes a BalancedScorecard such a powerful

tool for a support center is therevealing link between strategy andaction that a balanced scorecardprovides. Few operations are ascomplex, as important or assensitive as the relationshipbetween customers and thecompanies they patronize. Support

centers are vital to the success of a business becausethey provide customers with the customer service andsupport that can be a competitive and strategicadvantage in an ever-growing, complex marketplacethat values lean operations, real-time information, andhigh-tech, high-touch business performance in a24/7/365 world. In this context, the value of servicemanagement becomes critical to business success andrequires a new methodology to assess service andsupport quality. As one author points out, “Changingcustomer needs and expectations require all companiesto adjust the way they do business. Increasinglycomplex products, global markets, and broadercustomer bases are forcing organizations to re-evaluateevery facet of their operations and business practices.”10

Chapter 2

10 Using Service Goals and Metrics to Improve Help Desk Performance, Mark W. Ellis,Colorado Springs: HDI, 2003, Page 7.

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How does a support manager know when its time toevaluate an existing performance measurementsystem? There are clear signs that indicate when it istime to revamp a metrics-capture program:

n Performance is acceptable on all dimensionsexcept profit (or cost). Quality programs andprocesses are functioning well and employeeand customer morale is high, but profits or costcontainment are not meeting expectations.

n No one notices when performance measurementreports aren’t produced. This situation developsslowly until one day someone realizes that theyaren’t receiving metrics reports and haven’t beenreceiving them for weeks or even months. Theexplanation for this phenomenon is simple; thedata that were being delivered contained no usefulinformation for senior managers. In the supportworld, it is not uncommon to encounter seniormanagers that do understand the basics ofanalyzing support-related metrics and who havemarginalized their support managers becausethey may deliver an unpopular message.

n Managers spend significant time debating themeaning of the measures. This state of affairs

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indicates that performance measures are notbeing linked to corporate strategy. Support andcustomer service are not seen as a value-addedundertaking.

n Performance measures have not changed ina long time. Customer service and support,and the wants and needs of a customer baseare dynamic. Performance measures should beadjusted to reflect this dynamic.

n Corporate strategy has recently changed.Customer service and support must be linkedto corporate strategy; it cannot be a standalonefunction. 11

Auditing the Balanced ScorecardAn essential part of a Balanced Scorecard evaluationis a formal audit of the performance measures thatmake up the scorecard. Just as a yearly physicalkeeps the human body healthy over the long-term,a yearly scorecard audit maintains a healthy BSCsystem and encourages changes to be made as events,information, and circumstances require. A sample auditquestionnaire is provided on the next page.

11 Adapted from Michael R. Vitale and Sarah C. Mavrinac, How Effective Is YourPerformance Measurement System?,” Management Accounting, August 1995.

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Exhibit 5Measurement System Audit Tool 12

PART I – OVERALL APPROACH TO MEASUREMENT

1. The metrics in our database are tightly linkedto the key success factors that will allow us todifferentiate ourselves from our competitors.

(5) Strongly Agree (4) Agree (3) Somewhat Agree (2) Disagree (1) Strongly Disagree

2. Our database was built with a plan, rather thanbeing something that just evolved over time.


3. Our President, CEO, or CIO looks at no morethan 20 measures every month to evaluate theoverall organization’s performance.


12 Adapted from Keeping Score: Using the Right Metrics to Drive World-ClassPerformance, Mark Graham Brown, New York: Quality Resources, 1996, Page 29-35

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4. Measures of performance are mostly consistentacross our business units/locations.


6. We have a well-balanced set of measures, withabout equal amounts of measures/data in each ofthe following categories: Customer Satisfaction,Employee Satisfaction, Costs/Productivity, andOrganizational Maturity.


7. We have routine monthly and quarterly meetingsto review, analyze and decide about changes tothe BSC.


PART II – CUSTOMER-RELATED MEASURES

8. Our data dictionary is comprehensive for each KeyPerformance Indicator (KPI) in the scorecard.


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9. Our organization collects data on both customersatisfaction and perceived value levels using avariety of techniques administered by anindependent vendor.


PART III – EMPLOYEE-RELATED MEASURES

10. We survey our employees at least once a year todetermine their satisfaction levels with variousaspects of how the organization is run.


11. Employee surveys are anonymous and morethan 75% are returned each year.


12. Research is done to determine what is importantto employees before putting together a surveywith standard questions.


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13. Our organization collects data on othermetrics that relate to employee satisfactionsuch as voluntary turnover, absenteeism, hoursworked per week, requests for transfers, stress-related illness, etc?


14. Individual measures of employee satisfaction areaggregated into an overall employee satisfactionindex, similar to the customer satisfaction index.


PART IV – COSTS/PRODUCTIVITY MEASURES

15. We have identified a few (e.g., 4 to 6) keymeasures of our overall financial performance.


16. We have identified a few key measures of thesupport department’s financial performance.


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17. Financial measures are a good mix of short-and-long-term measures of financial success.


18. Financial measures are consistent acrossdifferent units/locations.


19. We collect financial data on our majorcompetitors to use in evaluating our ownperformance and in setting goals.


20. The organization aggregates financial datainto one or two summary statistics that reflectthe performance of the support department,e.g., Economic Value-Added (EVA) or Returnon Investment (ROI).


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PART V – ORGANIZATIONAL MATURITY

21. There is visible executive support of the supportcenter.


22. The support manager provides routine briefingsto executives of the organization on its status,operations, plans, and problems.


23. The support department is successful in fillingknowledge gaps in a timely manner that hasbeen quantitatively measured.


24. The support department has a formal plan andtimeline for training, assessing, and certifyingemployee proficiency for technical and qualitativeskill sets.


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25. The support department has a formal plan andtimeline for training, assessing, and certifyingemployee proficiency on new products and newcustomer needs.


26. The support center has the leadership andmanagement capability to change its flexibilityof cost because of changes in workload.


27. The support department has embraced thevalue of racial, cultural, and gender diversityand actively promotes diversity.


28. The support department has formal protocolsfor problem solving and troubleshootingtechnical problems.


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29. The support department actively seeks tocreate work elimination strategies throughproblem management and change managementprograms.


30. The support department is actively seeking toformalize its IT processes by using an industry-based program, i.e., ITIL, CMM, HDI SCC,Malcom Baldridge, etc.


31. The support department uses a recognizablesupport model to manage its work.


32. Any process measures that are collectedare directly related to key product/servicecharacteristics that customers care about.


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33. Cycle time is used as a key operational measurethroughout the organization.


34. Operational measures allow us to preventproblems rather than just identify them.


35. The support department has establishedmeasurable standards for all key processmeasures.


PART VI – REPORTING AND ANALYZING DATA

36. The support department reports data from allsections of its scorecard in a single report toall key managers, internal customers, andexternal customers.


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37. Data are presented graphically in an easy-to-read format that requires minimal analysis toidentify trends and levels of performance.


38. Data on customer satisfaction, employeesatisfaction, and organizational maturity arereviewed as often and by the same executives asdata on financial, and operational, performance.


39. The organization has done research to identifycorrelations between customer satisfaction levelsand financial performance.


40. The corporate parent understands therelationships between all the key measures inthe support department’s BSC.


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41. Performance data are analyzed and usedto make key decisions about the supportdepartment’s role in the organization’s missionand operation.


42. The key measures in the support BSC areconsistent with the organization’s mission,values, and long-term goals and strategies.


43. The support department continuously evaluatesand improves its measures and the methodsused to collect and report performance data.


44. Automated and human (i.e., surveys/checklists/data dictionary entries) measurement devicesare calibrated on a regular basis to ensureaccuracy and reliability.


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45. The measures in the support department’sscorecard are used by senior management forplanning and budgeting purposes.


CALCULATING YOUR SCORE: LOWER IS BETTER

Total questions 1 to 7:

Total questions 8 and 9:



Total questions 21 to 35

Total questions 36 to 45

Total Score:

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Interpreting Your ScoreScores 225-179 – This puts you far below the best scoreand indicates that you are a long way from having a BSC.You’re in good company at this level because mostorganizations have weak, disjointed, or unexaminedmetrics programs. A score in this region indicates a lackof management attention to the BSC concept.

Scores 180-134 – A score in this range puts you inabout the middle, which indicates that you are off toa good start in developing a BSC. You probably havea good set of measures for some of the categories. Youalso probably have some major weaknesses in sometypes of measures.

Scores 135 to 90 – If your score is in this region, youhave a systematic approach to measurement thatapproaches being well-balanced. Chances are youmay be weak in customer satisfaction and employeesatisfaction measures.

Scores 85-45 – If your score on this survey is in thisregion, you are well on the road to building adynamic and information-rich BSC program. At thislevel it is important to rigorously examine your BSCresults on a routine basis and maintain it and improveit at every opportunity.

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Once the Balanced Scorecard has been established(more on this later) it remains useless unless it isanalyzed on a routine basis, be it hourly, daily, weekly,monthly, quarterly, or yearly. Formal meetings arebest and should be led by the support manager withthe support management team in attendance. Thereview meeting should begin with an assessment of“leading” and “lagging” indicators in the Scorecard.“Lagging indicators without performance drivers failto inform us of how we hope to achieve our results.Conversely, leading indicators may signal keyimprovements throughout the organization, but ontheir own they do not reveal whether theseimprovements are leading to improved customer andfinancial results.” 13

Leading and lagging indicators are defined and havethe following characteristics, as listed on the followingpage in Exhibit 6 – Lag and Lead PerformanceMeasures.

13 Paul R. Niven, Balanced Scorecard, New York: John Wiley & Sons, 2002, Page 115

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Exhibit 6Lag and Lead Performance Measures

The Balanced Scorecard should contain a mix oflag and lead measures of performance. 14

14 Paul R. Niven, Balanced Scorecard, New York: John Wiley & Sons, 2002, Page 116

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Exhibit-7Sample Support Center Balanced ScorecardKey Performance Indicators.

Customer Satisfaction Goals

Total Calls Received/Month

Projected Actual Gap1500 1750 +250

Total Calls Answered/Month

Projected Actual Gap1470 1100 -370

Customer Satisfaction Rating

Projected Actual Gap90% 72% -18%

Completed Surveys


Average Speed of Answer (ASA)

Projected Actual Gap2.0 Minutes 6.25 Min -4.25

Abandoned Calls


Abandon Call %

Projected Actual Gap2% 13% +11%

Employee Satisfaction Goals

Total Direct Headcount


Employee Satisfaction Rating

Projected Actual Gap87% 69% -18%

# of Technical Staff Turnovers (Internal)

Projected Actual Gap2 2 0

# of Technical Staff Turnovers (External)


Training Hours


Avg Training Hours/FTE


# of Employee Surveys


Time to Employee Proficiency (Days)


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Cost/Productivity Goals

Number of Customers


Total Incidents Closed (Monthly)

Projected Actual Gap7,650 12,800 +5,150

Average Incidents/Customer

Projected Actual Gap50 68.3 +18.3

Average Cost/Incident

Projected Actual Gap$10.00 $33.00 +$23.00

Total Closed Incident Direct Labor Hours

Projected Actual Gap.75 2.5 -1.75

Average Cost/Customer

Projected Actual Gap$7.00 $17.00 -$10.00

Average Customers/FTE

Projected Actual Gap5.0 15 +7

Closed Incidents/FTE

Projected Actual Gap25 17 8

Organizational Maturity Goals

Executive Support of the Support Center (1-10)

Projected Actual Gap7.5 5.0 -2.5

Time to Fill Knowledge Gaps (Days)


Time to New Product Proficiency (Days)


Flexibility of Costs to Changes in Workload(On a Scale of 1 to 10)

Projected Actual Gap7.5 9.0 +2.5

Diversity (On a Scale of 1 to 10)


Formalization of IT Processes (On a Scale of 1 to 10)

Projected Actual Gap8.0 6.5 1.5

Support Center Certification Score(On a Scale of 1 to 10)


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GOALS, METRICS, & KEY PERFORMANCE INDICATORS

IntroductionCritical to the success of a support center BalancedScorecard program is an understanding of what thekey terms used in the program mean. Undertaking ascorecard program without a consensus on what thecomponents mean makes a challenging task only moredifficult. The components of the balanced scorecardare listed and defined below.

Goal – quantifiable and objectively measurable aimsof an organization; in the Balanced Scorecard serviceand support context; Customer Satisfaction, EmployeeSatisfaction, Cost/Productivity, and OrganizationalMaturity.

Scorecard – a collection of key measures that theorganization has determined are tightly linked to itssuccess or failure in executing strategy.

Metric – a metric is really a measure of anything; asystem of related measures that facilitates thequantification of some particular characteristics.

Key Performance Indicator – an actionable measurecontained in a metric; KPI’s are metrics, but not allmetrics are KPI’s.

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Successful support center balanced scorecards “…createa common language for communication and allowprocess measures to be communicated openly andcandidly. We need metrics in order to:

n Establish the difference between perception,intuition, and reality;

n Gather the facts for good decision making andprovide the basis for sound implementation forthose decisions;

n Overcome the limits to our current thoughtprocesses and move us toward boundarylessthinking;

n Identify and verify problem areas or bottlenecksthat have remained undetected;

n Better understand our processes and determinewhich factors are important and which are not;

n Characterize our processes so that we knowhow inputs and outputs are related;

n Validate our processes and determine whetherthey are performing within required specifications;

n Evaluate customer satisfaction and establish thelinks to our key processes;

n Document our processes and then communicatethem to others;

n Provide a baseline for process performance andcost correlation;

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n See if our processes are improving, and retainthe gains for those that are;

n Determine if a process is stable or predictableand determine how much variation is inherentin the process.” 15

15 Six Sigma: The Breakthrough Management Strategy Revolutionizing the World’s TopCorporations, Mikel Harry and Richard Schroeder, New York: Random House, 2000,Page 71-72.

CHAPTER 3

Steps to Implementing a SupportCenter Balanced Scorecard

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Introduction

T here is no “one size fitsall” approach to developing

a Support Center BalancedScorecard, but there are somebasics that can be applied to itsdevelopment. In a perfect world,the executive management ofthe support center would leadthe development effort and see it

through to its conclusion. If that does not happen,the support manager can still take the lead inthe effort and obtain executive sign-off on thescorecard. Even the most jaded or overworkedexecutive will appreciate the simple elegance ofthe linkage between goals, performance measures,and their impact on customers, employees,costs/productivity, and organizational effectiveness

Step 1 – Choose Your Support Center’s MetricsIn choosing the metrics that go into a BSC, it isimportant that those metrics are balanced in such a waythat they lead to the meeting of each service goal. It isnot unusual for an organization or a business tooveremphasize one metric to such a degree that meetingthe statistical target becomes an end itself; just ask thefolks at Enron and Health South how well that strategy

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works. As Mark Ellis points out in his discussion of therole of Average Speed of Answer (ASA):

…Average Speed of Answer is often misconstrued to be akey service goal. While ASA is important, and certainlyinfluences customer satisfaction, it is only a metric andnot a service goal. How satisfied would your customersbe if your help desk staff answers the phone very quicklybut can never solve a problem? Many managers struggleto improve ASA, but show only minimal improvement intheir overall customer ratings. These organizations arefocusing on the wrong thing. Furthermore, there is acrossover point at which further decreasing the ASAincreases the cost per closed service event to anunacceptable level. In one case, a company reduced itsASA from 13 seconds to 3 seconds, resulting in only a 1%increase in customer satisfaction. But because they staffedup to answer calls quickly, their excess capacity drove thecost per closed service event up by more than 40%! Thisimbalance in metrics was clearly not in the best interestsof either the help desk or its customers. 16

The surest way to avoid the missteps described aboveis to have senior management commit to the goals

16 Using Service Goals & Metrics to Improve Help Desk Performance, Mark W. Ellis,Colorado Springs: HDI, 2003, Page 14

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contained in the Support Center Balanced ScorecardService Model. The idea for the scorecard itself and itsimplementation may be the initiative of line-managers,and that’s acceptable, but the success and failure of thescorecard as a planning and evaluative tool resideswith executive management. Although they may lacka good understanding of the role of service andsupport in a business or organization, and may noteven value customer service very highly, whenpresented with the value that a Balanced Scorecardcan add to an organization’s service and supportfunction, most executives will be delighted with theinformation that they will receive. For service andsupport managers, the Balanced Scorecard can be thekey that unlocks the door to positive executiveattention, increased resources and proof of the value-added nature of outstanding service.

Step 2 – Link Measurements to StrategyBearing this concept in mind, Step 2 – LinkMeasurements to Strategy requires the answers tofour key questions that will assist in determining howperformance measures will be linked to strategy.

Kaplan and Norton present these questions in the formatcontained in Appendix 2a – Linking Measurementsto Strategy. The term “vision statement” is defined as

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an idealized scenario of what the future of anorganization or an organizational unit can become.The term “mission statement” is a definition of thegeneral field in which a firm or organizational unitwill operate. It is also the unique purpose that setsa business or organizational unit apart from othersof its type. As a practical matter, a mission statementsimply expresses why the organization exists andgives employees and customers a clear sense of whatthe organization stands for. Publix Super Markets,for example, has a powerful yet succinct missionstatement that conveys everything that employeesand customers need to know about Publix’s. It is,“To be the premier quality food retailer in theworld.” As this example illustrates, mission statementsdo not have to become a major project, they justneed to reflect the nature of the business ororganization’s business and serve as a rallying pointfor employees and a commitment to customers.

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Exhibit 8Link Measurements to Strategy 17

17 “Putting the Balanced Scorecard to Work,” Robert S. Kaplan and David P. Norton,Harvard Business Review Onpoint # 4118, September-October, 1993, Page 8.

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Step 3 – Performance Measure Data Dictionary 18

The data dictionary is literally a dictionary of theperformance measures that have been chosen. Theconcept behind the data dictionary is that a documentshould exist that clearly examines the construction,the content, and the use of each performance measure.The data dictionary can provide the backgroundneeded to explain and defend the performancemeasures that have been chosen. A successfulPerformance Measure Dictionary entry must be ableto answer the following five questions:

n Why is the measurement required?n What needs to be measured?n What is the precision of measurement required?n How will it be measured?n What use will the measurement be? To whom?19

18 The idea of a “Performance Measure Data Dictionary” was created by Paul Nivenand should be considered an essential component in validating performancemeasures and assessing their suitability for use in a balanced scorecard. SeeBalanced Scorecard Step-by-Step, Paul R. Niven, New York: John Wiley & Sons,Inc., 2002, Page 152-157.

19 “Selecting Appropriate Metrics,” Niraj Goyal, www.issixsigma.com/library/content/c020930a.asp

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Appendix 6 provides directions for compiling aPerformance Measure Data Dictionary Entry. It isstrongly recommended that this phase of the BSCconstruction process not be ignored or done ina haphazard manner. As our father’s learned inthe COBOL days, “Garbage In, Garbage Out;sometimes there are no shortcuts to solve difficultproblems or the path to success. The strength of theBSC concept resides in the capacity to connectstrategy, goals, metrics, and KPI’s together so thatthey align with corporate strategy and validatingthe BSC Data Dictionary elements is a critical pathto accomplishing this goal.

The format for the dictionary is provided on thefollowing page in Exhibit 9 – Balanced ScorecardPerformance Measure Dictionary.

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Exhibit 9Performance Measure Data Dictionary

* Polarity refers to whether a value is high or low on a scale, e.g., Average Speed ofAnswer is usually better when it is lower; 30 seconds compared to 120 seconds.First Call Resolution Rate on the other hand, is generally better when it is higher.

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Step 4 – Prepare Trend Charts, Reports, &Review QuarterlyThe Balanced Scorecard can become irrelevant if theinformation that is contained within it is not seen asactionable. To be actionable, it must be tracked overtime so that trends can be detected and analyzed andcorrective action taken. A quarterly review process fromthe support center upward to executive managementworks best with each level of management playinga role in the evaluation and review process. “Itemscovered in this operational review should include:

n The previous quarter’s operational performancen Trend lines for goals and supporting major KPI’sn Projections for future Balanced Scorecard Service

Model Goals

n Issues or concerns that may impact futureperformance

n Product roadmap and/or new service offeringsn General overview of the business by senior

corporate managementn Review of past quarterly action items and new

action items for the current period reviewn Awards and recognition for performance or

contribution to the success of the operation

Another objective of the Balanced Scorecard ServiceModel is to set long-term performance targets for theBalanced Scorecard Service Goals. The performancetargets should be aggressive but still be attainable bythe organization.” 20

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20 Implementing Service & Support Management Processes: A Practical Guide,Carrie Higday-Kalmanowitz and E. Sandra Simpson, Editors, Colorado Springs:The Help Desk Institute, 2005, Page 19

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Exhibit 10First Quarter 2005 Metrics Report

CHAPTER 4

The HDI Metrics Catalog Series

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Introduction

The intent of the Metric Series isto give strategic, comprehensive

and practical direction to supportmanagers and their executives onhow to use metrics to increaseand improve the use of supportcenter performance measures inmanaging their operations. Eachmetric in this series will be

discussed in the context of the balanced scorecard;the way each metric will be used will be dependentupon each organizations business and strategic goals.

Our goal with this series is to provide supportorganizations, metric by metric, a clear definition ofthe metric, how the metric will impact the BalancedScorecard Service Model, bring to light any warningsigns, standardize Calculation Required, provide ahow-to-implement, and highlight that it all needs tobe aligned with the organization’s strategic goal.

Anatomy of a MetricEach metric will be defined and analyzed using thefollowing format:

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Executive briefing for the metricn Metric to be examined

n Provide a definition of the metric:n Discuss why this metric, in the context of its

impact on Customer Satisfaction, EmployeeSatisfaction, Cost/Productivity, and OrganizationalMaturity, is important.

n Discuss the review of the metric; will it be reviewedhourly, daily, weekly, monthly, or quarterly; whowill review it and how will it be presented.

Definition of the metricn Definition of the metric; is it a Customer

Satisfaction, Employee Satisfaction, Cost/Productivity, or Organizational Maturity metric?

n List the source of the metricn Discuss how the metric is calculated and provide

2-3 examples of Calculation Requirements orCalculation Required methodologies

Application: How the metric can be used to managean operation

n Impact of this metric on Customer Satisfactionn Impact of this metric on Employee Satisfaction n Impact of this metric on Cost/Productivity n Impact of this metric on Organizational Maturity

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Support Scorecardn Briefly discuss the development of a Balanced

Score Card and how it can be used to monitorand manage a support operation

n Discuss the possible management actions thatmay be initiated in each Balanced Score Cardarea (Customer Satisfaction, Employee Satisfaction,Costs/Productivity and Organizational Maturity)if the metric falls below an acceptable levelof performance

Selected Industry Standard for the Metricn Cite the source of the industry standard for

the metric.n Identify and discuss success stories from

other organizations that show what a positiveperformance for this metric would look like.

Implementation Checklistn Step-by-step guide to calculating this metricn Checklist for creating a staffing/cost programn Tips for understanding a Balanced Scorecard for

support managers, executives, and others

Conclusionn Discuss the importance of monitoring the metric

for compliance, adherence, and trends.

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Example: Too few staff will decrease ASA, increaseabandon rate, retard the timely resolution ofproblems, and reduce customer satisfaction; it willfrustrate and burnout employees and erodeemployee satisfaction; it will reduce productivity;and it will reveal the immaturity of the organizationas one that is incapable of planning for the future,meeting the needs of its customers.

ConclusionThe Support Center Balanced Scorecard ServiceModel is the trend of the future. Soon to be gone arethe days when overworked and exhausted supportmanagers will be seen pouring over Excel spreadsheetstrying to justify their department’s usefulness andright to exist. With the BSC system, the work of ITand the support center will be intimately tied togetherin a symbiotic relationship devoted to customerservice, satisfaction, loyalty, and profitability.

As one author notes, “changing technologies and increasinglydiverse customer bases are driving a more thoughtfulapproach to service issues, and more specifically, to thehelp desk (and IT) function. Products are becoming morecomplex, while open architectures and networkingcapabilities have produced increased (and more intricate)interoperability among products from different vendors.

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The help desk’s customer base is expanding at both endsof the skill spectrum. Lower priced entry-level PC’s withsimple graphical user interfaces are attracting a largenon-technical audience. Meanwhile, faster and morenetworked systems are producing a new generation oftechnically skilled users outside the engineering andtechnical departments of many organizations. Coupledwith the proliferation of end-user applications, multiplesoftware release levels, and the shift of many ITenvironments to client/server architectures, this complexenvironment places a significant additional burden on thehelp desk (and the IT) staff.” 21

Companies and organizations that will not onlysurvive, but thrive in this dynamic environmentwill embrace the BSC system and enthusiasticallyembrace quality initiatives, self-improvement, anda disciplined, performance measurement-basedapproach to gathering, analyzing, and utilizingthe information gained from a BSC program.

21 “The Need to Measure Service Performance,” Mark Ellis, Industry Insider Article,HDI, February 23, 2005. http://www.thinkservice.com/industry-insider/articles/article281.htm

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Only organizations that follow this rigorous approachto measurement will be able to summon the dexterity,the creativity, and resources to move forward in thisnew century. Simple bean counting is over;disciplined, data-based analysis leading to businessand IT alignment is the future that arrives tomorrow.

APPENDICES

1 – List of Support Center Metrics

2 – Examples of Linking Measurementsto Strategy

3 – Examples of Performance MeasuresData Dictionary

4 – Example of a Quarterly Metrics Report

5 – Example of a Quarterly Metrics ReportMeeting Agenda

6 – Directions for Creating PerformanceMeasure Data Dictionary Entries

7 – Glossary of Terms

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Appendix 1 – Balanced Scorecard ServiceModel Key Performance Indicators 22

22 Implementing Service & Support Management Processes: A Practical Guide,Carrie Higday-Kalmanowitz and E. Sandra Simpson, Editors, Colorado Springs:The Help Desk Institute, 2005, Page 23.

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Appendix 2Worksheet: Linking Measurements to Strategy

What is our strategy for the Future?

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Appendix 2aExample – Linking Measurements to Strategy

What is our strategy for the Future?

Definition of Business Unit: JHJ, Inc. Support Center

Vision Statement: To exceed our customer’s expectationswith every contact.

Mission Statement: To be the vendor of choice inour industry and to distinguish ourselves by offeringthe highest quality products and technical support.

If our strategy is to succeed, how will we be different?

To OurOrganization

Costs/Productivity

Closemeasurement& evaluation ofcosts; reduction

of costs &increased

productivity inall operations

To OurCustomers

CustomerPerspective

100% customer-centric in allthat we do

To OurEmployees

EmployeePerspective

Enthusiastic,high-energy

people that lovetheir jobs

To OurOrganization’s

Capabilities

OrganizationalMaturity

Perspective

Achievementof HDI SCC &

implementationof ITIL over thenext 24 months

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What are the Critical Success Factors?

Costs/Productivity

*KPIs for eachaspect of theoperation

*Intensive producttesting & QA review

*Product testingfor all support staff

*Involvement ofsupport staff inbeta testing

*Weekly reviewof cost per call

*Identificationof lower, mediumand upper levelsof cost/call

Customer Sat.

*Call loadforecasting for eachproduct release

*Staffing CalculationRequireds foreach release

*ASA of <90seconds

*Event surveysafter each contact

*Twiceyearly customersatisfaction surveys

*Intensive customerservice skill trainingfor all support staff

*Close liaison withproject managementstaff on all problemsescalated to Level2 Support

*Daily review of“Top 10” problems

* User Gr Groupprogram

Employee Sat.

*Clear career paths

*Training inleadership andmanagement for allsupervisors & teamleaders emphasizingcommunication skills

*Monthly reward& recognitionprograms

*Training inproblem solving &troubleshooting skills

*Development &use of knowledgecentered supporttools and techniques

*Scheduledtime available &unavailable fromcustomer contact;breaks, training,professionaldevelopment

*Equitablepay scales

OrganizationalMaturity

*Use of anindustry-recognizedsupport model

*Plannedachievement ofHDI SSC and/orITIL processimplementation

*Program to obtain& sustain a diverseworking environment

*Documentedpolicies &procedures forall aspects of thesupport operation

*Comprehensivevendor managementprogram

*Quarterlybriefings for seniormanagement onall aspects of thesupport operation

*ComprehensiveBalancedScorecard program

*Routine review ofcustomer commentsrelating to productuse are reportedback to development

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Appendix 3Worksheet: Performance Measures Data Dictionary

Performance Measure Data Dictionary

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Appendix 3aExample – Performance Measure Data Dictionary

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Appendix 4Example of a Quarterly Metrics Report

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Worksheet-Quarterly Metrics Report

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Appendix 5Agenda for The Quarterly Metrics Review Meeting

Item 1: Review and discuss current quarter’s goalsand Key Performance Indicator’s.

Item 2: Review and discuss previous quarter’s goalsand Key Performance Indicator’s.

Item 3: Identify the differences between quarterlygoals and KPI’s.

Item 4: Identify, discuss, and make decisionsbased on trends identified for the quartersin question.

*What will happen over the long term if trendsare not addressed?

Item 5: Are there any issues or concerns that mayimpact the support organization in thecoming quarter?

Item 6: Is the support organization positionedto support any changes to the business’product roadmap and/or new serviceofferings?

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Item 7: Review of past quarterly action items andnew action items for the current periodunder review.

Item 8: Rewards and recognition for performance orcontribution to the success of the operation.

Item 9: Assignment Distribution: List ofassignments and staff to supporttheir completion.

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Appendix 6Directions for Creating Performance Measure Data

Dictionary Entries*

* Adapted from Balanced Scorecard: Step-by-Step. Paul R. Niven, New York: John Wiley& Sons, Inc., 2002

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Appendix 7Glossary of Terms 23

VisionA concise written statement defining the mid-longterm (3-5 year) strategy of the organization. The visionis the summary statement of how the organizationwants/intends to be perceived by the world. Thestatement is external/market oriented, brief, (1-3sentences), and stated in “visionary,” colorful terms.

MissionConcise, internally focused statement of the results(Customer Satisfaction Goals, Employee SatisfactionGoals, Costs/Productivity Goals, and OrganizationalGoals) sought by an organization or support departmentover the mid-long term (3-5 years) for each perspective.

ObjectiveConcise statement articulating a specific componentof the strategy must achieve/what is critical to itssuccess. Each perspective usually contains 3-6primary objectives that state a key aspect of thestrategy to be achieved over the next 1-3 years.

23 Adapted from Paul R. Niven, Balanced Scorecard, New York: John Wiley & Sons,2002

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Objectives are best stated as action phrases(verb/objective) and may include the means and/ordesired results as well as the action.

Key Performance IndicatorsMeasures of WHAT an organization or supportdepartment will track and trend over time, NOT theactual targets such as direction and speed. Aperformance indicator should include a statement ofthe unit to be measured ($, headcount, %, rating).

Lead Indicator (How are we likely to perform?)Measures that indicate progress against a process orbehavior. These measures are helpful in predicting thefuture outcome of an objective. For example: Hoursspent with customers; Average Handle Time (AHT).

Lag Indicator (How did we perform?)Measures to determine the outcome of an objectivethat indicate organizational or support departmentperformance at the end of a period. These areresults-oriented and do not reflect a process. Forexample, Total Customer Contacts, Total Incidents,and Total Problems.

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Polarity 24

whether a high value or a low value; reflects good orbad performance.

Processa particular method of doing something, generallyinvolving a number of steps or operations; a processconsists of steps.

Procedurean act, method, or manner of proceeding in someprocess or course of action, especially, the sequenceof steps to be followed.

Stepany series of acts, processes; a step is any seriesof processes.

24 Webster’s Collegiate Dictionary, 2nd Edition.

a reference guide to the balanced scorecard service …

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