Matrices/Continuous Improvements:
Continuous Improvements is all about people, process, and tools. Continuous Improvement is “the ongoing effort to improve products, services, and processes by making small, incremental improvements within a business.” Continuous Improvements look into the big picture, to consider all aspects that affect the ability to develop and release projects.
To have great Continuous Improvements have to have to define key performance indicators (KPI) for the successful and long run existence of the company. A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. Of course, it’s still important to track things like total revenue, total bookings, and cash flow to measure business success. But for Platform-as-a-service and cloud-first organizations specifically, the following metrics are important indications of profitability.
Major KPI for United Airlines are listed below:
- Return on Investment:
ROI is used to evaluate the efficiency of investment. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost.
ROI= (Current Value of Investment−Cost of Invest)/Cost of Investment
ROI= (120000$-103000$)/103000$= 16.50%
- Payback Period (PBP):
The time required to recover investment for the project. In other words, it is the time required to reach the Break-even point.
For E.g.
Total investment = 103000$
Revenue cash flow yearly= 55000$
PBP= Total investment/Revenue
PBP= 103000$/55000$= 1.87 years
iii) Monthly Recurring Revenue:
This KPI measures the monthly revenue of any company. The total monthly revenue value for United once implementation will be 55000$.
- iv) Customer Churn:
Customer churn means the number of Customers quit United Airlines services or switch to competitors.
To lower customer churn united has to pay attention to the percentage of customers who cancel their service in a given time. It will offer important insights into how well we are meeting customers’ needs.
A customer success manager can proactively help identify issues so we can be more proactive in reducing churn for united Airlines.
- V) Delivery lead time:
How long it takes for a customer to get service once requested. It is measured in days less number of days better. After implementing a Cloud-based system in United Airlines, we will be able to provide any service with 1 day.
Continuous Improvements strategy and KPI metrics will provide the following benefits to United Airlines:
- Quantify ROI:
With great continuous improvement strategy, United Airlines would be able to quantify ROI. It means it will have an accurate picture for companies Revenue and cost. It will help to measure the velocity and quality of customer satisfaction achieved from new implementation.
- Improved Customer digital Experience
Improved customer digital experience is another major benefit of a continuous improvement strategy. Continuous Improvements ensure getting better not only to becoming faster and delivering with fewer defects but also, we meet customer needs and experiences.
Uses cases for Continuous improvement strategy:
- Lack of KPI
- Lack of instrumentation and tools
- Inability to trace investment concerning cost.
If any of the above situations occurs in the organizations then its time to think to change the continuous improvement process
PDCA Process :
References:
https://blog.kainexus.com/continuous-improvement/6-principles-of-the-continuous-improvement-model
https://www.skykick.com/blog/5-cloud-kpis-to-measure-and-manage-your-cloud-services-business/
