1. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com © 2004 Accenture All Rights Reserved. Measuring Performance using Meaningful and Effective Metrics High Performance Organizations:

2. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com Agenda END GOAL ACTIONPRIORITIZE ASSESS Using categories of metrics to assess performance Metrics Tools and Options to monitor performance So much to work on, where should we focus? Stable operations Or Business growth Implements effective tools to win the race A business with high performance

3. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com Metrics should be a best practice that produces higher business performance… Hackett Defines Best Practices:  A technique that produces superior business performance, by doing one or more of the following:  Aligns with strategy  Drives greater efficiency and effectiveness  Promotes timely execution  Leverages existing, and exploits emerging technologies  Enables better decision making  Maximizes return  Ensures acceptable levels of control  Optimizes skills / capabilities of the organization  Promotes collaboration across the extended enterprise

4. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com Benchmarking  One of the best definitions remains to be Michael Spendolini’s from his 1992 The Benchmarking Book: “A continuous, systematic process for evaluating the products, services, and work processes of organizations that are recognized as representing best practices for the purpose of organizational improvement” Benchmarking, one of the best places to start measurements World Class Best Practices Improvement Over Current Practices Parity or Below Current Practices

5. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com InternalSimilar activities in different locations, departments, operating units, country, etc. Global / multi- national firm comparisons Collection strategies by division Data often easy to collect Good results for diversified companies Limited focus Internal bias CompetitiveDirect competitors selling to the same customer base Shell Exxon BP Information relevant to business results Comparable practices / technologies Data collection difficulties Ethical issues Antagonistic attitudes FunctionalOrganizations recognized as having state-of-the- art products, services, processes Pipelines Refineries Distribution Usage of technology Third party outsourcing High potential for discovering innovative practices Readily transferable technology / practices Development of professional networks Access to relevant databases Difficulty transferring practices into environment Some information not transferable Time consuming TypeDefinitionExamplesAdvantagesDisadvantages Three Types of Benchmarking Benchmarking is typically a mix of leading practices and key metric measurements

6. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com The standards of a good metric… Dynamic Timely Manageable Easy To Measure Simple To Understand Impact Good Metrics move up and down, they are not always constant Good Metrics provide timely information. They do not report on issues that are already outdated. Good Metrics “Move the Needle” Good Metrics provide actionable information that drive Business decisions Source: Accenture

7. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com Taking a look at our world using our category framework of measurements… Time – cycle times for activities Return – evaluation of cost vs. benefit Capacity – not too much idle, enough to support growth Satisfaction – customers, employees, vendors Coordination – seamless handoffs across individuals, systems, organizations, processes Moods – driving stories of success or failure Quality – compared to acceptable standards and criteria already established 360 o Insight Financials Customers Suppliers Competitors Operations Employees There are so many value drivers in our organizations, how do we measure performance?

8. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com FY 2007 Yr 0 Breakeven Analysis Financial Summary In k dollars $ Option 1 Option 2 Key Assumptions NPV: Break Even Point: $343K 4.1 yrs $450K 5.1 yrs Est. Cost Summary Facility Equipment $4.8m 3.8m 1.0m $3.4m 2.4m 1.0m Est. Benefits Summary Production Hours Capacity increase 5 20% 3 35% FY07 Yr 0 Risk Adjusted Discount Rate: 10% you can measure it in terms of money or monetize time or lost opportunity Prioritizing projects and areas of focus starts with ROI and risk if…

9. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com High High Cost/ Complex Value Low Low Cost/ Complex Ability to Realize Evaluating Options and Priorities in cases of “soft dollars” Return A/P Module Processes Capacity HC-A/R XXX 2 Day Close Payroll System Capacity HC Capacity HC Capacity HC-GL

10. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com Measuring results based on audience capacity to act

11. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com Revenue Commentary: Project Update Analysis of Results Plan Adjustments, etc. Measuring results based on audience capacity to act

12. All rights reserved E-Mail: info@cfo-network.com | Phone: 858-695-1745 | Website: www.cfo-network.cominfo@cfo-network.com PerformanceMetric Strategy Factor BasicThreshold Above AverageLeadingRecent Industry Quartile Aspirational Target Industry Quartile Date to Achieve Internal Client Satisfaction Results ( Quarterly Survey) 65%4th1st2009 Meet Service Level AgreementsN/A2nd 2008 Reports on ScheduleTBD4th3rd2008 Reports AccuracyTBD2nd1st2008 Skill set Avg. High level Acct.50%4th1st2010 Lost Workdays/Absent0.564th1st2009 Internal Employee Satisfaction (Quarterly Survey) 70%3rd2nd2009 Satisfied Customers Dedicated Employees Measuring results based on audience capacity to act Current performance goals