Service Standards and Year End Reporting

Let’s assume we are in April 2009 and take the following example of some applications:

Receive Date	Processing Finish Date	Number of Days to Process
February 1, 2009	February 15, 2009	14
February 15, 2009	February 28, 2009	13
February 15, 2009	March 1, 2009	14
February 15, 2009	March 15, 2009	28
March 1, 2009	March 15, 2009	14
March 15, 2009	March 31, 2009	16
March 31, 2009	TBD

Now, let’s assume that no applications were received in January and that the service standard for this type of application is 15 days (applications are processed in 15 days).

There are two ways of looking at this. The typical view is to measure from the receive date. That would measure the number of days it took to process an application from the day on which it is received. The other possibility is to measure based on the date on which the application’s processing was finished. This method is less common.

Here is a tricky question: “What was the average processing time for applications in February?” The question is tricky because it doesn’t give you a reference for which date to use as a base, are we talking about the applications received in February, or the applications processed (finished) in February? Here are the options:

Average Processing Time of Applications by Received Date
February	17.25
March	TBD

Average Processing Time of Applications by Processing Finish Date
February	13.5
March	18

According to the received date base, 75% of applications received in February were processed within the service standard (15 days). But of the applications processed in February, 100% were processed within the service standard (if we consider that no applications were received in January, which we do in this example).

Normally, I expect most organizations to use the first method, based on the date on which the application is received.

So the fiscal year is over (ends March 31), and it’s now April 7, 2009. Can you produce accurate statements on your performance against the service standard for applications received in March, using the first method (based on the date the application is received)? The answer is no, because your service standard is 15 days, and only 7 days have passed since the last day of March. April 15 is the last day for which the applications received March 31 will still be processed within the service standard, so you would only be able to know how many of the applications received in March were processed within the service standard at the end of the business day on April 15. That’s assuming you have instant access to up-to-date information, which is not always the case. If there is a delay between the time an application is processed (processing finish) and when you know about it, then you also need to take that into account. This is often the case for electronic systems, there is often a delay between the data entry into the application, and the availability of the data in data marts or cubes used for reporting.

In conclusion, be aware of your service standards, of how your performance is calculated, and of the delays in the availability of data when you are doing your year end reporting, or you could end up with inaccurate performance statements.

Efficiency and Effectiveness

Efficiency and effectiveness are two closely linked concepts that are, unfortunately, often misunderstood. So what are efficiency and effectiveness?

Efficiency

Efficiency relates to the amount of resources (input) used to achieve a goal (output). Efficiency can generally be conceived of as the ratio of the output to the input of any system. An efficient system would have a high output to input ratio, that is, it would produce a lot of the output for little of the input. There are different situations that can describe a gain in efficiency:

1. producing more output with a given amount of input
2. producing a given amount of output with a reduced amount of input

The other 2 situations representing possible efficiency gains,

3. producing more output with more input
4. producing less output with less input

depend on the measure of the ratio of output to input. In the first case, an additional amount of input must lead to the creation of more additional units of output than the current value of the ratio for the situation to represent a gain in efficiency. In the second, a reduction of one unit of input must be accompanied by a reduction of less units of output than the current value of the ratio. In other words, the output to input ratio must increase.

Effectiveness

Effectiveness relates to whether the means used lead to the end. In other words, whether the action has the intended result. In the business context, it most often refers to the extent to which a program or service is meeting its stated goals and objectives (or outcomes). Improving the effectiveness usually means changing something (normally the action) that will increase the extent to which the goal is met. For example, improving the effectiveness of an anti-smoking program would mean changing something that would increase the percentage of people who smoke (if that’s the indicator you decide to use to measure the achievement of the goal).

It should be noted that a program’s effectiveness can be increased by changes outside the scope of influence of the program. Changes external to a program can impact the effectiveness of a program, both positively and negatively. That is part of the reason of environmental scanning. Effectiveness is one of those concepts where it is important to understand the difference between correlation and causality.