Identifying Key Performance Indicators

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Identifying Key Performance Indicators

• Jeff Porada
• VP, Operational Quality
• Wyndham Consumer Finance

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Wyndham WorldwideBusiness Overview
Wyndham Worldwide WYN

• Worlds largest vacation ownership business with
  more than 18,000 units, approximately 145 resorts
  and over 800,000 owners
• Leading provider of points-based timeshare
• 42 of WYNs 2007 combined segment EBITDA(2)

• Worlds largest vacation exchange network with
  nearly 3.7 million members
• Leading European Vacation Rentals Group with more
  than 67,000 properties
• 33 of WYNs 2007 combined segment EBITDA(2)

• Worlds largest lodging franchisor as measured by
  the number of franchised hotels with approx.
  551,500 rooms and 6,560 properties
• Worlds largest lodging loyalty program, based on
  number of participating hotels.
• 25 of WYNs 2007 combined segment EBITDA(2)

Wyndham Worldwide is one of the worlds largest
hospitality companies with over 4.3 Billion of
Net Revenues (1) in 2007

1. Includes Corporate and Other
2. Combined segment EBITDA percentages calculated
   excluding Corporate and Other

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Gaining New Knowledge

• You can know all there is to know about
  something except how to improve it. That
  requires a different set of skills, it requires
  new knowledge. A System (Process) cannot improve
  itself. That knowledge comes from outside the
  system, and only by invitation.
• W. Edwards Deming

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Process Management4th Generation Management
QUALITY
Joiner Triangle
SCIENTIFIC METHOD
ALL IS ONE
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What is Process Excellence?

• Process Excellence is a systematic method to
  measure, analyze and improve business processes
  to identify critical areas that can cause
  breakthrough results in market penetration,
  organizational speed, and the cost of doing
  business.

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Process Excellence Change Model
PerformanceScorecard Review
Where Are We?
PE Improvement Methodologies
Strategic Planning
Process Mapping and Documentation
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Why Measure?

• Establish the current performance level
  (baseline)
• Determine priorities for action and whether or
  not to take action
• Substantiate the magnitude of the problem
• To gain insight into potential causes of problems
  and changes in the process
• Prevent problems and predict future performance

To gain knowledge about the problem,process,
customer or organization
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Categories of Performance Metrics

• Developing input, process and output metrics
  around the customer expectations and process
  performance needs is a good starting point for
  determining what to measure

• Speed
• Quality
• Cost
• Service Safety
• Corporate Responsibilities

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Measuring Business Processes
X - PREDICTOR (Leading) MEASURES
Y - RESULTS (Lagging) MEASURES
(X)
(Y)
(X)
Input
Output
Process

• Customer Satisfaction
• Total Defects
• Cycle Time
• Cost Profit

• Arrival Time
• Accuracy
• Cost
• Key Specs

Time Per Task In-Process Errors Labor
Hours Exceptions
How well do these
predict these?
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Typical Output Measures
Product/Manufacturing Paper Thickness, fiber content, strength, weight, color, cost/roll
Product/Manufacturing Banquet Number of missing/incorrect place cards, seating time, delivery time, accuracy (food/beverage order)
Service/Transactional/Administrative LoanClosurePapers Cycle time, accuracy ( of errors), completeness ( of items missing), total loans closed
Service/Transactional/Administrative RoomService Delivery timeliness, accuracy, temperature
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Operational Definitions

• What it is...
• A clear, precise description of the factor being
  measured
• Why its critical...
• So each individual counts things the same way
• So we can plan how to measure effectively
• To ensure common, consistent interpretation of
  results
• So we can operate with a clear understanding and
  with fewer surprises

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Graphical Techniques

• We can describe the behavior of any process or
  system by plotting multiple data points for the
  same variable
• Over time
• In relation to other values in a data set
• The data values can be represented by pictures
• Run charts
• Box plots
• Dot plots, histograms, scatter plots
• PARETO charts

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Helpful Hints

• Identify between 6 9 KPIs, balance between
  leading lagging indicators
• Use SMART (specific, measurable, attainable,
  realistic, time bound) when selecting your
  metrics
• Ensure the data you are collecting is accurate,
  MSA

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WVO ExamplesConsumer Finance ? Title Services
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Wyndham Consumer Finance2008 Objectives and
Measures (Highest Level)

• Enhance customer ability to purchase

• Finance 66 of sales revenues
• Implement non-core lending programs that support
  30Million in sales

• Drive cash flow earnings

• Generate gt 1Billion net cash by leveraging the
  receivable portfolio to 65
• Grow WCF earnings 10 and Net Interest Income
  to 265Million

• Deliver on our commitments to customers and
  investors

• Improve Blended Service Level Score by 100bps
• Meet all reporting, delinquency, default
  repurchase securitization covenants

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Wyndham Consumer Finance Performance Dashboard
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Title Services SIPOC
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Title Services Operational Definition
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Title Services Key Performance Scorecard
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Title Services Key Performance Scorecard