A ppend ices
Appendix 1: Bibliography
Appendix 2: Interview scheme Organizational diagnosis Appendix 3: Interview Scheme Performance
Appendix 4: Field Systems
Appendix 5: Performance indicator worksheets Appendix 6: PAS processes
Appendix 7: Brainstorm session material Appendix 8: Performance indicator worksheets
A ppen di x 1: Bibliograph y
Baldauf et al. (2005) Sales Management control research – Synthesis – and agenda for future research, Journal of Personnal Selling & Sales Management , , Vol. 25 Issue 1, p726.
Bascal, R. Prestatiemanagement /; [vert. uit het Engels: R.J.W. Beuker ; ill.:
Jan Zandstra], Robert Bascal; R.J.W. Beuker, (2001), Schoonhoven : Academic Service.
Band, W. (1990) Performance metrics keep customer satisfaction on track, Marketing News (MNW) 12.
Cowen, S.C. & Middaugh, J.K. (1990). Matching an organisation’s planning and control system to its environment, Journal of general management. Vol 16, No. 1.
Chenhall, R.H, Management control systems design within its organizational context: findings from contingencybased research and directions for the future (2003) Accounting, Organizations & Society, , Vol. 28 Issue 2/3, p127168.
Cummings, G.C. & Worley, C.G., (2001).Organizational development and change, 7 th ed. South Western College Publishing, Mason, Ohio.
Ed. by Epstein M.J. & Manzoni, J.F. (2004) Performance measurement and management control : superior organizational performance Amsterdam : Elsevier JAI.
Folan, Paul; Browne, Jim (2005), A review of performance measurement:
Towards performance management. Computers in Industry Vol. 56 Issue 7, p663680.
Kald, M. et al. (2000) On Strategy and Management Control: The Importance of Classifying the Strategy of the Business. British Journal of Management, Vol. 11 Issue 3, p197212.
Kenneth A. Merchant, Wim A. Van der Stede (2003) Management control systems : performance measurement, evaluation and incentives, Harlow [etc.] : Financial Times/Prentice Hall.
Laserre, P. (2003) Global Strategic Management, Palgrave Mc Millan New York.
Leeuw, de, A.C.J. (2001), Bedrijfskundige Methodologie, Management van onderzoek. 4 th ed. Assen: Van Gorcum.
Leeuw, De A.C.J., (2000) Bedrijfskundig management, Primair proces, strategie en organisatie, Assen: Van Gorcum.
Najmi, M. et al., (2005) A framework to review performance measurement systems, Business Process Management Journal, , Vol. 11 Issue 2, p109122.
Nijhuis, van C. et al. (1996) Interne berichtgeving, spiegel voor de organisatie, Kluwer Bedrijfswetenschappen, Deventer.
Otley, D. (1999) Performance management: a framework for management control systems research. Management Accunting Research. Vol. 10, pp.
362382.
Porter, M. 1985, Competitive Advantage: Creating and Sustaining Superior Performance, New York, Free press.
Rouse, P. & Putterill, M, An integral framework for performance
measurement. Management Decision, 2003, Vol. 41 Issue 8, p791805.
Saher, E. et al, Werken met de Balanced Score Card, 2001, Kluwer.
Simons, R. (1995)Control in an Age of Empowerment. Harvard Business Review, Vol. 73 Issue 2.
Tuomela, T. S. (2005), The interplay of different levers of control: A case study of introducing a new performance measurement system. Management Accounting Research, Vol. 16 Issue 3.
Ulric J. et al. (2005) Accounting Information Systems.6 th ed. Mason Ohio, Thompson / South Western.
Verschuren, P.J.M., (2002)De probleemstelling van een onderzoek, Het Spectrum, , 8th ed.Utrecht.
A ppen di x 2:
I nter view sch em e Or ganisati onal di agn osis
1) Object ive:
To gain insight in the organization of Metso Automation BV.
2) Nee ds fo r info rm atio n
The definition chosen for organization is as follows: The design of the structure (in such a way that set goals & objectives can be achieved) and within the structure the management and coordination of activities (De Leeuw, 2000 p 8).
3) Theo retical va riable s
As a result of the definition, theoretical variables can be derived. Those are:
§ The design of the structure;
§ Design in order to achieve goals & objectives
§ Goals & Objectives
§ Management and coordination of activities
§ Activities
4) Scaling m etho d
Because this is an exploring interview, there’s chosen to pose open questions, only. Therefore, the information is gathered and not scaled.
5) Ro u gh variables
During this interview, the rough variables are not worked out according to theories, because the purpose of the interview was to give the researcher a general view on the organization.
These variables are a result of the theoretical variables. They will be mentioned per theoretical variable:
The design of the structure; organization schedule, tasks and responsibilities of interviewee and his colleagues.
Goals & Objectives; vision and strategy of organization, and
/or department.
Design in order to achieve goals & objectives; internal and external influence on the achievement of goals & objectives.
Activities, primary process of the organization, and / or department
Management and coordination of activities, meetings and daily conversations about the coordination of activities.
6) I nstructio ns
As mentioned in the introduction, the interviewee is free to interrupt, or ask for more information if the question is unclear.
7) P lacing the questio ns in a lo gica l o rd er.
The interview questions are posed on the following order. What is the goal (reason for existence), what do they do to achieve the goal (what), what are the internal and external influences (where) to account for to achieve the goal and finally how are they organized to achieve the goal and how are those factors managed (how).
8) L ay o ut
The interview scheme consists of an introduction. The interviewer introduces himself and tells the goal and the length of the interview. After the
introduction, the interviewer starts posing the question in line with the scheme set. End, the interviewee is thanked for his cooperation and the report of the interview will be handed to the interviewee. The interviewee is asked to give feedback on the report..
9) Concept t esting
The interview scheme is presented to the Administrative Managing Director of Metso Automation BV and asked for feedback and approval.
10) I ntervie w
I nterview Scheme Introduction
First I introduce myself to the interviewee. In this interview I like to know more about the organization of Metso Automation BV. If questions are
unclear please say so and feel free to interrupt or add information during the interview. This interview will take about 1.5 hour.
Questions
What does the organization wants to achieve?
What plan has the organization in order to achieve its goals?
What are the most important suppliers of Metso Automation BV?
What are the most important customers of Metso Automation BV?
What are the most important competitors of Metso Automation BV?
What other players in the market, which influence the performance?
How is the company organized?
How does the selling process look like?
In what activities can the selling process be divided?
What are your tasks and responsibilities?
How often are meetings held?
What is discussed in those meetings?
How is the organization managed?
Closing
Thank you for this interview. The results will be given to you one week from now, maximum.
A ppen di x 3: I nter view Sch eme P erform ance
Objectives
Get additional information on the impact of the strategy of Metso Automation for Metso Automation Netherlands.
Get information about the determinants of the performance and performance measurement of the business lines.
Needs for information
Information is needed about the strategy of Metso Automation BV, the main factors that influence the performance of the business lines, and about the current ways of performance measurement.
This interviewees are the Outside Salesmen E&HC and the Outside salesman P&P, both from Field Systems. And from Process Automation Systems, the Country Manager and the Sales Manager.
Theoretical variables Environment
SWOT analysis Strategy
Performance
Performance measurement
Scaling method
Because this is an exploring interview, it is decided to pose open questions, mainly. Therefore, the information is gathered and not scaled. Only to give a rate to the variables to describe the environment, an ordinal scale is used.
Rough variables
The rough variables are worked out according to the theories chosen for each theoretical variable. If the meaning of the variables were unclear some
additional explanation will be given.
Environment: dynamism, heterogeneity, hostility, and technology employed.
SWOT analysis, strengths, weaknesses, opportunities and threats of the business line.
Strategy
Performance measurement
Instructions
As mentioned in the introduction, the interviewee is free to interrupt, or ask for more information if the question is unclear.
Placing the questions in a logical order.
The questions are posed in a logical order, according to the conceptual framework.
L ay out
The interview scheme consists of an introduction. The interviewer explains the goal and the length of the interview. After the introduction, the
interviewer starts posing the question in line with the scheme set. End, the interviewee is thanked for his cooperation and the report of the interview will be handed to the interviewee. The interviewee is asked to give feedback on the report..
Concept testing
The interview scheme is presented to the Administrative Managing Director of Metso Automation BV and asked for feedback and approval.
I nterview
In this interview, I’d like to know more about the environment, strategy, structure and selling process of the company. Next, I’d like to know about what is measured about the performance of the business line.
Environment
To what extent is the market dynamic now, in other words,
What is the rate of change in the market and the development of the position of the company in the market?
1 Very Dynamic 2 Dynamic
3 Not dynamic, not stable 4 Relatively stable
5 Stable
Tot what is the market hostile, in other words
How high is the pressure from competitors or other forces in the market?
1 Very hostile 2 Hostile
3 Not hostile, not friendly 4 Relatively friendly 5 Friendly
To what extent is the company unique in offering customer needs?' 1 Very unique
2 Unique
3 Not unique, not standard 4 Relatively standard 5 Standard
To what extent is the company an innovator or a lagger in the way it serves its customers?
1 Innovator
2 More an innovator than a lagger 3 Not an innovator, not a lagger 4 More a lagger than an innovator 5 Lagger
What are the most important customers of the Business Line?
What do the customers value the most?
What factors are important in the market for the business line to account for?
SW OT A nalysis
What are the internal strengths of the Business Line?
What are the internal weaknesses of the Business Line?
What are the external opportunities for the Business Line?
What are the external threats for the Business Line?
St rategy
What targets are set for the business line?
What actions are taken to meet the targets set?
In what way is the business line unique, compared to its competitors?
P erforma nce measurem ent
What factors you do think have most influence on the performance of the business line?
What information do you use to manage the performance of the business line?
What information do you think is most important to manage the performance of the business line?
What information do you want more to manage the performance of the business line?
How often do you gather the information needed to manage?
How often do you check the performance of the business line?
A ppen di x 4: Fiel d System s
Field Systems operates in two strategic key segments, pulp & paper and energy & hydrocarbon. In the P&P they will focus globally on the large corporate accounts in cooperation with the PAS Business Line and Metso Paper. On a local level, focus is the customer’s mill action plan.
In the E&HC they will focus on the top10 customers, and specific programms are set up to support this. Further, they will take care of the large installed base of the product lines and provide service to customers on these
products. An installed base means, a customer which already has a metso product in his plant.
Field systems sells products and services to customers in the Pulp & Paper and Energy & HC 1 Industry. The department is managed by a Country
Manager (CM). Further, it consists of , two outside salesmen, one that serves the Pulp & Paper clients and one for the E & HC clients. Next, there are three inside salesmen, one responsible for A and B customers and one for the C clients and spare products. Last, there are two inside sales assistants. The outside salesmen attract the clients and the inside salesmen do the technical support. The inside sales assistants perform all order handling activities.
1.3.3 A ct ivit ies & P ro d ucts
Field Systems sells an investment product to its clients. It is called an investment product, because of its price, risk and economic lifetime. The client needs machinery in his factory and Field Systems can deliver high quality products. Metso has a high quality image and therefore sells its
products at a premium price. For this reason, it is important for the salesmen that they convince the customer about the knowledge of and experience with the products and services. They can do this by product testing, quality
analysis and by showing an impressive track record of products and services delivered. When the Metso product is in the customer’s factory, they can deliver very profitable services and can offer additional products. Thereby,
1 In chemistry, a h yd r oca r bon is anychemical compound that consists only of the elements carbon
(C) and hydrogen (H). They all contain a carbon backbone, called a carbon skeleton, and have hydrogen atoms attached to that backbone. (Often the term is used as a shortened form of the term aliphatic
hydrocarbon.)
Hydrocarbons are refined at oil refineries and chemical plants
they try to deliver the most critical machinery in the customer’s factory to make them more dependent on Metso.
Field Systems generally sells two types of valves, openclose and control valves. Globally, there are ten main suppliers for openclose valves and control valves have many suppliers.
Field Systems has a clear way of defining the importance of a customer for the company. They segment its customers in Key, A, B, and C clients. For all segments, they have their own sales & services approach. This process of segmentation is done by the Country Manager and the Key Account Director 2 . This customer relationship management system is explained in more detail in the description of the selling process of the Business Line.
Enviro nme nt
The clients of Field Systems are companies from the Pulp & Paper and the Energy and Hydrocarbon industry. For attracting new customers and orders two stakeholders are very important. One stakeholder is the engineering company. They make decisions about the design and the technical details of the customer’s new factory. The client itself has less knowledge about the technical aspect of its future factories than in the past. That’s the reason why Field Systems has to develop and maintain good relationships with those companies as well as the customer. The next stakeholder group is the
contractors. They get the right to look for the best supplier to fulfill a certain customer order. Customers hire those contractors only if they have a very large and complex order.
Another stakeholder is the Metso organization which supplies most of the goods. Information about the actions of competitive companies is gathered by means of conversations with current customers. In short, the main stakeholders for Field Systems are its customers, the contractors, its competitors and engineering companies for customer factories.
2 The activities of Key Account Management is not relevant for this research because they operate on a global scale. The costs are allocated to Metso Automation Head Office.
P roblem descripti on
Field Systems uses a system that can record all the data needed for each individual order. When entered into the system, every order gets a number.
Every order can be changed and tracked at any time by searching for its order number. This number is built up in a logical order. This reflects i.e.
from which customer industry the order is received. Because the number has a logical built up, the system can measure the results for every individual order, customer industry and even per salesman.
However the data that are used to derive information from contain some flaws. One can not check if all the data provided by the system are complete.
This is the reason one can not measure the performance because the reflected information is based on unreliable data.
The administration is responsible for recording of all the orders of Field Systems into the administrative system. They make an entry in the system for every order. They are recorded by using the order number and give them an account number and a cost center. The Administration now wants to check if all the data of the orders are recorded in the right way. Therefore they want to check the data on completeness. They have i.e. tried to make sure that the following equation holds for every order:
Every order should be in the Received Orders Report for the year. This order should also be entered into either sales or customer order backlog. An
analysis has learned that it is a time consuming process to check and correct this. Moreover, the above drawn equation is not reflected by the data
provided in the Customer Order Backlog on 31.12.2005, Recived Orders Report 2006, Customer Order Backlog 2006.
Moreover the sales figures are presented by different reports, General Ledger, Sales Ledger Summary, S20 & S 22 report, and Customer Invoicing Report. The totals of the reports are not the same. The following equation should hold for sales:
General Ledger = Sales Ledger = Customer Invoicing
This way of measurement results in the fact that the Country Managers can’t have the information about the performance of their business line on time in order to manage them. This is caused by the fact that the data available is
Backlog 3112
Received Orders
Sales Actual
Backlog
not appropriate to derive clear information from. And checking and adjusting the flaws in the data is a very time consuming activity.
That’s why the CM’s and the Board of Directors want a system that automatically checks the validation and reliability of all data and then measures the performance.
Field Systems uses a system of segmenting its customers into a Key, A, B and C category. These categories, all have their own way of handling the customer. The fact that the activities of S&M of PAS is not recorded, the same holds for Field Systems. An analysis of the profitability per customer, relative to the time spent on a customer can’t be made.
The CM of field systems tries of measure customer satisfaction. They sent customer satisfaction to all customers. How ever, there is a very low
response rate to these surveys. And customers, who have filled in the study, don’t get any feedback on the information sent. The CM concludes that this is not an effective way to measure customer satisfaction, which he believes is a very important indicator. The CM wants some new ideas to measure
customer satisfaction.
En vir on m ental and str ategic an alysi s Fi eld Systems
Information is gathered, about the environment and the strategy of Field Systems. The two outside salesmen were interviewed in order to obtain the information. The same theories as in the diagnosis of the research were used.
Enviro nme nt
The business line is operating in the Pulp & Paper (P&P) and Energy &
Hydrocarbon (E&HC) market, which is decided by the Field Systems Head Office. Important stakeholders in this market are the own metso
organization, customers, engineering companies and contractors. The metso organization decides in which markets they should be active in, but also is their only supplier.
Dyna mism
In the P& P market, the total sales are increasing in 2005. Their Dutch
market share, consist of 30% sales from key account customers and the total market is relatively stable in size. Although there are fluctuations in orders received from each individual customer.
The E&HC market is market is very dynamic. The fluctuating oil prices have had a huge effect on customer investments. This has resulted in a fluctuating demand for metso products.
H etero g eneity
Metso is unique in the market by delivering a life cycle approach service contract to their customers. In this way customers can optimize their production capacity and safeguard the continuity by insuring themselves from production failures by the metso service contract. Further, it has a complete product range, and this is a unique asset in the market.
H ost ility
In their markets, there is a lot of competition because the market is mature.
Customer demands in the Dutch market is mainly concerning maintenance and optimizing activities.
Techno lo gy em plo yed
In 2006, there is a change visible. Contractors are offering relatively more customer orders than the end users themselves, then in 2005. Another market development is that customers outsource their maintenance and optimization services. The Dutch organization is too small to do this and
therefore they look for partnerships with external parties to fulfill the changing customer need.
SW OT A nalysis
In this section the internal strengths and weaknesses, and external opportunities and threats are discussed.
Strengths & Weaknesses
The strength of field systems Netherlands are;
A strong product range and brands
A wide scope of delivery
A high performance product
The weaknesses of the Dutch organizations are
Less flexible
A high price level
Salesman have less time for selling activities
Inadequate marketing department in the Head Office.
Neles, the main brand of field systems, has a complete product range, although customers want a solution. Suppliers have to be very flexible and customize the product based on customer needs. The Metso organization is less flexible because it’s too big to keep on track with all customer needs.
This standardized and strong brand name results in a relatively high price level.
The marketing activities performed by the head office are inadequate. They have a strong product range and brands but it is the opinion of the Dutch organization that Metso does not succeed in communicating these track records in the market.
Further, the salesmen have less time for selling activities. The Dutch
organization is very small and they have to do very detailed reporting to the head office.
Opportunities & Threats
The opportunities for field systems are:
In the Pulp & Paper market,
a growing demand for consistency products and analyzers
more automation facilities in the mills in the Pulp & Paper market.
The Metso products fit best in automated mills, they can be easily connected to the automated control system. Moreover, analyzers can measure the performance of a customer process which can be shown on the screen in a plants control room.
In the Energy & Hydocarbon market, the business line has a 3050% success rate of receiving the order. Although, they are to small to fulfill this demand.
Now their market share is around 10%.
The threats are in the Pulp & Paper market;
Bad customer perception about price / quality ratio
Less flexible
Their product has a high quality standard and is priced accordingly, although customers perceive metso as being too expensive, because of inadequate marketing. Smaller and more flexible companies will better respond to customer needs. Metso is too big to fully adapt to local needs.
In the energy & hydrocarbon market, there is a fluctuation in oil prices, which has a negative influence on customer investments, and thus demands for Metso products.
For Field Systems two SWOT frameworks to indicate the factors in the different markets because there are different markets.
Strengths W eaknesses
strong product range and less flexibility
brands less employees
high scope of delivery high price level
administrative overload More automation facilities in
mills
increasing demand for small companies respond better analyzers and consistency
products to changing customer needs in P&P
Fluctuating oil price means uncertainty in E& HC market about customer demand
Op po rt unit ies Threats
St rategy
The Dutch field systems business line operates according to the strategy as set by Metso Automation and more specific to the field systems Head Office.
For every legal entity of Metso automation, there has set a customer platform for the year. In this budget, there is a split up between customer categories and customers are sorted by a category. Specific sales targets are set per customer, and a sales person or the Dutch business line is
accountable for achieving this target. Those targets should be achieved by operating according to the quality manual. Here customers are segmented into categories. All categories have their own sales & service approach.
Internal Rivalry
In general, there can be stated that there is a not so much internal rivalry.
The European market is mature and all companies have their own
competitive edge. Their market position is relatively stable and sales are increasing every year. However, there are some small companies, which are more flexible to adapt to changing customer needs. Customers want a solution, which requires a lot of customization by the suppliers. Metso has a broad product range, which makes them unique, but on the other had less flexible to customize their products. Metso has a large installed base, from which they can profit, by delivering optimization or maintenance services or replace old products in a customer’s plant or mill.
Supplier Power
As mentioned before, the Metso organization supplies the valves, analyzers and consistency products directly to the customer. They have set fixed purchase prices for these products, determined by the Head Office. In this sense, the supplier power is high, but as it is the same company this should not be perceived as negative.
Buyer Power
Buyers have relatively less power on prices. The prices are negotiable, but first approval is needed from the Country Manager before a customer receives a discount. Dependent on in which segment a customer is
categorized, prizes are relatively fixed. In this sense, buyer power is not high in this market from the Metso perspective. However, buyers require a
supplier to be on a vendor list. A supplier can be on that list if it can show a track record of proven performance and quality of products and services.
Metso is on this list, so this is not a problem.
New Entrants
For new entrants, it is hard to enter the market. First, a vendor listing is required to deliver products to customers. Second, the market is mature and other companies already have a large installed base. Only companies with a history in the global market can enter the Dutch market, however this is not
likely because the European market is mature and more promising investments can be done in the Asian and (former) Russian market.
Based on the analysis of the five forces (Porter, 1980) field systems does not have to account for huge pressures in the market. In terms of a generic strategy, they are a differentiator in the Dutch market. They are one of the bigger players in the P&P and the E&HC market and they are differentiating their selves by having a complete product range and known brands.
Field Systems processes
Structure Input Activity Output
Country Manager
&
Outside Salesmen
Outside
&
Inside Salesmen
Inside Salesmen
CM & OSM Market Surveys and business magazines Business Intelligence
Studying information and applying
knowledge
Market Analysis Customer Segmentation
Information Sent
Customer Visit
Quotation Made
Order Received
Technical Support
After Service
Communication to customers and Prepare order
OSM & ISM Leads Customer Segmentation
Quotations / Orders Information ISM
Orders Information
EUR Sales Information
Appendix 5: PAS Processes
Structu re Inp ut Activity Outpu t
Managemen t
Sales
&
Marketing
Custo mer Services
CM & SM
Market Surveys and business magazines Business Intelligence
Studying information and applying
knowledge Market Analysis
Information Sent
Potential Customer Visit
Quotation Made
Nego
tiation
Order Received
Project Execution
After Service
Communication Market
Analysis Leads
Quotations / Orders Information EUR Sales
Information
EUR Sales Information
A ppendix 6: Brainstorm sessio n
For the Process Automation Systems business line a brainstorm session was organized. The goals of the business line were:
making the business line acquinted with the concept of performance measurement.
To formulate the Critical Succes factors
Link the CSF to an input, activity or output or the whole selling process.
Link the CSF to Performance Indicators.
Before, the brainstorm started, the CM, SM and EM prepared a short questionnaire about the vision, strategy and main values of the business line. This concept was derived from Saher, 2001.
The first part of the session was a presentation of the researcher. In this presentation the attendants were acquinted with the concept of performance measurement. A handout was presented to them before the session started. When things were unclear they could ask for additional information from the researcher.
The second part was to meet the other goals of the brainstorm
session. This content is derived as a combination of Nijhuis, 1996 and Saher, 2001.
As an input the questionnaires were taken. The researcher started the discussion about the vision, then the strategy and then the main values of the company to create an universal view on those concepts.
Then the CSF’s were formulated. They were written on a blackboard.
Then they were linked to a step in the selling process, a responsible person. Then a discussion was helt about how the CSF’s could be measured. Performance Indicators were formulated that were understood and confirmed by all participants.
In the end the Country Manager asked the researcher and the Sales Manager to make a functional decomposition of the processes in the business line. This could be used for internal purposes in the future.
Input Brainstorm session
Individual opinions Developed opinions
Visie Visie
Gezond & Groeiend
Projecten en Service Achieve growth, in sales and profit
Voldoen aan de opdracht, Metso Finaland (Financial) Creeren van marktaandeel voor MA PAS
binnen de DCS markt in NL (en B)
Missie Missie
Installed base uitbreiden
Andere produkten leveren en verkopen Engineers opleiden en aantal uitbreiden
Actievere verkoop Attracting new customers and delivering service to existing Naamsbekendheid vergroten door advertsing en PR customers and in this way increase the value of the Bezoeken van potentiele klanten installed base by a broader product / service range Opsporen projecten en benaderen
Aantrekkelijke product marktcombinaties maken
Kernwaarden Kernwaarden
kennis van eigen mensen
kwaliteit van de leveringen en service Corporate Support
aantrekken nieuwe klanten Knowledge of customer needs in the Energy & Process
Aantal bezoeken vergroten Industry
Aantal offertes vergroten Getting the right product market combinations
Marge verbeteren Local knowledge of products and processes
Inzet Engineering, uren (betaald)
Service vragen, kwaliteit hardware en kwaliteit engineering
1 © Metso Automation Inc. APRIL 2006 BRAINSTORM SESSION
Metso Automation
TECHNOLOGY AND BUSINESS DEVELOPMENT PROCESS
AUTOMATION SYSTEMS
Sales & service Marketing
RTD Operations
FIELD SYSTEMS
Sales & service Marketing
RTD Operations
NORTH AMERICA METSO
AUTOMATION
President
Finance and administration
Human resources
© Metso Automation Inc.
Process Automation Systems Business Line
Managem ent
President
Business Control
Human Resources Executive Assistant
POWER & PROCESS
SYSTEMS RTD metsoDNA PULP & PAPER
CIS, Baltics
OPERATIONS, LOGISTICS, PROJECTS SALES & SERVICES
Europe, Africa and CIS
C U S T O M E R S
Services Europe
South America Asia,
Australia
SALES & SERVICES AsiaPacific and South America
3 © Metso Automation Inc. APRIL 2006 BRAINSTORM SESSION
GRADUATION PROJECT
Research at Metso Automation B.V.
BRAIN STORM SESSION APRIL 2006
4 © Metso Automation Inc. APRIL 2006 BRAINSTORM SESSION
Research Goal & Question
•
To give the Board of Directors and the Country managers more insight in which performance indicators of the selling processes of the business lines, should be measured so that they can manage their business line easier.
•
What Performance Measurement System should be designed for the Board of Directors and the Country
Managers, so that they can measure the performance of the selling processes of the business lines in order to manage the business lines easier?
5 © Metso Automation Inc. APRIL 2006 BRAINSTORM SESSION
Conceptual Framework
PERFORMANCE MEASUREMENT
SYSTEM Structure
Strategy & Goals
SELLING PROCESSES Environment
REQUIREMENTS
ORGANIZATIONAL CONSEQUENCES PERFORMANCE INDICATORS
CRITICAL SUCCESS FACTORS
MEASUREMENT
6 © Metso Automation Inc. APRIL 2006 BRAINSTORM SESSION
Business
Strategic Context
Pulp
&
Paper
Valves
Energy
&
Process
Main products
Process automation and information management
Quality management Spec. meas. and analyzers
Valves
Automated, control, ESD and manual valves Solutions and intelligent
condition monitoring
Process automation &
information management Life cycle services
Target market:
EUR 2 billion MA Net Sales:
EUR 300 million Market growth: 3.0%
Target market:
EUR 5.7 billion MA Net Sales:
EUR 270 million Market growth: 3.2%
Target market:
EUR 2.2 billion MA Net Sales:
EUR 60 million Market growth: 3.8%
Competitors
ABB Honeywell
Emerson Flowserve
Dresser Samson
ABB Siemens Emerson Invensys Honeywell Yokogawa
Markets Positioning
Results
Intelligent Reliability
Results
7 © Metso Automation Inc. APRIL 2006 BRAINSTORM SESSION
STRUCTURE AND PROCESS
MARKET SCAN
CUSTOMER VISIT
QUOTATION MADE
NEGOTIATION
ORDER RECEIVED
PROJECT EXECUTION
AFTER SERVICE
COUNTRY MANAGER
COUNTRY MANAGER &
SALES MANAGER
COUNTRY MANAGER
COUNTRY MANAGER
ENGINEERS
PROJECT MANAGER COUNTRY MANAGER EXAMPLE TO ALIGN PROCESS AND STRUCTURE
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PERFORMANCE MEASUREMENT SYSTEM
• Visual system that reflects the performance of the Business Line in an integral way. It is the link between strategic goals, company structure and day to day business.
Bird size of actual increases relative to budget or benchmark.
Body parts of actual bird increase relative to budget bird body parts.
BUDGET ACTUAL
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Performance Indicators
• BUDGET EXCEEDS ACTUAL SIGNIFICANTLY
• ACTUAL IS AROUND EQUAL TO BUDGET
• ACTUAL EXCEEDS BUDGET SIGNIFICANTLY
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Characteristics for PI’s
• SMARTIC:
Specific
Measurable
Achievable
Realistic
Time constraint
Inspiring
Controllable
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Specific
•
Specifiek: De indicator moet over een bepaald onderwerp gaan waarin interesse bestaat. Doorgaans is dit een begrip dat samenhangt met elementen uit planningen of hebben betrekking op randvoorwaarden waaraan een proces moet voldoen.
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Measurable
•
Meetbaar: De indicator moet absoluut of voldoende
(objectief) meetbaar zijn. Een niet meetbare indicator leidt tot een zinloze discussie. Ook de persoonlijke opinie van
personen moet door voldoende personen gegeven zijn en gebaseerd zijn op door terzake deskundige aangegeven elementen
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Achievable
•
Achievable: De opdrachtgever van het gemetene en de opdrachtnemer van het gemetene moeten de indicator als haalbaar en geschikt voor het doel accepteren.
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Realistic
•
Realiseerbaar: Kosten van het proces van meten en de wijze van meten (niet destructief meten van de gehele produktie lampen zie ook statistische technieken).
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Time constraint
•
Tijdsgebonden: Een meting van een indicator moet betrekking hebben op een specifiek tijdsbestek, een tijdsperiode of een tijdstip.
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Inspiring
• De prestatie indicator moet inspirerend zijn voor de mensen die het meten. Het moet ´leven´ in de organisatie.
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Controllable
• Hetgeen gemeten wordt moet beheersbaar zijn voor de betrokkenen:
ze nemen beslissingen (of geen beslissingen) die van invloed zijn op de waarde van de prestatie indicator.
Appendix 7: P erformance I ndicator w orksheets
· Marketing activities
· Customer Visits
· Quotations made
· Communication
Marketing activities
Period Jun06
Benefits Promotion activities
Website h its Documentation requests Telephone Mail
Nam e o f the event Date Employees Cos ts Existing New Exi sti ng New Existing New Existing New 1
2 3 4 5 Total
Benefits
Advertisements Website hits Documentation requests Telephone Mail
Source Date Topic Costs Existing New Existing New Existing New Existing New
1 2 3 4 5 Total
Benefits
PR, free publicity Website hits Documentation requests Telephone Mail
Source Date Topic Costs Existing New Existing New Existing New Existing New
1 2 3 4 5 Total
Customer Visits
Period Jun06
Kind of visit
Date Customer Customer type Employee Orientation Defining 1
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Total
Quotations Made
Period Jun06
Kind of quotation
Date Customer Customer type Employee GE GT DE DT
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Total
Communication
Period Jun06
Survey results
Number
Excellent Good SatisfactoryInsufficient Bad General satisfaction
Satisfaction about materials
Satisfaction about employee involvement
Appendix 8: Implementation schedule
Date Change activity Subject Leader Attendents
August, 1 Motivating Change Outcome of the report CM & SE all PAS employees
August, 1 Creating a vision Discussion about performance CM all PAS employees
Developing political support measurement If the first two activities are fully accepted, the next activity can be executed!
August, 7 Managing the transition Development plan of PMS CM &AMD all employees, also administration
September, 1 Managing the transition Discussion about the progress of CM & AMD all employees, also administration the development.
September, 7 Managing the transition System is operational CM & AMD all employees, also administration October, 1 Sustaining momentum Presentation and discussion about CM & AMD all employees, also administration
the first output of PMS
