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Performance Management Overview

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1 Performance Management Overview
Pennsylvania Banner Users Group 2008 Fall Conference Performance Management Overview # of ODS clients # of EDW clients Role IT? User? Who am I? Mike Salisbury BPRA Product Manager SunGard Higher Education 1546 1

2 Topics Why Performance Management? What is Performance Management?
What is a Key Performance Indicator (KPI)? What is a Scorecard? What is a Dashboard?

3 External Pressure to Perform
Policymakers highlight six key performance challenges for higher education today: LEARNING OUTCOMES Measure and report student progress and learning outcomes; perform research that benefits society PROGRAM EFFECTIVENESS Respond to learner, market and workforce needs with appropriate programs and services COST MANAGEMENT Stabilize operating costs; increase productivity; grow income or revenue ACCOUNTABILITY Let’s talk about some of the forces exerting pressure on US higher education institutions to address performance and accountability issues. Drawing from the collective work of education policymakers, we can sum up the spectrum of pressures facing higher education with six key performance obligations expected of institutions, in the areas of accountability and access. Learning Outcomes: Measure and openly report learning outcomes in ways that permit comparisons among peer institutions. Specific examples: Improve retention and graduation rates. Measure student learning and benchmark the results with peers. Assess using independent instruments, such as the Collegiate Learning Assessment. Program Effectiveness: Respond rapidly to economic development and workforce needs with appropriate degree and certificate programs. Specific examples: Public and nonprofit higher education can do better at offering degree programs at the capacity required to meet local, state, and national needs for school teachers, health-care professionals, engineers, scientists, IT professionals, etc. Cost Management: Reduce or stabilize per-student operating costs (to increase institutional productivity). Specific examples: Per-student operating expenses have been increasing at an unsustainable average annual rate in the 4%-5% range. While productivity has risen for years in almost all sectors of the economy, higher education’s productivity has decreased. Affordability: Reduce or stabilize inflationary tuition increases to keep college affordable to all qualified students. Specific examples: The average annual increase in tuition has exceeded the Consumer Price Index for years, making it difficult for lower and middle income students to afford college. Because higher education tends to focus on revenues rather than costs, they also tend to focus on replacing public revenue shortfalls rather than increasing productivity to control tuition inflation. Convenience: Offer students more convenient, flexible options for accessing education and completing a degree or certificate. Meet expectations of students, alumni and other stakeholders for how they engage with your institution, get information and services, and benefit from a lifelong relationship. Specific examples: Because of work and family responsibilities, transportation, and other limitations, a growing number of non-traditional and part-time students can’t pursue higher education unless their programs maximize online self-service instruction and student services, as well as real-time electronic access to faculty and staff. Even residential students expect the convenience of “flex” programs and services. Capacity: Manage the number, quality and diversity of your student body in response to demand. Provide more and better services to a wider audience. Specific examples: Bottleneck courses and programs where demand exceeds the number of seats available. Limitations in faculty and classroom capacity. Increasingly diverse students bring diverse needs that higher education needs to support. Meet the challenge of providing information and services to a variety of audiences: prospective and current students, employers, families, alumni, staff members, faculty members, friends and community, etc. Do any of these challenges look familiar to you or to parts of your organization? Most or all of them probably do, because these are all basic, essential business challenges for virtually every college or university. AFFORDABILITY Keep college affordable for all qualified students; optimize financial aid and pricing strategies CONVENIENCE Offer more flexible options to access education, complete degrees, and engage learners CAPACITY Manage enrollment, diversity, and demand; reach more people, more effectively ACCESS

4 Information Needs are Crucial and Pervasive
Information and business intelligence required to address key performance challenges: Executives: monitor progress towards strategic plan and institutional goals Administrators: increase departmental effectiveness, manage costs and monitor day-to-day operations EM/Admissions Officers: improve yield and monitor progress towards recruitment goals and objectives Registrars/EM/Student Services Officers: improve student engagement, retention and persistence Advancement officers: measure the progress and effectiveness of their fundraising programs Institutional Research: guide institutional planning and to support reporting and compliance IT: meet stakeholder needs for enterprise intelligence and reporting 4

5 Improving Performance Requires Organizational Alignment
Align the organization to strategic goals Link managerial action to accomplish those goals Align budget requests and funding to the desired outcomes Leaders Are Focused on Difficult Strategic Issues Monitoring ongoing effectiveness of recruitment campaigns Matching enrollments with institutional programs Recruiting best qualified applicant pool Responding to demand for increased accountability Leaders Have Strategies to Solve These Issues Strategies identify goals, objectives and desired outcomes Execution of strategy is essential for success Supporting these efforts requires an agile and adaptable management structure. As in business, the chal­lenge lies in creating structures that allow for sufficient control at the top but leave enough autonomy to support the unique and sometimes divergent academic missions of each unit.

6 What is Performance Management?
A disciplined approach to understanding, monitoring and managing drivers of performance of organizations. It leverages performance management methodologies and business intelligence capabilities. “Performance Management is a focused and specific type of BI initiative when it integrates performance management users, processes and metrics with analytic applications and the underlying BI platform and infrastructure.” – Gartner Group So what does this mean to a institution? Technology is considered a tool that enables strategic planning, but requires significant planning and processes to be in place to be effective "Performance management" initiatives, such as a stand-alone balanced scorecard initiative, sometimes exist outside the realm of an overall BI strategy. However, this approach usually struggles to drive performance management into day-to-day operations because of the lack of any integration with the systems used to manage performance at an operational level. As a best practice, organizations must consider BI and performance management together to emphasize the need for organizations to consider the broader vision and portfolio of pervasive BI, and to reflect the increased focus and interest on performance management.

7 What is Performance Management?
Clarification of vision and strategy across silos Translation of strategy into operational terms using scorecards Comprehension and alignment of multiple perspectives, all of which are vital to the institution Alignment of internal activities with the strategic plan Fostering employee abilities and commitment to objectives Defined measures of performance and target called key performance indicators Driving Decisions Based on Data Easy accessibility to “single version of truth” by all information consumers using BI technologies such as dashboards Line-of-sight across business processes to the status and trends key performance indicators Culture of using information in the planning and decision-making process  Clarification of vision and strategy across silos Translation of strategy into operational terms using balanced scorecards and strategy maps Comprehension and alignment of multiple perspectives, all of which are Alignment of internal activities with institution mission and strategy Fostering employee abilities and commitment to objectives Defined measures and targets Leveraging of Business Intelligence tools Easy accessibility to “single version of truth” by all information consumers Multidimensional view of information, scorecards, dashboards Trend analysis, alert mechanisms

8 Business Intelligence Needs for Performance Management
EXECUTIVES: Need visibility into progress towards our goals, objectives “Am I achieving my goals?” Performance data Scorecards, Executive Dashboards MANAGEMENT: Need timely trends, summaries, analytics of our operations “How am I doing?” “What should we be doing?” Trend, summary data KNOWLEDGE WORKERS: Need to analyze trends and root causes “Why is this happening?” Operations Dashboards Analysis Tools The common component to measure, account for and improve performance is timely access to accurate information. These means access to information that contains details for staff while providing summary information, trends, and analytics for operations to management and visibility into progress towards institutional goals and objectives at the executive level. Scorecard Network of metrics, thresholds, history, and accountabilities that connect strategy to individuals – “Am I achieving my goals? OLAP Analysis Analyze trends and root causes by ad-hoc data navigation - “Why is this happening?” Dashboard Compound, visual report – “How am I doing” Reporting Summary report – “What is going on?” - “What do I need to do?” Higher Education is facing a variety of pressures that tie to how well institutions measure, account for, and improve performance. The common component to measure, account for and improve performance is timely access to accurate information. These means access to information that contains details for staff while providing summary information, trends, and analytics for operations to management and visibility into progress towards institutional goals and objectives at the executive level. It is information that can be transformed into the information needed at all levels of the institution while providing the tools for detailed drill down. STAFF: Need detailed reports in many formats and ad-hoc access “What is going on?” “What do I need to do?” Detailed data Detail Reports Basic Report Tools

9 Performance Management Process
Review and Plan Performance Information Because Higher Education has so many complex and inte­grated management processes, it could derive more bene­fit from responding to the implications of Business Performance Management for structuring its information structures than would their business counterparts. The central circle of insight, the shared information in the Business Performance Management diagram, represents the key to real informa­tion flow. We pull information out, manipulate it and create something new, and finally, put this new information back note that the flow arrows in the Business Performance Circle point in both directions, we see the indications of a continuous collabo­ration of information consumption and supply. In fact, management activities rarely proceed in an orderly fash­ion or in any one linear direction. Report and Analyze Monitor and Measure

10 PM Process Example: Recruiting and Admissions
Review and Plan Enrollment Levels Campaigns Financial Aid Levels Performance Information Report and Analyze Monitor and Measure Yield rates, Trends and Causes Campaign Effectiveness KPIs vs. External Benchmarks Track Enrollment Funnel Recruiting programs Budget Execution

11 PM Process Example: Advancement Campaign Management
Review and Plan Budget Expectations Fund-Raising Campaigns Capital Campaign Targets Performance Information Report and Analyze Monitor and Measure Accounts to Donors Financial Statements Variances and Trends Spending Patterns Campaign Effectiveness Budget Execution

12 PM Process Example: Grant Management
Review and Plan Grant Budget Expectations Indirect Cost Recovery Rates Grant Expense Timing Performance Information Report and Analyze Monitor and Measure Effectiveness/Burn rate KPIs, Trends and Variance Granting Agency reports Proposal pipeline Grant Spending Indirect Cost Recovery

13 Performance Management Example
Profile Land grant institution Carnegie Doctoral/Research-Extensive 4 affiliated community colleges Headcount 26,000 FTE 16,500 Banner UDC client Banner Data Warehouse (ODS, EDW) client Performance Management Challenges Strategic plan lacked benchmarked performance metrics and link to budget allocation process Instruction and General budget process driven by state appropriation incentives received Multiple years of flat enrollment Absence of budget reallocation mechanism

14 Performance Management Example
Strategic Budgeting Develop base budget at a percentage of actual revenue produced Reserve unallocated revenue for strategic growth investments Increase unrestricted revenue independent of operating costs Instructional Planning Link college budgets to instructional credit revenue Examine faculty workload and use of adjunct faculty Align quantity of faculty positions to departmental workload Focus budget allocation on enrollment growth and management goals Compensation Budgeting Benchmark compensation to peers Evaluate financial impact of union proposals Examine and forecast benefit costs Benchmark budgets to peers Examine faculty and staff compensation for equity Research Strategy Review research revenue, subsidies and the support it provides for administration and growth of institution Examine cost share, cost recovery, research workload and student support provided Total Revenue Operating revenue (includes GASB non-operating revenue) Other revenue (capital, gain on permanent endowments) Operating Revenue Restricted operating revenue (gifts, grants, contracts, federal appropriations) Unrestricted operating revenue (state appropriations, tuition and fees, sales and service, indirect cost recovery) Unrestricted Revenue – 54% of total revenue State Appropriations - 57% Primary (Instruction, Academic Support, Student Services, Institutional Support, Operations/Maintenance) Earmarked (Research, Public Service, Dept Agriculture, Athletics) Tuition and Fees - 20% Sales and Services - 13% Indirect Cost Recovery - 5% Other Revenue – 5% State Appropriations for Instruction Nine factor matrix Lower, upper, graduate division Tier 1/2/3 Ranges from approx $125/hr to $1500/hr Enrollment-based increases require either a 3% increase in student credit hours or workload dollars generated from the base year Enrollment-based decreases require a 5% decrease in student credit hours from the base year Salaries and benefits are 65% of operating expense Benchmarked analysis of all staffing structures Full compensation review in progress Review of fixed costs and appropriate funding sources Hold budgets to revenue-based allocations Freeze I&G support budgets pending workload adjustments

15 Metrics OK – I know I want performance management, but what should I measure?

16 “What gets measured, gets done.”
What is a “KPI”? Viability/Productivity ! EFTS demand, total and first year. Retention Quality ! Demographics: Student intake quality. Geographic origin ! Academic Performance: Clearance rates/progress rates and completion ! Programme income and costs ! Progress to employment and further study ! Student satisfaction/course experience Smyth, AAIR Conference Division Level ! EFTS ! Income and expenditure ! $ Resource use ! Productivity of space ! Academic FTE ! Number of classes taught and class size Research ! Publications and premium publications ! Research contract income ! Thesis supervisions ! Subject evaluations ! Pass rates To these, we add some institutional indicators – such as assets per EFTS and market share – together with some benchmark data derived from annual reports and Ministry of Education statistics. We also look at indicators of performance in support units. “What gets measured, gets done.”

17 10 Characteristics of Effective KPIs
Aligned Always aligned with your institution’s strategy and objectives Owned Someone must be accountable Predictive “Leading” indicators of desired performance Actionable Timely data, providing owners and managers with opportunities to intervene and impact Easy to understand Definition, trends and status should be obvious to user The literature abounds with good advice on the construction of PIs.6 A balanced set of KPIs will: ! include key non-financial measures, as well as financial; ! be derived from the organisational mission and strategy and from the objectives that flow from them; ! be detailed, relevant, reliable, understandable, valid, readily updated; ! be focussed on critical success factors; ! be within the power of the unit concerned to influence; ! be results-oriented and able to guide improvements; ! be few enough to be manageable; and ! be many enough to embrace the diversity of the organisational critical success factors.7 There is a balance to be struck between complexity and simplicity Source: Performance Dashboards, Eckerson

18 10 Characteristics of Effective KPIs
Few in number! Too many = loss of focus As few as reasonably possible Balanced and linked KPIs should balance and reinforce each other Don’t create KPIs that undermine others Trigger changes Measuring should enable insight leading to positive changes Standardized Calculations, numbers, assumptions should be the same across the institution so that metrics can be compared Context driven KPIs tailored to user roles and their processes Provide targets and trends to see where you are and in what direction you’re headed Exaxmple: maybe 20/1 is the right faculty/student ratio? Maybe 19/1 is better but at some point the cost to achieve that skyrockets while the service you’re providing may not imporve Data without context is meaningless- for example if you just compare Retention between one institution and another it’s not going to give You the whole story because the profiles of the student population aare Relevant too (part-time vs. full-time, % that work, socioeconomic status) Source: Performance Dashboards, Eckerson

19 Pitfalls of KPIs Less is more Have one version of “the truth”
Too many metrics will cause metric overload and nobody will use them Have one version of “the truth” Indicators need to be looked at as a group Cannot focus on one area at expense of others People start making decisions that undermine other KPIs Performance indicators don’t tell the whole story Show trends but not why trend is occurring Be wary of simplistic comparisons Explore the drivers of performance for comparative insight Longitudinal analysis more robust than lateral comparisons Performance indicators cannot tell the whole story. Certainly, an indicator will rarely tell you WHY a trend is occurring. Rather, it will tell you THAT the trend is occurring. To find out why requires an altogether different type of process. Here is a (non-exhaustive) list of aids to interpretation: ! An indicator, however well constructed, can tell you only so much. Do not mistake the performance indicator for the performance itself. An indicator is just that; a window to a slice of a process. In most cases, performance in the process as a whole is best assessed by reading the whole basket of related indicators. ! Valid comparisons can be made laterally – between institutions or between units – only provided the definition of the underlying data elements is consistent. But be wary of facile comparisons; there will be drivers of performance that qualify simple comparatives and these need to be explored and articulated if comparison is to be meaningful. Comparisons are much more robust if they are longitudinal, rather than lateral. ! Someone involved in PI analysis and interpretation needs to understand the processes used to collect the data elements so as to be aware of the extent to which (for instance) process changes subtly alter data, so as to contribute cognisance of the robustness of the data elements and so as to ensure that comparisons are made with due care. ! Remember that PI will not tell the whole story. It is conceivable that good PI measures could mask weakness. There is a danger that managers could manage to PI, not for performance.

20 KPI Example Graphic display of progress towards plan, goals, objectives How many applicants have we received compared to our plan? Is the number of applicants with ACT > 26 less than expected? How close are we to our target for Nursing Program applicants? Numbers specifically selected to match your teams strategy

21 Scorecards and Dashboards
OK – I know my KPIs, but how do I monitor our status and progress on achieving our goals and targets….

22 Scorecards vs. Dashboards
Monitor the execution of strategic objectives and initiatives Network of metrics, planning targets, thresholds, history, and accountabilities that connect strategy to individuals Often deployed using a formal methodology such as the Balanced Scorecard Emphasize collaboration Dashboard Compound view of performance information made up of scorecards, graphs, and summary views Monitor overall performance daily at a glance Provide data visualizations of performance status and trends Personalized for user The sweet spot for dashboards tends to be in the aggregation and monitoring activities. Users have the ability to look at an intuitive visual report (dashboard) with a range of charts, maps and gauges that provide drill down and drill through capabilities. The scorecards provide the ability to truly measure and manage the key performance indicators. Organizations can assign targets and owners to every metric. They can then begin to manage improvement through history trends, strategy maps and cause and effect diagrams that highlight relationships between metrics and objectives. Both provide data navigation and analysis capabilities so that users can quickly analyze root causes and effects as well as identify the impact of performance problems

23 Scorecard Example Begins with institutional plans
Performance measures identified to monitor progress

24 Scorecard View Goals, objectives, performance targets configured into Scorecard Assessment of progress provides visibility into performance Executives <click> on a goal or objective to learn more about related performance outcomes and key initiatives Goals Graphic display of progress towards plan, goals, objectives How many applicants have we received compared to our plan? Is the number of applicants with ACT > 26 less than expected? How close are we to our target for Nursing Program applicants? Numbers specifically selected to match your teams strategy Objectives Assessment of progress towards goals and objectives

25 Scorecard Example Objectives enable executives to monitor progress towards related Key Performance Indicators (KPIs) and initiatives Graphic display of progress towards plan, goals, objectives How many applicants have we received compared to our plan? Is the number of applicants with ACT > 26 less than expected? How close are we to our target for Nursing Program applicants? Numbers specifically selected to match your teams strategy

26 Scorecard Example KPIs have targets, actuals, assessments, management comments Actual values loaded from data warehouse foundation Drill-down to reports and analytics Graphic display of progress towards plan, goals, objectives How many applicants have we received compared to our plan? Is the number of applicants with ACT > 26 less than expected? How close are we to our target for Nursing Program applicants? Numbers specifically selected to match your teams strategy

27 Scorecard Example Initiatives and Milestones Are Also Monitored

28 Dashboards Different dashboards for different purposes and user types
Strategic Executives, managers Tactical Managers, analysts Operational Supervisors, specialists What key areas require attention? What are the contributing factors and effects? Where are the problems focused? Who is effected?

29 What Makes a Good Dashboard?
Fits Role of Target User What are the most important business questions they need to answer? What KPIs are they accountable for? How much time is spent on monitoring vs. analyzing vs. collaborating? Meets performance monitoring needs What is the time horizon they monitor (hourly, daily, year-over-year)? Which KPIs are leading (process) vs. lagging (outcome)? What is the highest meaningful level of detail? Provides easy data navigation/analysis What type of visualization or chart is appropriate for the user? Which KPIs should have their trends compared? What is the lowest level of detail needed to analyze cause-effects? Dashboards are not one size/fits all Dashboards need to be tailored and flexible

30 What Makes a Good Dashboard?
Monitor overall performance at a glance Multiple charts provide coverage of all KPIs Charts highlight good and bad performance exceptions Data is refreshed at required frequency Navigate and filter data to analyze trends Population filters are simple to apply and shared Drill-down navigation paths are intuitive Level of detail required for cause-effect analysis available Support for collaborative, data-driven decision-making Views and analysis can be shared Level of detail for taking corrective actions available Dashboards are not 4 reports on a page Dashboards need to be dynamic

31 Dashboard Example Personalized view of KPIs
Multiple charts provide status at-a glance Leading and lagging indicators of performance Common KPI and business rules definition This is meant to look like a dashboard, also an example. You can see the needles on the gauges, and a red/yellow/green area indicating where that is. Dashboards tend to be used where performance is dynamic. An example may be a call center with call wait time. If the average should be a minute or less, but the dashboard may show that measure on a daily basis to see how things are going. Consider: there may be strategic, tactical and operational performance management. The dashboard is more tactical. Dynamic charts along with data drilling navigation to analyze trends further

32 Good Performance Management Solutions
Aligns the organization Strategy has driven development of objectives and measures Common KPI definition with shared dimensions Monitors Key Performance Indicators (KPIs) of both strategic and operational performance Sets targets for measures that are achievable Enables understanding of what’s important and what’s changed Promotes proactive versus reactive decision making Crystallizes “single version of the truth” Reduces time and effort required to answer ad-hoc questions Exposes business trends sooner and supports shortened decision cycles Allows management by exception Based on data warehouse foundation Reduce risks to development and deployment Acceleration of ROI Designed for analytics performance Use of architecture best practices for scalability and extensibility

33 Our Unique Solutions SunGard Higher Education understands these emerging performance obligations and related information requirements We offer multiple levels of solutions for accessing, managing and analyzing key performance data for institutions of Higher Education Banner Data Warehouse Solutions Packaged Performance Management Solutions Banner Performance Reporting and Analytics is our foundation that enables all levels of staff to create their own reports, analytics and ad-hoc queries Creates a single version of the truth - pre-built data integration with Banner provide data integrity, security, quality, and accuracy. Create a single, trusted source of institutional data enterprise-wide, quickly and easily. Designed for Higher Education - data warehouse configures data to answer key questions across wide range of institutional processes. View your performance from summary through to detail, from any perspective, or across departments. Short time to results - rapid deployment gives you answers to key questions in the shortest time, provides quick wins and minimize impact on your infrastructure An institution-wide solution that can be implemented in phases, all at once or just for a single organization or business function. WSU Peer clients Auburn Mississippi State Colorado State Purdue Texas A&M Tennessee Board of Regents, system

34 Performance Solutions Bringing Value to All Levels of the Institution
Data EXECUTIVES Scorecards for Performance Management MANAGEMENT Dashboards, Reports and Analytics to Monitor Progress Trend, Summary Data KNOWLEDGE WORKERS Ad-hoc analysis tools to identify and understand trends Detailed Data STAFF Production reports and ad-hoc access for daily operations 34 March 28, 2017 Confidential and Proprietary Information – SunGard Higher Education, Inc

35 Open to the Floor Questions Comments

36 SunGard Higher Education
Thank You! Mike Salisbury Product Manager SunGard Higher Education

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