Measurement Techniques used in Profit Profiler

Profit Profiler offers two different approaches to business processes and performance measurement:

Activity Sampling - if you are looking for cost allocations by line of business, brokers, major task etc you will want to perform a sampling study. Sampling will allow you to confidently make decisions that can affect your entire approach to your business.

 

Activity Logging - if you are looking for the costs and cycle times to perform specific business processes then you should perform a logging study. Logging rapidly provides accurate measures that allow you to make decisions that impact the specific process studied.

Sampling and Logging are often used together. For example  sampling results will highlight the areas with highest potential return if they are improved. Logging is used to analyze the specific processes in those areas and then to monitor the effect of changes you make.

Profit Profile provides you with detailed standard reports. In addition your project data for both Activity Sampling and Activity Logging are provided to you in Access and Excel formats for your own analysis and use as required. 

More discussion on both techniques follows:

Activity Sampling

In a sampling study the first variable will typically be the person who is performing the task i.e. manager, underwriter, broker etc.  This would be followed by their major tasks and so on as you drill down into conditions you are trying to evaluate. 

Profit Profiler uses a similar technique used in projecting who is going to win an election. The companies who conduct polls do not ask every person who they are going to vote for. Rather they poll (what they believe to be) a representative sampling of the voting population. If they ask enough people they can say with a quantifiable degree of certainty - the magical “margin of error”, what the likely outcome is going to be.

Similar to the election pollsters, Profit Profile automatically samples your group of service providers e.g. the staff in the customer service department of a financial services company. It does this by prompting them on a random basis via their Internet browser to input the details of what they are doing at that point in time. 

As the sampling progresses and more entries are made by the participants the performance of the whole group can be projected with defined confidence limits.  It takes surprising few observations to predict with a high degree of accuracy what is occurring. See Sampling Accuracy.

The sampling results are they applied to the cost driver information to present you with sorted results identifying highest to lowest value activities. See Profit Profiler Automatic Results.

All data collected is also provided to you in Access and Excel format for your additional analysis as required.

Activity Logging

In a logging study the first variable will typically be a major task you wish to quantify e.g. claim processing, updating accounts, customer support etc. This would be followed by the characteristic that each task could have e.g. for clams processing you could have residential, commercial, government etc.

In Profit Profiler's Activity Logging each activity has a start and an end time. The time between the start and the end time is called the elapsed time. In Activity Logging the user captures the start and end time, details of the activity performed and a quantity of that activity performed during the elapsed time.

To save the details of the transaction the user then indicates whether the transaction performed is:

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1. Typical – the user feels that the process just completed is representative of what it takes to complete the task.
   
   
2. Other – the user feels the process just completed is not representative of the task. They can optionally enter a note to indicate why they feel it is not representative in the note field. These notes can be valuable in identifying process improvement opportunities.
   

Activity Logging results display the average time and cost for each transaction along with the statistical accuracy of the data. See Profit Profiler Automatic Results.