Portfolio Scorecard Methodology

Portfolio Scorecard Methodology

• 1.
  Steve Lewin 10September 2009
• 2.
  Analyze Benefits AnalyzeBarriers Determine Time Criticality Assign Weighting Score Initiatives Prioritize Initiatives Assess Individual Initiative vs. Hurdle Reassess initiative performance
• 3.
  High Low HighMajor Initiatives “ Low-Hanging Fruit” Low Non-justifiable Secondary Initiatives Barriers (CSF’s, Costs, External Risks) Benefits (Quantifiable, Subjective, Intangible)
• 4.
  High Low HighMajor Initiatives “ Low-Hanging Fruit” Low Non-justifiable Secondary Initiatives Barriers Benefits Rewards & Risks can change over time (note initiative A to A’). Time A A’
• 5.
  Quantifiable Incremental Revenue/ Market Share ROI Profit Improvement Productivity Improvement Cost reductions Cost avoidance
• 6.
  Tangible / Non-QuantifiableRegulatory compliance Quality improvement Customer Satisfaction increase Service Level Improvement Cycle Time improvement Intangible Environmental impact Public relations (external image) Employee satisfaction
• 7.
  Critical Success FactorsData Collection Technological Feasibility System Implementation Organizational Support Management Commitment Cost or Difficulty of Implementation External Risk Factors Competitor actions Economic conditions Obsolescence
• 8.
  Sensitivity to: MarketShare implications Risk as a factor of timing Calendar implications Competitor initiatives Workload result on delivery Coincidental product and service introductions Econometric variables
• 9.
  Use Relative Index(0-1) Utility application by consensus Select “key” measures for initiatives Develop Analytical Hierarchy of Performance Measures Adapt for Management priority Identify Mission-critical vs. “Nice-to-have”
• 10.
  Benefits Determine $’sand $ equivalents (for non-quantifiable) Apply weight for relative importance Develop cumulative benefit index (1-100) Barriers Determine cost or cost equivalence Weight by criticality Factor by risk Develop cumulative barrier index
• 11.
  Aggregate Index BuildMatrix (Benefits to Barriers by initiative) Normalize Develop relative score Synergy Incremental additive effort to perform one analysis in conjuction with another (0 to 1) Default = 1 If synergy exists, subsequent effort for secondary initiative reduced
• 12.
  Adapt factor weightingsGroup by time frame Prioritize by aggregate index Schedule based on available budget Reassess on quarterly basis
• 13.
  Methodology Quantify benefitsin $’s by year Expected / High / Low Estimate implementation and operating costs in $’s by year Expected / High / Low Determine ROI Range Compare to hurdle rate Assess Risk Determine Risk / Reward Value Recommend further study or table initiative
• 14.
  Post-Implementation review atquarterly intervals Compare projected volume to actual Determine reasons for variance If applicable, revise forecast Update measures and weights based on confidence levels