Key Performance Indicators PDF

Key performance indicators These are measurable values that indicate how effectively a business is achieving its key business objectives. There are two forms of key performance indicators (KPIs): ‣ high-level KPIs which focus on the overall performance of the business low-level KPIs which focus...

Key performance indicators These are measurable values that indicate how effectively a business is achieving its key business objectives. There are two forms of key performance indicators (KPIs): ‣ high-level KPIs which focus on the overall performance of the business low-level KPIs which focus on the processes within departments, for example sales, marketing, production and so on. Easier to monitor Customisable dashboards provided by many automated software packages allows things such as KPIs to be monitored easily and quickly for multiple processes that may be running. Reports can be produced indicating clearly where certain areas may need improving. It also enables the efficient monitoring of tasks and encourages employees to be responsible and answerable for the tasks they are involved with. Key terms Dashboard: a digital interface that is used to obtain, combine and analyse data across a business. It provides an in-depth analysis of the business as well as providing a real-time indication of the function of the different departments within the business. This can include productivity, trends and activities as well as the key performance indicators. Research Core element 1: Business context Amazon constantly undergoes digital transformation. It started as a small mail-order bookstore in 1994 and now it is a global business with over \$1.7 trillion of revenue in July 2021. Research how Amazon stays ahead of its competitors by implementing the latest digital technologies. Consider the following: ‣ how technology has improved its operations ▸ what the manufacturing industry could learn from Amazon ‣ how Amazon Business has implemented digital technology to work with other businesses (B2B). Prepare a report of the results of your research. Test yourself 1 Discuss how the implementation of digital technology can help businesses improve the promotion of their brand. 2 Describe how digital technology can reduce business costs. 3 Explain how digital technology can increase reporting options and functionality. 4 Compare the two types of fiscal policy. 5 Explain how digital technology can support remote working. 1.4 The influence and impact of digitalisation within a business context and market environment Brand differentiation Brand differentiation can be created by using one or more of the following ideas when marketing your product or service: physical characteristics Brand differentiation: this is what sets your brand apart from the competition. Why should customers look at your brand before others? (Think of Richard Branson and Virgin, or Jeff Bezos and Amazon.) That is brand differentiation. emotional response by the customers to brand triggers (think of the John Lewis Christmas advertisements and charity advertisements using those who receive their funds and services, for example injured animals or victims of natural disasters, to encourage generous donations) ‣ presentation of the brand (think of Compare the Market campaigns using meerkats) altering the price of the goods and services to differentiate your brand from others (think of Lidl and Aldi who claim the best quality at the least price) the story behind the brand (think Jimmy Choo shoes) the overall customer experience of the brand: was the advertising an accurate reflection of the quality and presentation of the product or service? Are returning customers given special discounts? Does the offer include free shipping and free returns? These are experiences that determine whether customers will buy your products or services. Research Select one service such as a holiday firm and one product such as a smartphone and research how each one has differentiated itself from its competitor. Use the six bullets highlighted above to start the process and consider whether you can identify any other methods of brand differentiation. Brand values Brand values are what the company stands for and what the customer thinks when they see the logo or website and so on. They may think it is beautifully designed, very funny or serious, but these are not reasons why a customer will purchase from a company or remain loyal to a company. To do this they must be: ▸ memorable-when they see the logo or name, do they immediately remember what they stand for? timeless - although as times change it might be necessary for a business to adjust some of its values, they should be designed to remain tough and constant over the years so that its reputation grows exclusive - it should not be a version of another company\'s brand values. It must be unique to the business and its values of customer service, inclusivity, quality and so on. actionable - the brand values must be things which the company and its employees expect to deliver in every interaction with customers and the world in general. Therefore, the words used must be action verbs with examples of how these will be achieved for example: \"We meet your targets for using only renewable energy by our installation of solar panels and wind turbines at our storage facility and are working with renewal energy companies to identify new opportunities to expand this provision to our local outlets.\" A business should also supply a glossary of brand values. To ensure that all business staff and their customers understand their values the business should write them down and publish them. Research Select two organisations, one a national company and one an international company, and for each one identify their brand values. Compare and contrast the two sets of values and explain how being a national or international company may influence their brand values. Virtualisation/cloud services enabling scaling and elastic computing solutions Types of virtualisation Types of virtualisation enabling scalability include: Server virtualisation - enables one physical server to run multiple operating servers as virtual machines. The benefits are: more efficient use of IT equipment Key terms Brand values: these are at the centre of any brand and are incorporated into the look of the brand, the marketing content and language used, and the relationships that are built with customers through good customer service. Brand values are the beliefs that the company or individual holds as essential to delivering the products or services they provide. Virtualisation: using their own physical hardware, a company can create and use virtual resources such as servers, devices, or computing resources. The results are: reduction in costs of hardware, associated infrastructure and maintenance; reduction in operating costs; reduction in downtime due to security or other risks; and improved reliability as different host machines share the load. faster workload distribution better application operation improved server access reduced operating costs. Network virtualisation - reproduces the physical network requirements as a virtual network to allow applications to run in exactly the same way as on the physical network but with logical rather than physical ports, devices, routers, firewalls and so on. Desktop virtualisation - enables organisations to provide software configured for the specific needs of the particular workplace or individual. Any changes or upgrades can be rolled out quickly and easily from the IT department to all relevant locations. It also allows easy rollout to mobile or remote workers who may be using iOS, Android, Windows or any other permitted operating system. Cloud solutions enabling elastic computing solutions Cloud solutions deliver computing services such as servers, storage and networking over the internet. Data storage and processing occurs remotely from a location which may be anywhere in the world. Cloud solutions provide: Connectivity - employees are connected to the business at any time and anywhere in the world, using any device available. This reduces the danger of important files being stored on individual computers with risk of loss, theft or damage. ▸ Faster implementation - installing a cloud solution can take as little as a few hours rather than the months or even years it takes to deploy a physical solution. Improved collaboration - the improved connectivity allows workers to work together wherever they are and using whatever facilities are available at their location. This allows them to concentrate on the business needs rather than those of their IT equipment. ► Reduced risk of data loss - better backup facilities at distant locations avoiding local natural disasters and cyber attacks. ▸ Security - cloud facility providers employ highly trained and experienced computer security staff and spend far more on security hardware and software than individual organisations can afford. Cost saving-reduces the costs of physical servers, physical data storage and processing power Core element 1: Business context So, from a business viewpoint, these approaches provide two of the three possible ways that business can be supported by information technology and digitisation. The first way would be for the business to have its own hardware, software and internet resources which are expensive but will also be costly in terms of the space and personnel needed to run and maintain the system. Many of these roles such as programmers, developers and maintenance engineers are highly skilled roles which are in high demand; attracting and holding on to these staff may be difficult, and costly when a key member leaves the organisation. Other issues include security of the facilities, and problems caused by security and hardware or software failures that can cause long periods of shutdown which will have a negative impact on the company\'s standing with their customers. The second way is virtualisation as this will reduce the costs in some areas such as power consumption and the number of servers, but the company still needs to make a major investment in hardware to support the virtual environment. The company, through its virtual machines, can give guest access which prevents guests accessing sensitive data. One issue with virtualisation is that scalability is limited because of the configuration of virtual machines and a failure on one machine can have a knock-on effect on all other connected machines. The third way, cloud solutions, reduce the IT budget considerably as hardware and software costs and purchases are much reduced. Key terms Cloud services: a wide range of services delivered on demand to businesses and individuals over the internet. They are designed to provide easy and affordable access to applications and resources such as file storage, without the need for internal infrastructure or hardware. Elastic computing solutions: provision of variable service levels based on the changing needs of the business. Scalability: the ability of a digital system to respond to variable amounts of load (users, requests, connections, etc.) while maintaining good performance in a cost-efficient way. Digital Support and Business Services T Level: Core Case study The managing director of your company has asked you to produce a case for moving to a cloud or virtualisation approach to IT delivery. The company sells building designs to the global market and has to decide whether to upgrade its own IT systems or make use of the virtualisation or cloud options available. ► Research the positive and negative aspects of each approach. Write a report to the managing director comparing the approaches and explaining the differences and similarities that could influence the decision that the company makes. Digital innovations Digital innovation is simply using digital technology to solve or improve existing business problems. Clearly, to understand how to ensure that a business remains competitive and responds to changing environments and trends, the technology needs to collect and interpret very large amounts of data from a wide range of sources. By using digital technology such as dashboards, which automatically identify, locate, collect and present data, companies can have an instantaneous update on the state of the company and that of its competitors. These tools can also be used tox ▸ identify why customers turn to the business for particular products or services identify unique selling points ‣ provide insights into how the uniqueness can be maintained over time. Business intelligence and insight Business intelligence uses software and other tools to interpret data so that a business identifies problems, such as losing sales to competitors, or trends, such as customers preferring a new smartphone format rather than the current version on offer. The reports, charts and graphs generated provide insight into the issues and identify potential ways of dealing with them. Unique selling points A unique selling point (USP) is the core reason why customers prefer the product or service of one company rather than that of its competitors. It gives the company a distinct position in the marketplace as it clearly demonstrates a special benefit that it can provide which others do not. This may include the value of the product for its price or the solution it provides to a particular business problem. Processes and business models A process is not the same as a model. However, in business the terms are sometimes used interchangeably. ▸ Business processes - the business as a whole and its various departments all have their own business processes. These are the practical and/or technical steps that must be followed to produce the required outcome. These steps form the systems which ensure that the business operates effectively and efficiently. Each process or system will collect data on its performance which it can analyse so that it can improve or correct the way in which it works. Business models - these are simply the plans that businesses devise to ensure that they make a profit. A business model will identify the products and services which a business offers to generate a profit, its target market and the expenses or costs involved in achieving the profit. The target market is the type of individuals or companies which they need to buy their products or services. Business models must be updated regularly to check that they are still fit for purpose. Digital manufacturing This is the use of IT systems for the production of products or services for a company. It enables the organisation to integrate its processes and systems across the organisation, from the initial design stage to the final product or service offer. This approach has advantages such as: reduction in the loss of data resulting in mistakes and errors development of a virtual process which can be tested and corrected before time and money is spent on the physical implementation of the systems ‣ it speeds up new innovations or redesigns of the service or product and subsequent implementation. Financial Business finance includes: paying salaries and suppliers receiving payments from customers ensuring that the company meets its legal obligations in terms of tax and insurance payments the production of predictions on the future financial position of the company ‣ quarterly, half-yearly and annual reports on the company\'s financial position. Many of the tasks are carried out manually and are repetitive and straightforward. As a result, digital technology enables companies to automate these tasks, saving time and effort. Scanning technology allows cheques, expense receipts and similar documents to be easily captured without having to be keyed in by an individual. Research Businesses need to understand their competitors, the marketplace, their customers, government policies and any international events. To enable this understanding businesses carry out research. Market research is one example where customer views, sales figures, competitors\' success or failure, customer aspirations and local culture are just some of the elements which enable companies and their marketing department to measure the success of its marketing approach. This allows a business to devise new marketing strategies and increase its market share. Companies can gather their own information from their own research and draw on data and findings from secondary sources such as government agencies and published information from other companies. Digital technology has enabled companies to work with online research companies who collect data into huge databases which form big data sets. The data is continuously updated, and detailed information can be put together for companies in a shorter period of time. Therefore, digital technology has enabled companies to access a far wider range of data than they could with their own resources and with a reduction in costs and time. Wider access The aim of every business is to keep its existing customers while attracting new customers. The business must work to ensure that their customers are happy to stay customers. An important element of achieving this is communication. It is important that any communication is positively received, and this means avoiding causing offence or seeming to belittle the intelligence, personality and so on of the customer. Customer base This term is used to describe a business\'s most loyal and involved customers: those who regularly purchase products or services and match its target market. Digitalisation allows the business to widen the potential customer base by increasing its presence such Core element 1: Business context as creating a website to enable customers to purchase products and services from international locations. Customer relationship management (CRM) systems, for example, enable a business to collect information on all customers very quickly by storing and analysing customer information from age, ethnicity, location, income and lifestyle to purchasing behaviour and feedback such as star ratings. This allows businesses to continuously adjust their products and/or services to maintain and increase their customer base. Range of products and services This refers to the types of product or service which a company provides and may include a very wide range such as those offered by businesses, for example Amazon and Marks and Spencer, to very specialist services which sell only one type of product, for example a florist. Digitalisation can support the business in producing and delivering its range of products or services in various ways. Digital manufacturing systems such as robotic production lines, monitoring software for quality control and augmented reality and three- dimensional (3D) modelling and printing can support the building of the products. Digital services can be built using big data, data modelling techniques, automated data collection and storage techniques, providing better accounting or investment opportunities which meet the customer needs. These techniques support the business by reducing the costs of developing new products and/or services, as well as customising products and services and delivering them to the customer in a timely way. Contextualising customer behaviour Contextualising means that the business considers the circumstances of the individual customer. How old are they? Are they working? Are they studying? What can they afford to spend? Where do they live? What is their favourite sport? With answers to questions like these, the business can design their communication to match the circumstances of the individual. So, if the business is selling books, they could send out marketing information to someone studying with the words \'The new academic year will soon be here. Have you managed to collect all the textbooks you need for the next stage of your course? Check our digital bookshelves now.\" Digital Support and Business Services T Level: Core Digital personalisation This is a step beyond contextualisation which is aimed at a group of customers. Personalisation means that the communication is written to a particular person. So, using the example above, the business could use the name of the customer, which they have on their customer database, together with the fact that their course of study is medicine, to produce a communication which speaks to them personally. \'Dear Adam, you are off to study Medicine in September. We have a wide selection of medical textbooks available, and Gray\'s Anatomy is currently on special offer. Good luck with your studies. Platform interoperability Customers use a range of computer hardware, software and operating system (OS) platforms, for example iPads, other tablets, smartphones, desktops, laptops, smart TVs and iOS, Windows, Linux, Android to name but a few. Businesses cannot be certain what their customers and potential customers use and do not wish to lose customers or fail to reach those on different platforms. Interoperability means the ability of different devices and software to communicate with each other without the customer being aware. Open standards Open standards allow people to share data freely. They prevent the lock-in and barriers to interoperability and allow choices to be made between suppliers and technology solutions. It promotes free competition in the IT market by ensuring that businesses and people find it easy to move their data between different system solutions. Using non-platform specific digital identity A digital identity of a person can refer tox username and password date of birth social security number purchasing behaviour/history online search activities, for example electronic transactions. People can use a variety of platforms when registering themselves for an account, for example with an e-commerce retailer, or to use a banking app. The businesses must ensure that there are no barriers to customers and potential customers accessing their products and services due to using the variety of different platforms. The European Union (EU) demands that EU countries have interoperability for digital identity across the EU. However, although governments have signed up to the concept of non-platform specific digital identity, the ability to create a single digital identity, regardless of which software or hardware platforms it was designed upon, and which can be used on any system in any country or situation, has not yet been achieved. Test yourself 1 Describe the term \'brand differentiation\'. 2 Discuss the use of virtualisation and cloud solutions by businesses and how they enable scalability and elastic computing solutions. 3 Explain how unique selling points (USPS) provide useful intelligence to businesses. 4 Describe the term \'customer base. 5 Explain the difference between contextualising customer behaviour and digital personalisation. 1.5 The role of technical change management in digital operational integrity Organisational change means a change, reorganisation or replacement with respect to processes, methods, systems, operations, technologies and structure of an organisation. This change can be developmental, transitional and transformational. So how does change occur and what causes the change? There may be one or more factors which can create the need for change. These can be financial, economic, technological, social, political, legal, staff related and so on. Key terms Developmental: concerned with the development of someone, something or even both. Transitional: the transition (movement) from one position, stage, state or concept to another. Transformational: producing a change or improvement in a situation.