In my university we keep creating Cost Centres (CC) for various purposes. Some examples of these cost centers are "Building inclusive cities"/"Creating Digital Opportunities"/"Field evaluation and feasibility studies" etc. Two Thirds of the amounts spent on these initiatives are payroll related. Hiring people to carry out these studies or initiatives and so far our monitoring is focused ONLY on how much has been allocated/spent. My question is .. what different types of Performance Indicators(PI) and /or Benchmarks that could be established to evaluate these cost centers? How to find out if they are spending their $$$ effectively or economically? I am looking for setting-up Non Financial indicators (NFI) that will be useful at the time of creating CC's. Examples of PI's,NFI's is welcome. Your thoughts and input is highly appreciated. Many thanks for your time.
Examples Of Non-Financial Indicators
Answers
Anon,
When the budget for the cost center is approved (e.g. Creating Digital Opportunities), what goals and objectives are defined at that stage?
For example:
By what date does the budget owner expect to have completed a specific set of tasks (e.g. by June 2015- sign up at least 5 corporate sponsors, obtain 3 grants, hold 2 events, find 10 internships for students)?
You can then correlate actual spend with progress toward those goals.
1
Thank you Len.
A great resource I'd recommend checking out is "The Four Disciplines of Execution" (4DX). It's a book that talks about setting lead goals to correlate to your lag goals. The lag goals being the goals you don't know if they've been reached until the period is over. Whereas the lead goals are exactly what Len Green outlined above in his example.
A possible NFI is to evaluate how much the average employee is able to take on in these call centers. Once production reaches the point where the average staff is being overworked and customer service is being hindered, then you know it's time to hire.
Not sure if this helped. The 4DX book goes into great depths to explain a lot of these lead goals that help achieve the lag goals.
1
Thank you Chris. Will definitely check this book.
Nanda.