Development Bank of Ethiopia

Research Process

Scorecard (updated)

January, 2010
Table of content
page
1. Introduction-----------------------------------------------------------------------------------3

1.1. General Background----------------------------------------------------------------------3

1.2. The Purpose Statement-----------------------------------------------------------------4

2. The Research Process Strategic Objectives---------------------------------------------7

3. Research Process Strategic Objectives Map------------------------------------------10

4. Research Process Performance Measures and Targets----------------------------------12

4.1. Performance Measures----------------------------Error! Bookmark not defined.

5. Targets and Thresholds-------------------------------------------------------------------21

5.1. Target and Target setting--------------------------------------------------------------21

5.2. Process Level Performance Standards (Thresholds)------------------------------22

6. Research Process Strategic Objectives and Initiatives-----------------------------27

7. Process Initiatives Description----------------------------------------------------------28

2
1. Introduction

1.1. General Background

Development Bank of Ethiopia is one of the government institutions that play a

significant role in promoting the development process of the country in general and the
five year Growth and Transformational plan in particular. To well address the mission it
is instituted for, the Bank has redesigned its service giving process through Business
Process Reengineering (BPR) principles, and a year has passed after BPR is launched to
be implemented by all processes, regional and offices of the Bank.

The overall implementation of the newly redesigned process is bringing a significant

improvement in the service provision of the Bank. To scale up the changes those are
already in place to a higher level, the Bank is currently developing a Balanced Score Card
(BSC) system. The BSC, which is widely viewed as multidimensional tool, in areas of
performance measurement, strategic management and communication tool; have
already been developed at a corporate level, approved by the concerned body and
communicated to the Bank's Staff. Following, the scorecard of the strategic core
business units (credit service scorecard) has been cascaded.

The research process is taken to be one the strategic business unit that would be
expected to cascade the credit service scorecard. This document dwells on the Research
Process scorecard cascaded from the credit service BSC and aligned with other strategic
units’ scorecard. Next, the purpose statement for which the Research Process is
redesigned will be defined. In part two the Research Process strategic objectives are
defined, in part three and four respectively, the strategic map and measurement
systems are developed. The theme of part six is the selection and mapping of initiatives,
and finally, initiatives description is made in part seven.

3
1.2. The Purpose Statement

The Research Process is redesigned to provide data and information mainly to loaning
processes of the Bank namely the Appraisal Sub Process, the Credit Process, the
Approval Team, Risk Management Process, the Project Rehabilitation and Loan
Recovery Sub Process and the Branches. According to the newly redesigned process, the
outputs that are expected from the Research Process are:
a. New and updated commodity study,
b. New and updated model bankable projects preparation,
c. Cross cutting project supporting data,
d. The machinery ,equipment, furniture and fixture data base
development(Machinery data base development),
e. The civil cost development, and
f. Building and collateral manual development.

The redesigned process has six virtual teams where two of them are engaged in
providing engineering data and information on outputs mentioned above in number (d),
(e) and (f) while the other four case teams produce the remaining out puts. The Process
has the responsibility of collecting, summarizing, and organizing financial, market, and
civil and technical data, and availing of them to its internal customers.

Given that some assumptions which were made during the Research Process
redesigning have been not satisfied, the process has achieved encouraging results in the
last two years. Table 1.1 summarizes the achievement of the process in the last two
years comparing with the plan made by the newly redesigned process.

4
Table 1: the Research Process achievements
Sr. Description Research Executed Average Performance
No. process
deliverables 2008/09 2009/10 (%)
(for a year)
1 New Commodity Study 14 13 10 11.5 82
2 Updated Commodity 14 5 4 32
4.5
Study
3 Model Bankable Project 6 - -
-
Preparation
3 Model Bankable Project 2 - -
-
Preparation updated
5 Cross Cutting Project 4 1 2 38
1.5
Supporting Data
6 Machinery Data Base 40 22 9 39
15.5
Development
7 Civil Cost Development 4 2 6 4 100
8 Building Collateral - - - - -
Manual Development

The responsibility of the Process undoubtedly in the newly designed process is

paramount. Although the process is striving to satisfy the needs of its customers, lots
are needed to be done to satiate the ever increasing information and data requests.
The Research Process internal customers (all are the loaning units of the Bank) need
reliable and quality research outputs in the stipulated time.

The major problems that have impeded the process not to fully perform as per the plan
are:
 Poor internet connectivity and electronic information accessibility,
 Unwillingness of respondents to provide reliable data and information as per
the scheduled time,
 The number of research staff and hence, teams are not fulfilled,
 Lack of transportation service as per the schedule,
 the process was at its learning curve,

5
  Some staffs members, especially engineers have been participating in other
processes’ works,
 The experience and the qualification of the employee of the process are not
aligned with the requirement of duty.

The cascading of the BSC, beyond creating awareness on the Banks Mission and Vision,
it will help the employees to visualize the impacts of their day to day action on the
execution of the Bank’s strategic objectives in general and the Process’s in particular. It
put a framework under which the problems and the constraints listed above would be
dealt with and possibly be minimized. Most importantly, the cascading of the BSC will
introduce a holistic measurement system in the Process under which the performance
of the process will be measured at all levels in different perspectives.

6
2. The Research Process Strategic Objectives

Development Bank of Ethiopia has revalidated its mission, vision and values aligning
with the responsibility given by the government. For the Purpose of BSC system
development, the corporate level primary strategy [Improvement strategy] and other
key secondary strategies derived from the primary strategy are all formulated. The
customer and stakeholder analysis, the thematic areas that the Bank needs to focus on
and the perspectives under which the achievement of the Bank are to be monitored,
evaluated and measured have all been formulated and gotten their final approval.

Following, seventeen corporate level strategic objectives have been set in line with the
perspectives. The objectives are presented with their commentaries and the possible
outcomes in the corporate Balanced Score Card Document. Next, the strategic business
unit of the Bank, the credit service, has cascaded its own scorecard from the corporate
BSC. From the seventeen corporate strategic objectives, fourteen credit service strategic
objectives, which are believed influence the corporate strategic objectives have been
cascaded.

As the research process is one of the strategic business units, it has also need to cascade
the objectives of the credit service that it influences directly. Accordingly, about eight
such objectives are indentified.

It is found that the Research Process can not directly influence the Customer of the
Bank; hence, no objective is developed in that perspective. The Process could enhance
the development and finance perspective directly only through the reducing of
controllable expenses. Table 3.1 presents those objectives with their respective
commentaries and outcomes.

7
Table 2: Process Strategic Objectives, Objectives Commentary and Outcomes
Perspectives Process Strategic Objectives Commentary Outcomes
Objectives
Expenses are recurrent costs that are incurred in producing research
Development/ 1. Reduce Manageable outputs. Saved Cost
Finance Expenses Expense reduction is realized by reducing of administrative expenses
and controlling wastages.
Customer

Service implies the information and data that are provided by

2. Improve Service research process to enable the Core Process and Risk Management
Internal
Delivery Process to make decisions based on reliable data and information.
 Effectiveness
Business
This is achieved through enhancing team spirit and increasing
 Efficiency
Process
productivity. These improvements would result in releasing quality
research outputs; reduce the cycle time taken to deliver the output
and the cost of producing the output itself.
Learning and 3. Improve Process Research Process
This refers to the acquiring and aligning of Research Process
Growth Employee Core Employee Readiness
employees with the necessary behavioral attributes, skills and
Competence
knowledge, which are required for achievement of the strategy
particularly, in areas of producing quality research out puts and
releasing of the outputs within the stipulated time.

8
Perspectives Process Strategic Objectives Commentary Outcomes
Objectives
4. Improve Process This refers to the improvement of Research Process Capacity to
Information properly capture, store and process various types of data and Reliable and Readily
Organization & information by employing the information technology and networking Available Research
Management system of the Bank including the documentation Process outcomes Information
and knowledge.
5. Improve Process This refers to attitudinal change and alignment of values of Research
Process Objectives
Culture Process employees to Process Strategic Objectives by creating the
Oriented Research
environment for strategic thinking, and team work, and productive
Process Employee
work culture.
6. Improve Process This refers to the alignment of skill, budget and performance, with the Strategy Focused
Alignment Research Process strategic Objectives Process
This refers to the realization of leadership with the necessary
behavioral traits and technical skills so as to inspire and influence the
7. Enhance Leadership workforce towards achieving the strategic objectives of the Research
Focus in Strategy and
Competency & Good Process. Good Governance is reflected in the institution of
Transparency
Governance transparency and accountability including initiation for developing
policy, procedures, process improvement, and clarity in decision
making hierarchy.

9
3. Research Process Strategic Objectives Map

The objective map is a summarized pictorial representation of the strategic

objectives through linking of them under the perspectives, portraying their
relationships.

The Research Process Objectives are linked together in patterns of cause and effect
relationship beginning from the drivers in the learning and growth perspective
through the value creating process of internal business process up to the outcomes
shown under Finance/Development perspectives. (Please refer to the map in the
figure 3.1).

10
Figure 3: Process Objective Map

Reduce manageable
Development/ costs
Finance

Customer

Improve Service
Internal Business Delivery

Process

Improve Process Employee Core Competence

Improve Process
Improve Process
Information
Learning and Culture
Organization &
Growth Management

Improve Process
Alignment
Enhance Leadership
Competency & Good
Governance

11
4. Research Process Performance Measures and Targets

Performance measures are metrics used to provide an analytical basis for decision-
making and to focus attention on what matters most. They measure how the process is
doing at the job of meeting its objectives.

Performance measures are needed to:

 Monitor the implementation and effectiveness of the process in meeting the

objective set;
 Determine the gap between actual and targeted performance;
 Determine the process’s effectiveness and operational efficiency.

Accordingly, table 5.1 presents the measurements, the formula and the unit of
measurement of the objectives developed in the preceding parts. The table further
presents source of information and the responsible body that verifies the execution of
the objectives.
Table 4: Performance Measures
Perspec Process Unit of Source of Reporting Responsible
Measure Formula Clarification
tives Objectives Measure Information Frequency Unit
1. Reduce
Development/

It measures how much

Manageable Percentage of Actual Costs
costs are utilized by the Financial
Controllable Total planned % Quarterly SPDEP
Finance

Expenses process compared with Reports

costs reduced process costs
the total planned costs.

2. Improve The no. of Change Mgt

The no. of It measures the no. of Documents
Service commodity Bureau
commodity new commodity studies from Semi-
studies %
Delivery studies produced by the Research annually
produced
produced process Process
annual plan
The no. of The no. of % Change Mgt
It measures the no. of Documents
commodity commodity Bureau
Internal Business Process

updated commodity from Semi-

studies updated studies
studies produced by the Research annually
updated
process Process
annual plan
The no. of the no. of It measures the no. of % Documents Semi- Change Mgt
model bankable model bankable model bankable from annually Bureau
projects projects projects produced by Research
produced the process Process
produced
annual plan
Perspec Process Unit of Source of Reporting Responsible
Measure Formula Clarification
tives Objectives Measure Information Frequency Unit
the no. of % Documents Semi- Change Mgt
the no. of It measures the no. of
updated from annually Bureau
updated model updated model
model bankable Research
bankable bankable projects
projects Process
projects produced by the
produced
produced process
annual plan
the no. of cross the no. of It measures the no. of % Documents Semi- Change Mgt
cutting project cross cutting cross cutting project from annually Bureau
supporting data project supporting data Research
produced supporting data produced by the Process
produced process
annual plan
The n no. of the no. of It measures the no. of % Documents Semi- Change Mgt
machinery, outputs machinery, equipment, from annually Bureau
equipment, produced furniture and fixture Research
furniture and annual plan data base development Process
fixture data produced by the
base developed process

14
Perspec Process Unit of Source of Reporting Responsible
Measure Formula Clarification
tives Objectives Measure Information Frequency Unit
The no. of unit the no. of It measures the no. of % Documents Semi- Change Mgt
price unit price civil costs developed by from annually Bureau
development development the process Research
for civil works for civil works Process
produced
annual plan
the no. of It measures the no. of % Documents Semi- Change Mgt
The no. of
building collateral manuals from annually Bureau
building
collateral produced by the Research
collateral
valuation Process Process
valuation
manual
manual
produced
produced
annual plan
Average cycle No. of working It measures how long it Days Research Quarterly Change Mgt
time of days takes on average for Process Bureau
producing new Research Process to
commodity release a new
studies commodity study.

15
Perspec Process Unit of Source of Reporting Responsible
Measure Formula Clarification
tives Objectives Measure Information Frequency Unit
Average cycle It measures how long it
time of takes on average for
producing No. of working Research Process to Research Change Mgt
Days Quarterly
updated days release updated Process Bureau
commodity commodity study.
studies
Average cycle It measures how long it
time of takes on average for
No. of working Research Change Mgt
producing Research Process to Days Quarterly
days Process Bureau
model bankable release a model
project bankable Project.
Average cycle It measures how long it
time of takes on average for
producing No. of working Research Process to Research Change Mgt
Days Quarterly
updated model days release a model Process Bureau
bankable bankable Project
projects
Average cycle No. of working It measures how long it Days Research Quarterly Change Mgt
time of days takes on average for Process Bureau
producing cross Research Process to a
cutting project release cross cutting
supporting data project supporting data

16
Perspec Process Unit of Source of Reporting Responsible
Measure Formula Clarification
tives Objectives Measure Information Frequency Unit
Average cycle It measures how long it
time of takes on average for
No. of working Research Change Mgt
developing research Process to Days Quarterly
days Process Bureau
machinery data develop a machinery
base data base
Average cycle It measures how long it
time of takes on average for
No. of working Research Change Mgt
developing a Research Process to Days Quarterly
days Process Bureau
civil cost develop a civil cost
manual manual
Average cycle It measures how long it
time of takes on average for
developing Research Process to
No. of working develop a collateral Research Change Mgt
building Days Quarterly
days manual Process Bureau
collateral
valuation
manual

17
 Perspec Process Unit of Source of Reporting Responsible
Measure Formula Clarification
tives Objectives Measure Information Frequency Unit
Rework rate At process level rework
refers to the back and
forth movement of
works between the
No. of reworks Loaning Monthly/ Change Mgt
process and its internal %
output Units Quarterly Bureau
customers due to major
drawbacks which is due
to not releasing quality
output
3. Improve Strategic Skill Staff qualified Strategic area refers to Ratio Research Quarterly SPDEP
Process Coverage Ratio in strategic jobs key services required to Process
Learning and Growth

Employees Total required accomplish the Process

Core for the jobs strategic objective. It
Competence measures the strategic
skill gap between what
is needed and what is
existed.

18
Perspec Process Unit of Source of Reporting Responsible
Measure Formula Clarification
tives Objectives Measure Information Frequency Unit
Personal Goal Measures goal achieving
Achievement level of process
employees who work in
Goal achievers Research
strategic areas by way % Quarterly SPDEP
Total employee Process
of average employee
performance evaluation
in each area.
4. Improve Process It measures systematical
Process Information organization of research
Information Accessibility Positive information and data
Survey
Organization Ratio Responses availability of reliable, Rate Quarterly Change Mgt
Results
& Total Responses relevant and timely
Management information at the right
time.
5. Improve Process culture Level of An index of measurement to be
Process Change Index awareness on developed based on a determined
Culture process strategic complete evaluation of in the 1st
objectives process staff‘s awareness year
of process strategic
objectives
Team Team It measures level of to be
Development development relationship among peers determined
Index stage against and teams, among process in the 1st
required staff and leaders, etc. year
standard

19
Perspec Process Unit of Source of Reporting Responsible
Measure Formula Clarification
tives Objectives Measure Information Frequency Unit
6. Improve Process employee It refers to level of
Process satisfaction rate satisfaction of process
Positive response Survey Research
Alignment employees in relation to % Annual
Total responses Results Process
their job assignment and
work environment.
Strategic Informed process It measures proportion of Survey Annual
Awareness staff research staffs that can Results Research
%
Total process identify process’s strategic Process
staff priorities.
7. Enhance Leadership Skill Refers to availability of
available
Leadership Coverage Ratio process’s skilled
qualified
Competency leadership against Loaning Research
research leaders % Annual
& Good required leadership to Units Process
total required
Governance successfully achieve the
leaders
strategy.
 Leadership An index developed based
Development on a complete evaluation
Leadership
Index of empowerment,
quality against Survey Research
succession plan, % Annual
established Results Process
leadership skill, behavior,
standard
producing desired results,
etc.

20
5. Targets and Thresholds

5.1. Target and Target setting

A target is a quantitative representation of the performance measure at some point in

the future (i.e. a desired future level of performance). A number of basic issues have
been closely reviewed and assessed in order to establish strategic targets for the
Research Process. The primary task included baseline determination, which involves the
specification of current level of performance that is based on exact results or proxies.
Baseline determination also involves the undertaking of surveys and assessment of
performance in various areas in the last two years.

Targets setting can theoretically have a number of “fates”; which are (a) total failure
(less that 50% performance or achievement), (b) failure to achieve a target (mild
failure), (c) target achievement and (d) exceeding targets set for achievement.

The performance ranges of targets which are called thresholds; can serve as a basis for
determining or judging performance in the future, i.e. as regards target achievement.
Thresholds are standards which are laid upfront to determine or take position in the
future as regards the level of performance for each and every objectives defined.

Thresholds as defined here under:

 Blue (outstanding), which represents outstanding performance,
 Green (Above Satisfactory): which represents acceptable performance range,
 Yellow (Satisfactory) : which shows marginal performance and therefore caution &,
 Red (Unsatisfactory): This depicts below target performance.
 5.2. Process Level Performance Standards (Thresholds)

Based on the Bank’s performance standard levels or bands, the process performance
level standards are shown in the following table.

Table 5.1: Process Performance and thresholds

S/N Performance standard level
1 Outstanding ( exceeding
expected performance level)
2 Above satisfactory (meets
expectations)
3 Satisfactory (meet most
expectations)
4 Unsatisfactory
(unacceptable level of
performance)
Score Range Definition(description of level)
≥ 100%  Superior performance or accomplishment
expressed by ≥100% target achievement;
 Consistently exceeding expectations
90≤X≤100%  Demonstrates all the expected results
 Accomplishments are clearly in accordance
with expectations or performance score
ranges;
75%≤90%  Demonstrates most of the expected results;
 Achievement that is at least within the
targeted score range
<75%  Achievement that is less than 75% of
target;
 Performance improvement review required;
 Failure to demonstrate any of the expected
results

22
Table 5.2: Research Process Base Line and Targets
Process Loaning Units Lead and Lag Baseline Targets(by quarter)
Targets
Strategic Measures Measures (beg. of the 1 St
2nd 3rd 4th
(year 1)
Objectives Lead Lag year)
1. Reduce 1. Percentage of  Average cycle Percentage of To be
Manageable Controllable costs time controllable costs determined in
Expenses reduced reduced 1st year
2. Improve 2. the no. of commodity  Employee core The no. of outputs
studies produced competence produced
service
3. the no. of commodity  Employee core The no. of outputs
delivery studies updated competence produced
4. the no. of model  Employee core The no. of outputs To be
bankable projects competence produced determined in
produced the 1st year
5. the no. of updated  Employee core The no. of outputs To be
model bankable competence produced determined in
projects produced the 1st year
6. the no. of cross  Employee core The no. of outputs
cutting project competence produced
supporting data
produced
7. The no. of machinery  Employee core The no. of outputs
data base developed competence produced
8. the no. of unit price  Employee core The no. of outputs
development for civil competence produced
works
 Process Loaning Units Lead and Lag Baseline Targets(by quarter)
Targets
Strategic Measures Measures (beg. of the 1 St
2nd 3rd 4th
(year 1)
Objectives Lead Lag year)
9. the no. of building  Employee core The no. of outputs
collateral valuation competence produced
manual produced
10. Average cycle time  Rework Rate Average Cycle Time
of producing new
commodity studies
11. Average cycle time  Rework Rate Average Cycle Time
of producing
updated commodity
studies
 Rework Rate Average Cycle Time To be
12. Average cycle time
of producing model determined in
bankable project the 1st year
13. Average cycle time  Rework Rate Average Cycle Time To be
of producing determined in
updated model
the 1st year
bankable projects
14. Average cycle time  Rework Rate Average Cycle Time
of producing cross
cutting project
supporting data

24
 Process Loaning Units Lead and Lag Baseline Targets(by quarter)
Targets
Strategic Measures Measures (beg. of the 1 St
2nd 3rd 4th
(year 1)
Objectives Lead Lag year)
15. Average cycle time  Rework Rate Average Cycle Time
of developing
machinery data base
16. Average cycle time  Rework Rate Average Cycle Time
of developing a civil
cost
17. Rework rate  Employee core  Rework Rate To be
competence determined in
the 1st year
3. Improve 18. Strategic Skill No. of training Strategic Skill Coverage to be
Process Coverage Ratio provided on Ratio determined in
Employees strategic jobs the 1st year
Core No. of staff
Competence participated on
strategic job
training
19. Personal Goal Strategic Skill Personal Goal to be
Achievement Coverage Ratio Achievement determined in
the 1st year
4. Improve 20. Process Information  Process Information to be
Information Accessibility Ratio Accessibility Ratio determined in
Organization the 1st year
&
Management

25
 Process Loaning Units Lead and Lag Baseline Targets(by quarter)
Targets
Strategic Measures Measures (beg. of the 1 St
2nd 3rd 4th
(year 1)
Objectives Lead Lag year)
5. Improve 21. Process Culture No. of staff aware Credit service Culture to be
Process Change Index of mission, Change Index determined in
Culture vision and the 1st year
values
22. Team Development No. of staff Team Development to be
Index meetings Index determined in
the 1st year
6. Improve 23. Employee No of recurring Employee Satisfaction to be
Process Satisfaction Rate staff complaints Rate determined in
Alignment the 1st year
24. Process Strategic Strategic awareness to be
objectives determined in
awareness the 1st year
7. Enhance 25. Leadership Skill Leadership skill to be
Leadership Coverage Ratio coverage Ratio determined in
Competency & the 1st year
Good 26. Leadership Leadership to be
Governance Development Index Development Index determined in
the 1st year

26
6. Research Process Strategic Objectives and Initiatives
Initiatives are the specific programs, activities, projects, or actions embarked on to help ensure meet
or exceed our performance targets. The following initiatives are chosen that make the process meet
its target.

Table 6: Initiatives
Perspectives Process Strategic Objectives Initiatives
Development/ 1. Reduce Manageable Expenses  BSC Implementation
Finance
Customer
 BSC Implementation
 Training
Internal  Process Records & Archive
2. Improve Service Delivery
Business Process Management
 Redeployment
 Base line development
 BSC Implementation
3. Improve process employees core
 Training
competence
 Base line development
 BSC Implementation
4. Improve process information  Process Records & Archive
organization & management Management
 Base line development
Learning  BSC Implementation
&  Training
5. Improve process culture
Growth  Redeployment
 Base line development
 BSC implementation
 Training
6. Improve process alignment
 Redeployment
 Base line development
7. Enhance leadership competency &
 Training
good governance

27
 7. Process Initiatives Description
Table 7: Description of initiatives
Ser.
Initiative Description Strategic Impact Areas of Action Objectives Covered
No.
1. Training This involves capacity  Process readiness;  All strategic job families  Improve Employees
improvement program to  Efficiency and effectiveness;  Leadership Core Competency
promote or upgrade core  Enhance Leadership
competence mainly in strategic Competency
job.  Improve team
development
2. BSC implementation This relates to awareness  Successful strategic execution  Developing BSC, Arranging  All objectives
1 creation, automation, training, and management awareness workshop,
monitoring and evaluation. monitoring and evaluation
3. Redeployment This is an action taken to mitigate  Improved organizational  Strategic job families;  Improve employee
skill gaps in strategic job families readiness;  Leadership core competence
through placement or alignment  Improved efficiency and
existing employee skill, behavior, effectiveness
etc with jobs.  Improved service delivery

4. Process Records & This is related with the  Improved service delivery  Its process  Improve Service
Archive organization, safety and ease of Delivery
Management accessibility of data, information.  Improve Information
Organization & Mgt

28