Corporate Performance Management

CORPORATE PERFORMANCE MANAGEMENT
By Linking Balanced Scorecards and Six Sigma
Supervised by Prof. Amer Moujtahed
Husam Khanji
EMBA I
18 September 2005

EMBA Project Paper i Husam Khanji
Contents
Preface iii
Acknowledgements iv
1 Introduction 1
2 Corporate Performance Management CPM 2
2.1 Advantages 3
2.2 Main Components of CPM 4
2.2.1 Strategy 5
2.2.2 People 5
2.2.3 Measures 6
2.2.4 Process Excellence 7
2.2.5 Information Technology 7
3 Linking Balanced Scorecards and Six Sigma to Drive CPM 9
3.1 About Balanced Scorecard and Six Sigma 10
3.2 CPM Roadmap 15
3.2.1 Set Strategy 16
3.2.2 Define Voice of the Customer VOC 17
3.2.3 Deploy Key Performance Indicators KPIs 21
3.2.4 Improve Processes 25
3.2.5 Facilitate IT Solutions 29
3.3 Symbolising CPM System 33
4 Recommendations 34
4.1 Avoiding CPM Pitfalls 34
4.2 Enhancing Syrian CPM 37
4.3 Future Directions 39
5 Conclusion 40

EMBA Project Paper ii Husam Khanji
Appendix A: The Six Sigma DMAIC Roadmap 41
Appendix B: Where the Performance Goes 45
Appendix C: Sample of Key Performance Indicators 46
Abbreviations 47
Glossary 48
References 51

EMBA Project Paper iii Husam Khanji
Preface
In the name of Allah the most Beneficent the most Merciful
Since I have started doing my Executive MBA at HIBA, I was wondering if there is something like
a magic stick to make companies increases their performance. Syrian companies today needs more
than magic sticks to be able to compete in the new era of the open market economy.
As my background and my profession are in automation engineering, I was attracted to the idea of
providing managers and entrepreneurs with systematic managerial tools to help them know what
exactly they suppose to do and what kind of decisions to take in order to make their companies
develop and prosper.
A successful company and its leadership must have the ability to meet financial and customer
expectations in a changing global economy. To win customer confidence and meet business plan
objectives, the leadership team must not only develop a winning strategy, but also drive results
by turning the strategy into a reality through communication and a fact-based performance
measurement system.
In this project, the essential components of corporate performance management system have been
discussed and a roadmap steps towards achieving this system is described before several points are
discussed to avoid implementation pitfalls.
Syria, like any other country in the world, needs to have as much successful companies as possible
to strengthen its economy globally. I hope that this work will open the door for others of my
colleagues to elaborate more and go further with performance methodologies and tools to support
our organisations achieving high performance results worldwide.

EMBA Project Paper iv Husam Khanji
Acknowledgements
I would like to show my deep appreciation to those who made the Higher Institute of Business
Administration (HIBA) succeed in its first Executive Master of Business Administration (EMBA)
course.
To those who contributed in shaping my life to the way that I am enjoying now.
Particular thanks to Prophet Mohammad, (peace be upon him), who inspired me as he said: “Allah
likes a person whom perform perfectly for a job that he does”.
To Prof. Amer Moujtahed, whom, despite his busy schedule as the IT Director at Syriatel
Organisation, he managed to spare me hours for supervising this work.
To my parent whom they supported me during my whole life with their warm care and prayers.
Finally, many thanks are due to my wife for her patience and great support during my studies for
the EMBA course which consumed mostly from her time-share.

EMBA Project Paper Page 1 Husam Khanji
1 Introduction:
Syrian companies are increasingly facing high competitiveness from multi-national companies
trying to penetrate what was recently considered closed economy. Managers, therefore, can no
more survive with their companies with less than high-performance products and services.
Syrian entrepreneurs and executives should be able to effectively and efficiently manage their
companies as a captain in his airplane inside the cockpit with full of indicators and on-hand
information that will ensure the right direction of the plane, with enough resources and capabilities
to arrive safely to his destination and achieve his targets in the shortest period with no mistake.
Information is now considered as a strategic and competitive weapon towards achieving great
results. However, company has usually enormous number of historical and current data for every
aspect of the company. The big question faced is how we can use these data in order to make better
decisions and reach the goals of the company that meet the strategic needs of the business and
reduce the day-to-day fire-fighting activities.
The pressures on executives to understand and act quickly to every aspect of their organisation,
cause many to achieve high corporate performance management as a way of gaining sustainable
competitive advantage.
In this paper, we will provide the Syrian executives with integrated critical-to-success information
that gives them guidelines to lead their companies to a high level of performance. The study used
Balanced Scorecards and Six Sigma management disciplines in order to deliver successful
corporate performance management system.
We hope that this will eventually contribute to the growth of the overall Syrian economy and help
them to perform excellently in their own industry comparing to their competitors.

CORPORATE
PERFORMANCE
MANAGEMENT
GREAT RESULTS
STANDARD RESULTS
Figure 2.1. CPM helps executives to achieve great results
2 The Corporate Performance Management (CPM)
Profitability is a business target but not the main purpose of business, which is to provide products
and services that customers want, leading to profits.
Successful organisation need; a healthy cash flow, improving profitability, have committed and
preferably happy employees, cooperative and supportive suppliers, high quality products and
services; and customers whose expectations are constantly being exceeded.
The manager needs to regularly improve him/herself in the control of processes, planning of
activities, measuring performance, training of staff and delegating effectively. Decisions have to be
made during the business day, which depend on answers to these fundamental questions:
■ How are we doing? ■ Why? ■ What should we be doing?
Corporate performance management1
’, (CPM), “is an umbrella term that describes all of the
processes, methodologies, measures and systems needed to measure and manage the performance
of an organisation.” It is about enabling and engaging everyone in an organisation towards
1
The definition of corporate performance management (CPM) has remained consistent since industry analysts Gartner
Research introduced CPM in 2001.

achieving high results. CPM help executives to have full control on their businesses and give
answers that they need, aligned with their strategy, in order to achieve great results (Figure 2.1)."
2.1 Advantages
Corporate performance management, CPM, will give the following benefits to the executives who
will adopt this system:
1. Balance short-term gain with long-term value creation.
2. Support collaboration between all different aspects and departments of the
organisation.
3. Utilise corporate capacities and resources efficiently and effectively.
4. Customers are considered the centrepiece of the organisation's performance.
5. Provide transparency with clearly identified measures and targets.
6. Focus on financial and non-financial KPIs.
7. Sustain and enhance performance.
8. Bridge the gap between strategy with execution (Figure 2.2).
9. Automate the processing of data to accelerate and integrate CPM.
10. Facilitate process flexibility and high responsiveness to the market demands.
Figure 2.2. CPM Bridge the gap between strategy and execution

The result is a performance premium on the company’s market shares, one that further rewards
stretch commitments and performance delivery as a closed control loop.
2.2 Main Components of CPM
The Figure below illustrates a corporate performance management system comprising five key
components derived from my research on several books, articles and related websites. (Please see
list of references at the end of this paper).
We will describe in the following the five components that I have chosen with the reason behind
selecting them. These components are: strategy, customer satisfaction, key performance indicators,
process excellence and information technology.
Figure 2.2. Main components of CPM

2.2.1 Strategy
Strategy is the overall plan for deploying resources to establish a favourable position. The clear
strategy of the organisation is the main driver for the CPM and it has to be achievable and
convertible into executable objectives.
At most companies, strategy is a highly abstract concept, often confused with vision or aspiration,
and is not something that can be easily communicated or translated into action. But without a clear
sense of where the company headed and why, lower levels in the organisation can not put in place
executable plans. In short, the link between strategy and performance cannot be drawn because the
strategy itself is not sufficiently concrete.
As profits come from core competencies2
, senior executives should have their strategy based on
their competencies, which will shape their competitive advantage through adding value to their
businesses in the targeted market segments.
Strategy is the first and most important ingredient of a successful CPM system because it provides
vision and targets at every level of our organisation.
2.2.2 People
With today’s global and diverse workforce, competitive environment and increasing customer
demands, the work environment is changing. Work no longer means a physical job, instead, it is
becoming more critical that employees are motivated to be intellectually involved. The role of
leaderships evolving, such that instead of the workers doing perfect work, it is the leadership that
must do perfect work. Among the first and foremost responsibility of leadership are to inspire
workers to do their best, to value their contributions, and to create new opportunities for innovative
solutions.
2
Source: Business Idea to Enterprise Development, Paolo Gubitta, Damascus, March, 2005 EMBA course at HIBA

People are expected to do the right things in order to execute the objectives of the company. Doing
the same job over and over, at the same level of efficiency and productivity, is no longer sufficient
for organisational success. For an organisation just to maintain its existing relative performance, it
must continually improve ideas.
Executives have to motivate and develop their staffs, at the end of the day, no process can be better
than the people who have to make it work. The selection and development of these people are
essential ingredients in their success. They should have the ability for learning to meet the growing
of the business.
While improving the capabilities of a company’s workforce is no easy task, often taking many
years, these capabilities, once built, can drive superior planning and execution for decades of
successful performance management system.
2.2.3 Measures
What you measure is what you get. Senior executives understand that their organisation’s
measurement system strongly affects the behaviour of managers and employees. In order to gain a
competitive edge in today’s market, successful managers are using measures to reveal
opportunities for improved business performance, efficiency and profitability.
We can reveal strategic measures that are vital and valuable for the development and survival of the
company as key to CPM. These measures will help executives to see clearly how their business
exactly is doing and how to drive performance.
However, measures can be also classified according to the level of management and to the domain
of users as following3
:
3
We can also classify measures up to the different stakeholders’ interests on the company.

(A) Operational Measures: provide everyone within the operational level with the information and
strategic context they need to do their work. It is about getting the facts and making informed
decisions.
(B) Tactical Measures: deliver an aggregate view of operations that allows management to
optimise current practices, within established constraints. It is about managing against goals,
defining accountability, and enabling measurement.
(C) Executive Measures: provide executives with all necessarily information when they make
long-term decisions and strategic planning.
2.2.4 Process Excellence
This is another essential element of CPM discipline. It is about making quality the operating
system, and spread across every part of the business. Operations are essential to be designed to
prepare managers to enhance performance through operational excellence. Executives should have
the ability to set the right frameworks and techniques for performance improvement and analyse
successful operations to maximise their competitive advantage.
Continuous improvement of the quality of the organisation’s processes lies on the ability of the
organisation to learn and rapidly transform that learning into action and to tackle the greatest
“points of pain” immediately.
The internal processes of the company should be customer-driven and flexible as much as possible
so executives will have the ability to respond quickly to customer’s needs and competitor activity
with lowest cost of processes modifications.
2.2.5 Information Technology
Nowadays, technology is becoming more and more an essential element for success. Every day
more powerful and simple IT applications that facilitate an integration and process acceleration are
coming to the market and it is matter of finding the most suitable technology that needed by
different level of an organisation that should have the following specifications:

It is very important to have sufficient IT solutions in place that can provide a single source for
information. This can give executives instant visibility on their businesses regardless to any
geographical constraints which highly assist to achieve successful CPM.
Hence, the role of technology is to improve the CPM process by providing an integrating and
accelerating working environment. CPM exploits technology by combining all the management
processes into a single, closed loop application focused on the implementation of strategy and
automate the processing of ratios, currency conversions, allocations, elimination of minority
interests, the consolidation of results as well as Statistical Process Control, SPM, These
fundamental processes cannot be done so easy and quickly without the great support from available
information technology solutions.

3 Linking Balanced Scorecards and Six Sigma to Drive CPM
While concepts behind the Balanced Scorecard and core Six Sigma methodologies are not new, a
powerful management tool can be crafted through the unification of these two proven strategies.
An approach that combines the targeted performance indicators of a Balanced Scorecard with the
statistical rigor of Six Sigma can be used to effectively make an organisation focus on the
achievement of its strategic goals. Adopting this structured combination builds confidence in
proposed process improvements.
Balanced Scorecard Methodology is an analysis technique designed to translate an organisation’s
mission statement and overall business strategy into specific, quantifiable goals and to monitor the
organisation’s performance in terms of achieving these goals. While Six Sigma has become an
industry for driving improved growth of profitability worldwide as a methodology for pursuing
continuous improvement in customer satisfaction and profit that goes beyond defect reduction and
emphasises business process improvement in general.
A Balanced Scorecard approach provides the mechanisms to drive organisational alignment
sustain improvements and maintain equilibrium across the enterprise. Based on statistics and
aspects deemed most ‘critical to quality,’ Six Sigma could further focus the organisation’s
improvement efforts.
In other words, Balanced Scorecard provides us with the tools for understanding and translating
strategy into interrelated measures, while Six Sigma helps to analyse, improve and control the
processes that produce these measures. Next, we will give more information about these two
managerial approaches before linking them together to drive CPM.

3.1 About Balanced Scorecard and Six Sigma
In the following, we provide basic information about Balanced Scorecard as well as Six Sigma
disciplines4
:
(A) Balanced Scorecard:
With Balanced Scorecard, management can model its desired future, set the plans to reach it,
monitor its progress along the way, and gain insight from day-to-day results to adjust the course.
While measurement is a powerful motivator to improve performance, it is insufficient for today’s
performance-driven organisation to focus all attention and efforts towards short-term, lag measures,
while ignoring intangible assets such as continuous improvements efforts or innovations that
provide the foundation for future financial success.
We can devise a ‘‘Balanced Scorecard’’—a set of measures that gives top managers a fast but
comprehensive view of the business. The Balanced Scorecard includes financial measures that tell
the results of actions already taken. And it complements the financial measures with operational
measures on customer satisfaction, internal processes and the organisation’s innovation and
improvement activities—operational measures that are the drivers of future financial performance.
Executives also understand that traditional financial accounting measures like return on investment
and earnings per share can give misleading signals for continuous improvement and
innovation—activities today’s competitive environment demands. The Balanced Scorecard lets
executives see whether they have improved in one area at the expense of another. Knowing that
will protect companies from posting suboptimal performance.
Think of the Balanced Scorecard as the dials and indicators in an airplane cockpit. For the complex
task of navigating and flying a plane, pilots need detailed information about many aspects of the
4
Please refer to Appendix A for more information about Six Sigma.

flight. They need information on fuel, airspeed, altitude, bearing, destination and other indicators
that summarise the current and predicted environment. Reliance on one instrument can be fatal.
Similarly, the complexity of managing an organisation today requires that managers be able to
view performance in several areas at once.
The Balanced Scorecard allows managers to look at the business from four important perspectives.
(See Figure 3.1 ‘‘The Balanced Scorecard Links Performance Measures.’’) It provides answers to
four basic questions:
First, how do customers see the company? Find out by measuring lead times, quality, performance
and service, and costs. Second, what must the company excel at? Determine the processes and
Figure 3.1. The Balanced Scorecard links performance measures

competencies that are most critical, and specify measures, such as cycle time, quality, employee
skills, and productivity, to track them. Third, can the company continue to improve and create
value? Monitor the ability to launch new products, create more value for customers, and improve
operating efficiencies. Fourth, how has the company done by its shareholders? Measure cash flow,
quarterly sales growth, operating income by division, and increased market share by segment and
return on equity.
Scorecard meets several managerial needs. Most importantly, the scorecard brings together, in a
single management report, many of the seemingly disparate elements of a company’s competitive
agenda: becoming customer oriented, shortening response time, improving quality, emphasising
teamwork, reducing new product launch times, and managing for the long term.
Implementing a Balanced Scorecard requires obtaining consensus on deliverables, strategy,
performance indicators and organisation design that aligns with business process.
In short I have listed some key benefits of Balanced Scorecard in the following:
• Translating mission and strategy into operational measures
• Aligning corporate strategy with business units and shared corporate services
• Targeting individuals' goals and incentive compensation to make strategy everyone’s
everyday job
• Setting priorities for financial resource allocation
• Enabling continuous strategic feedback and learning

(B) Six Sigma:
A quality methodology can produce significant benefit to business and organisations through
customer-focused, statistics-based process improvement. In addition to the rigorous methodology
and the focus on data-driven decision-making, distinguishing characteristic of Six Sigma is the
organisation of dedicated resources as well as part-time roles, established to support a quality
programs.
Six Sigma advocates quality management a component of improving performance through reduced
overheads and increased competitiveness and it is a way of thinking about the business, about
processes and about cause-and-effect relationships.
Many of the tools used for Six Sigma also have provided insight into processes when used in
conjunction with TQM5
and other process improvement methodologies. Six Sigma provides a new
way to use existing tools as well as new ones. It is the combination of tools and the way they are
employed that gives Six Sigma its competitive advantage.
Six Sigma DMAIC, (Define, Measure, Analyse, Improve, Control), methodology is more than just
tools and a methodology. it goes beyond the undesirable causes of their effects and removes them.
It can be thought of as a roadmap for problem solving and process improvement. Figure 3.2
contains definitions of each phase of this roadmap.
Since the target of the CPM is to become more productive and efficient. With Six Sigma, we can
decrease process cycle time and cost with improved quality but it has to be conducted wisely.
Six Sigma benefits stem from a significant improvement in process performance, which in turn
results in:
5
Total Quality Management

• Increased revenue from removing process capacity limits as well as excellent improved
processes and products
• Higher productivity
• Dramatic reduction in defects, cycle time and cost
• Standardised improvement methodology across the organisation
• Greatly improved customer satisfaction level
• Reduced costs from rework and elimination of non value-adding work
Define: Critical-to-quality characteristics (CTQs) are defined by understanding voice of
customer VOC.
Measure: Identify the key internal process that influences CTQs and measure the defects
generated relative to identified CTQs.
Analyse: Understand why defects are generated. Brainstorming, statistical tools, and so forth are
used to identify key variables that cause defects. The output of this phase is the
explanation of the variables most likely to drive process variation.
Improve: The objective is to confirm the key variables and then quantify their effect on the
CTQs, identify the maximum acceptable ranges of the key variables, make certain the
measurement systems are capable of measuring the variation in the key variables, and
modify the process to stay within the acceptable ranges.
Control: The objective of this final phase is to ensure that the modified process now enables the
key variables to stay within the maximum acceptable ranges using tools such as
statistical process control (SPC) or simple checklists.
Figure 3.2. Six Sigma DMAIC roadmap

3.2 CPM Roadmap
In order to achieve successful CPM system in our organisation, I have identified five main steps
derived from both Balanced Scorecard and Six Sigma disciplines. Figure 3.3 shows the flowchart
of those five steps which start with setting the strategy (derived from Balanced Scorecard); then
defining the voice of customer (derived from both Balanced Scorecard and Six Sigma); third step is
to deploying the key performance indicators, which represent the critical measures of the system
(derived from Balanced Scorecard); we then link these indicators with the fourth step to improve
the organisation's processes (derived from both Balanced Scorecard and Six Sigma); before we
finally facilitate the needed IT solutions which plays an important role to integrate and accelerate
the whole steps and processes to achieve successful CPM system.
It is important that I mention here that I am not providing full tools for CPM, rather, it is only a
roadmap for executives to know how to reach their targets and goals by understanding the basics
behind CPM system.
Set strategy
Define Voice
of the
Customers
Deploy Key
Performance
Indicators
Improve
Processes
Facilitate IT
Solutions
Step 1
Step 2
Step 3
Step 4
Step 5
Figure 3.3. Flowchart for implementing CPM

3.2.1 Set Strategy
The Balanced Scorecard is primarily a mechanism for strategy implementation by translating that
strategy into specific objectives, measures and targets and monitoring of the strategy during
subsequent periods. Companies deploying a strategy based on core competencies or unique
capabilities may wish to start their strategic planning process by identifying these critical
competencies and capabilities for their internal business process perspective and then for the
customer perspective, selecting customers and market segments where their competencies and
capabilities are most critical for delivering customer value.
There are three main foundation stones for successful strategy: first, to have clear long-term and
simple objectives that can be achievable and translatable into goals. Theses goals should be
communicated and spread over the organisation to every individual that support in achieving the
objectives of the organisation. Second, we must well understand the environment, (SLEPT
factors could be very helpful in this case). Third, to have objective appraisal approach towards
evaluating the present and required resources for achieving the strategy and implement the action
plans effectively.
Figure 3.4. Common elements of successful strategy

In order to sustain the performance of an organisation over time, everyone within the organisation
must understand the strategy and tailor their activities and behaviour accordingly; and the
governance process must be linked to the strategy.
Following are some of important points should be taken into consideration during this step:
• Clarify and gain consensus about strategy
• Communicate strategy through the organisation
• Align departmental and personal goals to the strategy
• Link strategic objectives to long-term targets and annual budgets
• Identify and align strategic initiatives
• Perform periodic and systematic strategic reviews
• Obtain feedback to learn about and improve strategy.
3.2.2 Define Voice of the Customer VOC
Voice of the Customer (VOC) is part of the Six Sigma approach describes the process by which
customers stakeholders communicate their requirements from the organisation and its products and
processes.
We use ‘customer’ terminology to represent anyone who has an interest in the successful of the
CPM. A list of customers may include the following:
• Employees of the organisation
• Customers of the organisation

• Suppliers to the organisation
• Shareholders of the organisation
• Society in which the organisation operates
Different customers may have different needs. For example, employees would like to have a good
working environment, competitive compensation, more tools to make their jobs easier and the
opportunity to grow. Customers are interested in receiving good parts on time at a reasonable price.
Customers also want better, faster and cheaper products or services continually. Suppliers want
more business, better prices and less interference by the customer. Shareholders want value for
their money, that is, increasing market value and dividends.
Voice of customer (VOC) engages in a continual dialogue regarding customer requirements in
order to set the performance bar for vital products and processes though critical to quality metrics
(CTQs) which obviously underline the critical to customer satisfaction.
Balanced Scorecard consider employee satisfaction, retention and productivity as core
measurements for learning and growth perspective of an organisation, whereby Six Sigma
initiative uses Voice of Customer (VOC) tool to underline the critical to customer satisfaction.
Figure 3.5 illustrates the process of obtaining VOC as s continuous closed-loop action. We first
understand customers by asking him and listening to his needs before we translate these needs into
clear requirements. From these requirements we can get the critical-to-quality (CTQ) factors which
will be used during the improve processes step to shape plans and actions.
In my research, I have concentrated more on two key customers, employees as internal customers
and those external customers who usually pay the bills.

(A) Internal VOC:
Information age companies will succeed by investing in and managing their intellectual assets.
Innovation and improvement of products, services, and processes will be generated by re-skilled
employees, superior information technology, and aligned organisational procedures.
At the end of the day, CPM systems will not succeed if employees cannot have the willingness and
capabilities to work on it. Therefore, it is so important for executives to understand their own
employees and know how to boost their productivity and commitment. The points mentioned in the
following, identify some of the important factors during the VOC process for internal customers:
• Capabilities: the current status of employee capabilities and the objective target for new
capabilities
Figure 3.5. Voice of customer

• Rewards/recognition: Incentives should always be set on individual ability to implement
action plans that meet or exceed strategic goals
• Communication: Executives to provide tools to let the truth be heard and information to be
circulated across their organisations
• Culture factors A reasonably healthy climate is a pre-requisite to meaningful
improvement in performance
• Assign responsibility: CPM is all about organisational accountability. Goals are, in
general, only met if someone is made responsible for them
The company need to look at how it selects employees, does performance appraisals, approaches
succession planning, and recognises performance.
(B) External VOC:
Identifying the customer is a critical step to understand and design our products and services that
meet customer requirements. The objective of this step is to understand the customer’s needs,
demands, requirements, desires, wants, whims, and, if possible, those things that the customer does
not even know they want just yet in order to reach to the customer satisfaction.
Consider products that a customer has purchased that do not meet his or her exceptions. Or perhaps
the product is not user-friendly or has poor quality. Will a customer take the time to complain about
the product or services? Well at least the customer will avoid purchasing products from the same
company in the future. The importance of achieving customer satisfaction is an important attribute
of Six Sigma implementation.6
6
Word-of-mouth behaviour is significant. If a large problem is resolved to the customer’s satisfaction about 8 person
will be told about the experience; if the customer is dissatisfied with the resolution, 16 other persons will be told.
(Goodman 1991).

We should finally consider also the relationship between the internal and external customers
performance which is very much related to variability in the customer experience. Therefore,
businesses must focus on reducing variability in local “people” processes (the “who” and “how” of
implementation). The power of a local focus on reducing variability lies in its simplicity and
flexibility. Each unit or department can identify and correct its own problems by identifying their
VOC tool.
3.2.3 Deploy Key Performance Indicators KPIs
This is a critical step as it shapes the backbone of the successful measurement system. We should
decide what need to be measured, how it needs to be measured and when. Translating strategic
imperatives into a network of clear, simple measures is the first step in the Balanced Scorecard
approach. When appropriate performance measures are aligned along with the strategy and
objectives, they provide greater insight into how the system is performing today, and what it may
anticipate in the future.
The art of selecting KPIs: As we have already identified the strategy which can be translated into
objectives. (step 1), followed by identifying VOC that will underline the CTQs, (step 2); we can
then define the key to success indicators which we call it KPIs. Figure 3.6 describes the way we
should obtain the KPIs and link them to our targets as they are derived from two different sources:
strategy and VOC7 to meet customers' needs and business objectives. KPIs should reinforce the
desired organisational behaviour for the long term as well as for the short term strategy.
KPIs can be implemented by combing elements of Balanced Scorecard and Six Sigma approaches,
which:
• Breaks strategic themes down to vital objectives
• Assigns KPIs/Targets to vital objectives

• Measures objectives against targets
KPIs should be impartial, ensure trustworthiness of quantifiable results and match concentration
areas of the business. As matter of fact they have to be SMART, i.e.: Specific, measurable,
actionable, relevant, and timely.
We can classify KPIs into three types:
• Lagging: which provides historical look at past performance
o Examples: Quarterly revenue, employees turnover
• Leading: provide indicators that are predictive for future results
o Examples: Inspection results, training-completion rates
• Real-time: show where things are right now. They allow corrective action to be taken
immediately to affect the outcome
7
Appendix C shows sample of Key Performance Indicators.
Figure 3.6. Obtaining KPIs

o Examples: Stock prices, inventory levels8
The following Figure (3.7) shows possible measures which can be translated into SMART KPIs:
FFuunnccttiioonn
No
HR Finance Sales Marketing Processes IT
1 Employee
satisfaction
Return-on-
investment
Sales to cost
ratio
Market share Lead time System
availability
2 Employee
turnover
Profitability New account
to existing
ones
Customer
satisfaction
Product to
market
Backup
system
3 Employee
productivity
Revenue Customer
acquisition
Quality Information
security
Figure 3.7. Key Performance Indicators
Business Performance Index::
Performance is measured against the planned corporate growth
and profitability goals. A total of 100 points could be achieved as an index by giving weight for
every categories of the measurement system according to the contribution amount of each category
to the whole performance of the organisation. This index provides the company’s various
stakeholders with relevant and transparent information that contributes to an accurate valuation of
the company.
KPIs Colour Codes: Colour-coded status target values for quick review of progress. The red
colour means that the KPI is not achieving the lowest level of performance acceptance. While the
yellow colour indicates that the KPI is doing fair and closer to hit its target. Lastly, the green colour
shows a healthy measure has been accomplished. The levels are varies from corporate to another
8
Source: The Four Disciplines of Execution, Franklin Covey, Training course, 2005.

according to several internal and external factors related to the strategy and objectives behind every
KPI specified as mentioned above. Figure 3.8 presents the KPIs colour codes as thermometer of the
measurement system.
KPIs should be then deployed, communicated, archived and backed up properly as these data are
the inpurts of CPM system.
3.2.4 Improve Processes
This step is an on-going assessment of process capability and customer satisfaction with the
business performance. Customers see organisations through their processes not through their
structures.
Figure 3.8. . KPIs Colour codes

In order to reach process excellence, which is one of the main components of CPM system, first we
have to start with an analysis phase where organisation’s key processes and CTQs are obtained and
compared to the KPIs. The next phase will be to improve these processes to correct any
unacceptable variations and finally to monitor these improvements in the final control phase.
Six Sigma approach provides the tools and methodologies that are needed to implement these
phases powerfully.
Functional specialisation must be integrated into customer-based business processes. Mass
production and service delivery of standard products and services must be replaced by flexible,
responsive, and high-quality delivery of innovative products and services that can be
individualised to targeted customer segments.
We explore the underlying factors that actually drive results.
Once an organisation has decided on the right measures, executives need to set and specify targets,
and how they are going to delivered. To do this executives typically invoke the processes
formulation (i.e., deciding on how to achieve the target measures and on what exactly actions or
tactical plans will be required to implement); analysis (to see where the variances are and to decide
on what to do about them), improve (and allocating resources to the tactical plans); and control
(monitoring the actions and results of the tactical plans and to see if the target measures set over
time are still on course to be achieved).
(A) Analysis:
In this step we will use three main tools:
• Failure mode and effects analysis (FMEA) from Six Sigma
• Project priority index from Six Sigma
• KPIs Interlinked KPIs from Balanced Scorecard.

Failure mode and effects analysis (FMEA): that can analyse and connect every success or failure
to its original causes in order to repeat the success stories and prevent the bad cases. Taking into
account the CTQs that we could find from VOC and monitor by the KPIs system.
We identify the factors or Xs likely to have the greatest impact on the response variable. These
factors are classified as either controllable or uncontrollable. If a causal factor (X) is controllable
and contributes significantly to variability in the response variable (Y), then an opportunity to
achieve a better result presents itself by controlling the causal factor. By focusing on causal factors
that have a statistically proven impact on a process, the organisation gains an important advantage
in being able to predict the effect of proposed changes and create an easily understood family of
value propositions.
Interlinked KPIs: The concept behind the interrelationship between these different components
that executive can monitor and predict the future of the organisation’s performance. For example,
the organisation is currently doing fine in the financial measures but on the other hand the
employee satisfaction and internal quality are poor. As a result, external quality felt by the
customer will begin to decline. It is intuitive that if this trend continues, customer satisfaction and
financial performance will begin to decline as well.
A comprehensive CPM system must specify how improvements in operations, customer service,
and new products and services link to improved financial performance, through higher sales,
greater operating margins, faster asset turnover, and reduced operating expenses.
On the other hand, employee attitudes affect customer attitudes, and customer attitudes affect
financial performance.
The Balanced Scorecard should have the ability to drill down to different levels of measurements
and review the measures associated with those activities that create the greatest organisational
leverage.

Learning
and Growth
Internal
Process
Customer
Financial
New Sales Increase Cash Flow
Customer RetentionCustomer Satisfaction
Cycle timeProcess
SatisfiedTrained
Return on Capital
Increase Profitability
Figure 3.9. . Interlinking measures using Balanced Scorecard
The following Figure 3.9 illustrates an example of interlinked measures using Balanced Scorecard
approach.
Once we have understood and analysed the linkages between measures and causes factors
on results, we can then justify areas that we have to improve for either saving cost or
increasing quality of products and services.
Project priority index (PPI): It is one of Six Sigma methodology that can identify the most
important area for improvement according to the following formula:

S = potential savings generated by the project
P = probability of project success
C = cost of executing the project
T = time to complete the project
Figure 3.10 shows multiple project evaluation using PPI. The Figure shows PPI for four
projects. From the analysis, reduction in billing errors and yield improvement appear to
have higher PPIs than the other projects.
Project Annualised
Savings
Probability
of Success
Total
Cost
Time for
Completion (Year)
PPI
Inventory
reduction
250,000
SYP
80% 100,000
SYP
0.5 4.00
Yield
improvement
2,000,000
SYP
60% 250,000
SYP
0.33 14.55
ISO 9001
registration
5,000,000
SYP
90% 500,000
SYP
1.5 6.00
Billing errors
reduction
100,000
SYP
75% 10,000
SYP
0.25 30.00
Figure 3.10. Project priority index for multiple projects
However, we can choose the project depending on available resources and customer
demands as well as the corporate need, despite the PPI index.
(B) Improve:
PPI = S P / C T

Identify possible solutions and optimise existing processes to reduce defects, and to meet customer
expectation is the prime objective of this stage. Listening to customers during VOC step can create
ideas for the way of improvement. Competitors are another source of ideas. Six Sigma also provide
tools 9
for innovation while Balanced Scorecard emphasise on learning and growing capabilities of
the organisation.
By using the right management information system, (IT solutions), we can get drastic assistance
specially after the revolution of utilising artificial intelligence (AI) in these solutions. This paper
will not discuss more about these tools since they can be handled by specialists; while our aim from
this thesis is to clarify the way of achieving successful CPM for executives.
(C) Control:
The last and continuing step in this process involves monitoring changes and key measures. The
Balanced Scorecard should have the ability to drill down to different levels of measurements and
review the measures associated with those activities that create the greatest organisational
leverage.
Continuous and proactive mentoring of performance is particularly important in highly volatile
competitive environment. We can control process by keep monitoring the variation between out
targets and KPIs. Striving for “greens” and fixing the “reds”.
3.2.5 Facilitate IT Solutions
Both Balanced Scorecards and Six Sigma encourage the usage of information technology in order
to ensure strategy spread across the organisation (Balanced Scorecard) and to reduce process cycle
time with high quality of data (Six Sigma).
I am using IT solutions to describe the required software and hardware that is necessary in order to
achieve our CPM goals and objectives.
9
Brainstorming, TRIZ, design of experiments (DOE) and benchmarking are some example (see Glossary).

IT solutions offer decision-makers fast, simple access to reports and analysis. self-service reporting
and familiar interfaces are tailored to the different skills and needs of individuals, enabling
everyone to generate reports on their own This ensures that large volumes of scattered historical
and current raw data are converted into accurate information for reporting, analysis and
forecasting.
Hence, technology allows CPM techniques to be used and to automatically predict future
performance that can then compared to a previously set targets with any variances being reported to
users all without user intervention.
We need information technology in order to integrate and accelerate the whole processes of the
CPM system to reduce all processes cycle time, hence costs, and to ensure that information is
shared at the right level to the right people at the right time. Proper IT solutions will enable
information at every aspect of the organisation instantly and accurately, thus it highly enhances the
successful of CPM implementation as Figure 3.11 illustrates.
Figure 3.11. . IT solutions enable information to CPM

Appropriate IT solutions within the organisation, should have the capability at least to meet the
CPM goals and objectives and have the data collection capabilities for proper measurement system
and accurate KPIs.
Most tedious statistical calculations for process analysis can now easily be relegated to a computer.
I believe that for a successful CPM system, all those who are involved in the system should have
good versatile statistical software used in their training and readily available for use after training
sessions.
Therefore, organisation should choose a common computer program that offers many statistical
tools, ease of use, good pricing, and technical support.
It is very important that executive facilitate and not exceed what organisation need from IT
solutions.
Presently, On-Line Analytical Processing (OLAP) technology can provide users with fast, easy
access that provides an analytical tool for decision support system DSS which will highly meet our
requirements.
The following are main features that CPM system should enjoy with proper IT solutions tailored to
integrate and accelerate this system.
• Reporting: Produce and access reports for all levels of users across an organisation by
transforming and presenting real-time information in business context throughout the
enterprise
• Access and receive information in a timely manner in order to make informed business
decisions
• Complex computations, business processes and algorithms can be stored as standardised
processes so that everyone, regardless of their skill level, can access them

• Integration of analytic results and processes
• Provides a high-level view of key performance indicators at the intersection of selected
business dimensions
• Users can get the answers they need without constantly involving IT
• Consolidation: Consolidation involves the aggregation of data. This can involve simple
roll-ups or complex groupings involving interrelated data. For example, sales offices can be
rolled up to districts and districts rolled up to regions
• Drill-Down: OLAP can go in the reverse direction and automatically display detail data that
comprise consolidated data. This is called drill-down. For example, the sales by individual
products or sales reps that make up a region’s sales totals could be easily accessed
• Slicing and Dicing: Slicing and dicing refers to the ability to look at the database from
different viewpoints. One slice of the sales database might show all sales of product type
within regions. Another slice might show all sales by sales channel within each product
type. Slicing and dicing is often performed along a time axis in order to analyse trends and
find patterns10
• Visualisation: present data in charts, graphs and geographic maps within multiple
applications. KPIs can presented in different dashboards meeting personal features for
users and specific information needed.
By leveraging existing data and system assets and bringing CPM to everyone through familiar and
intuitive interfaces, IT solutions help organisations leverage existing skill sets, serve all user types,
lower total cost of ownership and deliver critical business intelligence to more people faster than
ever.
10
Source: Information Technology Course, Prof. Amer Moujtahed, Damascus, 2005 EMBA course at HIBA

3.3 Symbolising CPM system
Before we close this chapter, I would like to symbolise the above described steps to achieve CPM
as in Figure 3.12 as street built from IT solutions for integration and accelerations of the other 3
steps that are symbolised as a vehicles starts with strategy to push other two vehicles of voice of
customer which in turn helps to push the improved processes. These vehicles need to drive under
clear vision which is glimmered by the Key Performance Indicators of the CPM system.
Eventually, all vehicles will help executives to arrive to a successful CPM.
I suggest using sky-blue for successful CPM system. This colour represents the utmost targets of
our CPM system when all of our KPIs have accomplished its green colour, then we can confirm
to executives by this sky-blue colour that our corporate is achieving great results. We can specify
the level of score according to the corporate strategy and market environment and individual
KPIs.
Figure 3.12. Symbolising steps to achieve CPM

4 Recommendations
Executives should look on the corporate performance management as a powerful tool that can
assist them to make their organisation achieving great results continuously and response to the
market changes proactively so they can have a sustainable competitive advantage.
Internal and external customers’ satisfaction with process excellence should be the focus of
executives to meet the goals and objectives of their strategy that has been built on the competencies
of the company.
4.1 Avoiding Implementation Pitfalls11
Executives will have the full responsibilities on making the CPM succeed by managing changes in
their organisations and we should know that CPM is a driver of cultural change with a large and
lasting impact on the organisation’s capabilities, strategies, and competitiveness. It takes time and
the experience of repeated results.
The job is not over once initial results are achieved. Transition of improvements into ongoing
performance is where the real power lies. Results should be sustainable to have an effect and
actually be realised. Every improvement raises the bar of expectations so improvement must be
sustained to remain in the same competitive position. Management and leaderships actives must
continue. Build the organisational muscle to stretch further each time. This is a journey, not a day
trip. Transformations do not happen quickly and they stick.
(A) Strategy:
Executive should avoid the following while setting and implementing his / her strategy across the
organisation:
11
See also Appendix B.

• Lack of passionate commitment to achieving dramatic results
• Setting low or no expectations for achievement with CPM
• Not treating CPM as a leadership initiative and giving it the highest priority
• Not making tie for CPM initiative, somehow perceived as extra work that must not be
important
• Focusing on one overall deployment strategy
• Strategy is not lined up with critical projects or program areas
• External/competitive position of an organisation is not properly reflected into the strategy
(B) People:
A primary task to achieve great results by using CPM is to create a culture wherein people have a
tremendous opportunity to be heard and, ultimately, for the truth to be heard. It is very important
also to have the right people from the beginning and try not to de-motivate them.
Avoid one of the following employees’ possible failures:
• Failure to enlist employees enough in problem-solving activities
• Lack of an established process for encouraging employees intellectual involvement
• Insufficient training given to employees
• Lack of time given to employees for their active involvement
• Productively emphasised over creativity and quality

• Lack for empowerment to identify, prioritise, and improve process
(C) Measures:
Keep in sight that CPM concentrates on customers, not just reaching certain numbers.
Avoid the following
• Measures are not specified to the proper level
• Unreliable data collection capability
• Developing metrics that measure the right thing, but cause people to act in a way contrary
to the best interest of the business to simply "make their numbers”
• Developing so many metrics that you create excessive overhead
• Developing metrics that are complex and difficult to explain to others
(D) Execution Processes:
The emphasis should be on starting small in one area of the business that could include the
financial process and then expand to other areas like internal and external customers and then
moving across into other areas.
Executive must avoid the following areas that can cause execution failure:
• Business processes are not lined up with strategies and business plan objectives
• Focus on non-critical areas of the business
• Be rigid and slow in response to the internal and external rapidly changed environments

(E) IT Solutions:
Although IT solutions are meant to speed up processes, it can turn into an obstacle and lead to
losses to organisation if not properly deployed.
Following is the avoid list which can help executive to succeed in implementing proper IT
solutions:
• Measures are not measured properly
• Use non-local terminology cause misunderstanding
• Facilitate complicated reporting system
• Implement IT solutions as separate processes often using different and incompatible
technologies12
• Lack of users training
• Lack of support and proper system maintenance
4.2 Enhancing Syrian CPM
Finally, just to make sure that this paper will give a proactive impact on the Syrian economy, I
would like to initiate an idea for the government to take into consideration in order to improve
CPM in our organisations. The main objective of this idea is to increase the awareness of the Syrian
organisations on how they can achieve high performance level.
12
For example, a Word document may be used to capture the strategic plan, spreadsheets used to enter budgets, the
general ledger to report actual while a general purpose OLAP tool is used to analyse variances

A special governmental performance committee organised with an affiliation of a recognised
European Union performance body to publish a periodical that rank Syrian organisations according
to their performance level and to ensure transparency and visibility.
Government may give a kind of support for highly performed organisations, such as reduction on
taxes, electricity bills or any other motivation incentives to support every company that is serious
to implement CPM system.
Following, are the key points that could be considered for the ranking system:
(A) Performance reporting: (rank 1 to 5)
Key measures to
monitor overall
performance.
Performance results indicate positive improvement. Strategic and
business plans are modified accordingly based on results achieved.
Information is readily accessible through executive information
systems. Information needs and systems are periodically reassessed
based on changing business needs and identified reporting gaps.
(B) Customer satisfaction: (rank 1 to 5)
Utilisation of
customer satisfaction
levels.
Customer satisfaction is a key driver of strategic and business
planning, and is considered in performance evaluation and incentives.
Techniques used to collect customer satisfaction information are
constantly being improved.
(C) Process excellence: (rank 1 to 5)
Key measures to
monitor service
quality and
efficiency.
Processes and services results are monitored over time. Operating and
service measures are linked to strategic objectives and priorities. The
information is accurate and timely. Achievement of service standards
is a key consideration of management in strategic and business
planning.

(D) IT solutions: (rank 1 to 5)
Reliable and integral
information is timely
available by suitable
IT solutions.
Information is integrated from various sources with data integrity
assured. Activity, product, service, and results cost information is
readily accessible to all managers in a format that can be customised
for process improvement; cost recovery, business planning, and
performance measurement.
We can integrate this proposal with other recent call from Syrian government to improve the
performance of the public organisations and their employees.
Recently, there was a special decree, No. 322, issued by President Bashar al-Assad on evaluating
all workers’ work performance in public sector to define the ‘labour forces’ structure and to review
policy of employment13
which is a great development towards accomplishing improved Syrian
corporate performance.
This project will motivate executives to work hard to reach higher level of performance through
their system reengineering and modernisation. Eventually they will become more competitive and
advance in their quality of products and services.
4.3 Future Directions
This paper should open the door for more efforts that will support and enhance the successful
implementation of the performance management systems in Syria.
However, the following concepts can be studied and discussed in further papers and researches by
my colleagues:
• Knowledge management

• Design for six sigma
• Decision Support System DSS
• Managing Change and transformation
Moreover, other tools and methodologies that may be invented in the future, which can include
artificial intelligence to minimise whatever manual work remains.
5 Conclusion
CPM is powerful management system that allows executives to assess and communicate strategy;
provide operational management with tools for developing effective plans, give people instructions,
and knowledge on how to perform their roles in implementing strategy. However, CPM system
may improve efficiency, yet it cannot ensure effectiveness of the executive as they are asked to
highly perform in order to deploy such system.
Combining targeted performance indicators of a Balanced Scorecard with the statistical rigor of
Six Sigma was effectively used to give focus for Syrian organisation on the achievement of their
strategic goals through successful Corporate Performance Management system which keeps them
going forward instead of backward.
13
Source: Syrian Arab News Agency (SANA), 28 July 2005.

APPENDIX A: BACKGROUND OF SIX SIGMA
The father of Six Sigma was the late Bill Smith, a senior engineer and scientist in Motorola. Not
long afterwards, in the mid-1990s, Jack Welsh, the CEO of General Electric (GE), initiated the
implementation of Six Sigma in the company so that the quality improvement efforts were aligned
to the needs of the business. This approach to implementing Six Sigma involves the use of
statistical and no statistical tools within a structured environment for the purpose of creating
knowledge that leads to higher-quality products in less time than the competition14
.
The Six Sigma DMAIC, (Define, Measure, Analyses, Improve, Control), methodology is a
roadmap for problem solving and product or process improvement. Presented here is a tale that
summarises the steps within each phase of DMAIC, as well as possible tools to use in the course of
Six Sigma improvement process to achieve the DMAIC goals and outputs.
While the DMAIC roadmap presented may appear linear and explicitly defined, it should be noted
that an iterative approach is often necessary. For instance, you may find that once you have
collected data in the Measure phase, you can return to the project charter, (Define phase) to refine
the problem statement. As another example, after analysing the data, (Analyse phase), you may
find that you did not gather enough information to isolate the root cause of the problem. At this
point, you may iterate back to the Measure phase for further data collection.
Although the following table shows a broad selection of tools, it is not exhaustive of all the options.
Further, a tool listed here in association with one phase of DMAIC may find a suitable application
in another. It’s important to use tools that are appropriate to a particular process and yield
meaningful results, rather than to go through the motion of using all the tools simply for the sake of
“checking the box.”

D Define Phase: Define the process, its goals and customer (internal and external) requirements
DMAIC PHASE STEPS
Define customers and customer requirements
Develop problem statement, goals and business case
Identify process owner and process team
Define resources
Evaluate key organisational support or opposition
Develop project plan and milestones
Develop high level process map
TOOLS USED
Project charter
Process flowchart
SIPOC diagram
Stakeholder analysis
DMAIC work breakdown structure
CTQ (critical to quality) definitions
Voice of the customer (VOC) gathering
Define
Review
M Measure Phase: Measure the process to determine current performance; quantify the problem
DMAIC PHASE STEPS
Define defect, opportunity, unit and metrics
Create detailed process map
Develop data collection plan
Validate the measurement system
Collect the data
Determine process capability and sigma baseline
TOOLS USED
Process flowchart
Data collection plan/example
Benchmarking
Measurement system analysis
Voice of the customer (VOC) gathering
Process sigma calculation
Measure
Review
A Analyse Phase: Analyse and determine the root cause(s) of the defects
DMAIC PHASE STEPS
Define performance objectives
Identify value/non-value added process steps
Identify sources of variation
Determine root cause(s)
Determine vital few causes of defects
TOOLS USED
Histogram
Pareto chart
Time series/Run chart
Scatter plot
Regression analysis
Cause and effect/Fishbone diagram
Process map review and analysis
Statistical analysis
Hypothesis testing
Non-normal data analysis
Analyse
Review
14

I Improve Phase: Improve the process by eliminating defects and variation
DMAIC PHASE STEPS
Perform design of experiments
Develop potential solutions
Define operating tolerances of potential system
Assess failure modes of potential solutions
Validate potential improvement by pilot studies
Correct/Re-evaluate potential solution
TOOLS USED
Brainstorming
Mistake proofing
Design of experiments (DOE)
Quality function deployment (QFD)
Failure modes and effects analysis (FMEA)
Improve
Review
C Control Phase: Control future process performance
DMAIC PHASE STEPS
Define and validate monitoring and control system
Develop standards and procedures
Implement statistical process control
Determine process capability
Develop transfer plan; finalise documentation
Verify benefits, cost savings/ avoidance, profit growth
Communicate to business
TOOLS USED
Process sigma calculation
Control charts (variable and attribute)
Cost savings calculations
Control plan
Control
Review
The following chart illustrates the Six Sigma implementation roadmap:

APPENDIX B: WHERE THE PERFORMANCE GOES
This chart shows the average performance loss implied by the important ratings that managers gave
to specific breakdowns in the planning and execution process:15
15
Source: Harvard Business Review magazine, USA, July / August 2005.

APPENDIX C: SAMPLE OF KEY PERFORMANCE INDICATORS

ABBREVIATIONS
AI Artificial intelligence
CPM Corporate performance management
CRM Customer relationship management
CTQ Critical to quality
DMAIC Define-measure-analyse-improve-control
DOE Design of experiments
DSS Decision support system
ERP Enterprise resource planning
FMEA Failure mode and effects analysis
FMEA Failure modes and effects analysis
IT Information technology
KPIs Key performance indicators
OLAP On-line analytical processing
ROI Return on investment
SIPOC Supplier, input, process, output and customer
SLEPT Sociological, legal, economic, political, and technological
SPC Statistical process control
TQM Total quality management
VOC Voice of customer
σ Sigma, population standard deviation

GLOSSARY
Balanced Scorecard: Is often organised around the four distinct performance
perspectives of financial, customer, internal business process and
learning and growth (Kaplan and Norton 1996).
Benchmarking: To provide a standard against which something can be assessed.
Brainstorming: Consensus-building among experts about a problem or issue
using group discussion.
Corporate Performance
Management:
It is an umbrella term to describe the methodologies, metrics,
processes and systems used to monitor and manage the business
performance of an enterprise.
Dashboards: They translate data into a rich, graphical presentation using
gauges, maps, charts, and other graphics to show multiple results
together. Dynamic dashboards.
Decision Support
System:
An information and planning system that provides the ability to
interrogate computers on an ad hoc basis, analyse information and
predict the impact of decisions before they are made.
Design of Experiments
(DOE)
It is a powerful statistical technique introduce by Ronald A.
Fisher in England in the 1920s to study the effect of multiple
variables simultaneously.
DMAIC: The Six Sigma problem-solving framework for improving
business processes. It is an acronym for Define opportunity,
Measure performance, Analyse opportunity, Improve
performance, and Control performance.

Failure mode and effects
analysis (FMEA):
Analytical approach directed toward problem prevention through
the prioritisation of potential problems and their resolution.
Key Performance
Indicators:
A set of quantifiable measures that a company or industry uses to
measure or compare performance. These indicators help
companies measure their ability to meet their strategic
and operational goals. The key performance indicators vary from
one company to another depending on their priorities.
Knowledge-centred
activity (KCA):
A term used that means striving to obtain knowledge wisely and
utilise it wisely.
Metrics: A system of parameters or ways of quantitative assessment of a
process that is to be measured, along with the processes to carry
out such measurement. Metrics define what is to be measured.
On-Line Analytical
Processing:
Decision support software that allows the user to quickly analyse
information that has been summarised into multidimensional
views and hierarchies. OLAP tools enable users to drill down into
masses of data and statistics in order to get vital information.
Sigma: The Greek letter (σ) that is often used to describe the standard
deviation of population (Statistics).
SIPOC: The SIPOC method is an excellent tool to expand the
understanding of the information and its courses in process flow.
Six Sigma: A term coined by Motorola that emphasise process improvement
methodology that provides a systematic approach to the
elimination of defects that affect something important to the
customer.

Stakeholders: Customers, suppliers, employees, producers, shareholders,
lenders and community.
TRIZ: TRIZ (theoria risheneyva isobretateslshehuh zadach) is a Russian
acronym for theory of inventive problem solving. It is a tool that
provides a dramatic breakthrough in almost all areas and
accelerates the project team’s ability to solve problems.
Voice of Customer: Those aspects of service that are of importance to the customer
are termed ‘Voice of Customer (VOC).
X's: Often referred to as Big X's, these are the factors or variables that
will have the greatest impact on the Big Y's.
Y's: Often referred to a "Big Y's", these are the business results that
matter. Big Y's represent measures directly linked to critical
customer requirements.

REFERENCES
A) Books:
Breyfogle III, F.: IMPLEMENTING SIX SIGMA Smarter Solutions Using Statistical Methods,
United State of America, 2005, 52 ff.
Cf. Collins, J.: Good to Great, Random House, London, 2001, p. 9.
Gupta, P.: THE SIX SIGMA PERFORMANCE HANDBOOK, A Statistical Guide to Optimising
Results, New York/Main et al., 2005, p.9, pp. 161-165, 340 ff, 374f.
Jobber, D.: Principles and Practice of Marketing, 4th edition, McGraw Hill International (UK) Ltd,
London/Main et al., 2004, p. 50, p. 66.
Kaplan, R. / Norton D.: TRANSLATING STRATEGY INTO ACTION Balanced Scorecard,
Harvard Business School Press, United State of America, 1996, pp. 10-127, pp. 305-307.
Karajewski, L. / Ritzman, L.: OPERATIONS MANAGEMENT Strategy and Analysis, Sixth
Edition, Prentice-Hall International Inc., New Jersey, 2002, p. 67, p. 242,
Ohmae, K.: THE MIND OF THE STRATEGIST The Art of Japanese Business, McGraw-Hill Inc.,
New York/Main et al., 1982, 42 f.
Cf. Slater, R.: Jack Welch on LEADERSHIP, New York, 2004.
Stewart, G.: Successful Sales Management, Great Britain, Prentice Hall, 2000, p.54
Vause, B.: Guide to Analysing Companies, Third Edition, Profile Books Ltd, London, 2002, pp.
147-193.
B) Articles in Magazines:
Kaplan, R. / Norton, D.: THE BALANCE SCORECARD Measure That Drive Performance, in:
Harvard Business Review, July-August/2005, pp. 172-180.
Mankins, M. / Steel, R.: TURNING GREAT STRATEGY INTO GREAT PERFORMANCE, in:
Harvard Business Review, July-August/2005, pp. 65-72.

Schmidt, E.: A new Standard, in: iSixSigma Magazine, Volume 1, Number 2, May/June 2005, pp.
20-24.
Waxer, C.: SIX SIGMA BASIC Six Sigma Organisational Structure, in: iSixSigma Magazine,
Volume 1, Number 2, March/April 2005, pp. 14-15.
C) Websites:
www.ameinfo.com/48604.html, 12/9/2005
www.answers.com, 20/08/2005
www.bscol.com, 07/09/2005
www.businessintelligence.com/ex/asp/code.133/xe/article.htm, 15/08/2005
www.citect.com, 07/08/2005
www.cognos.com/products/scorecarding/scorecards/cmm.html, 15/08/2005
www.distributive.com/balancedscorecard_software_factsheet.html, 15/08/2005
www.hbr.org, 10/09/2005
www.isixsigma.com, 30/08/2005
www.isixsigma.com/library/content/c031028a.asp#about#about, 20/08/2005
www.isssp.com, 14/09/2005
www.kellen.net/bpm.htm, 16/09/2005
www.motorola.com/content/0,,3074-5804,00.html, 17/09/2005
www.performancesoft.com, 01/08/2005
www.riskinstitute.ch/145360.htm, 15/08/2005
www.sap.com, 12/09/2005
www.sas.com, 12/09/2005
www.sun.com, 10/08/2005

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