Stagecoach Group Plcs Analysis of Performance - Justification for Retaining or Removing KPIs - Case Study Example

Stagecoach Group PLC. An Analysis Report of Performance: Justification for Retaining/Removing these KPIs and Identification of any Additional KPIs Name: University: Course: Tutor: Date: Stagecoach Group PLC. An Analysis Report of Performance: Justification for Retaining/Removing these KPIs and Identification of any Additional KPIs Summary This report seeks to elaborate on the key performance indicators used to measure the performance of the Stagecoach Group as well as identifying other KPIs that may appropriately be incorporated. In addition, a balanced scorecard is developed to illustrate the links between the KPIs, stakeholder, and the Stagecoach Group’s overall objectives. Introduction Stagecoach Group (2015) elaborate on Stagecoach as a multinational public transport provider group that operates in the UK, the US, Canada, and other parts of Europe. It operates buses, trains, coaches and trams. It is a limited public with its offices in Scotland. The shares of the company are traded publicly and no single share holder has absolute control over the company. Moreover, it has its listing in the London Stock Exchange. The KPIS of Stagecoach Group Stagecoach group’s key performance indicators are wide and wild and are aimed at the achieving sustainability growth as the main objective of the group. They are designed to aid in the continuity in the financial improvement, environment, and operational performance of the business not only in the UK but also in the North America (Stagecoach Group, 2015). In addition, they assist in monitoring how the company delivers service to the customers, safety, and management of carbon emission (Stagecoach Group, 2012). Stagecoach Group (2015) illustrates that the company has devised various channels of monitoring safety as a performance indicator. However, businesses acquired or relinquished yearly are exempted from these safety KPIs. One of the six safety indicators is that of the UK regional operating buses where the number of accidents per a million miles these buses travelled is monitored. These accidents have to be blameworthy. In 2012 the figures noted of such cases were 20.6 and in 2013 the figure dropped to 19.3 while in 2014 the figure further dropped to 19.1. The second indicator entails the UK buses operating in London. In 2012, within this facet, the figure of blameworthy accidents per a million miles covered was 25.0 and in 2013 it increased to 27.9 while in 2014 it dropped to 26.2 in comparison to the previous year (Network Rail (2014). The third category encompasses those that operate in the US where in 2012 the accident count was 5.2 (Stagecoach Group, 2015). The following year it dropped to 4.8 while in 2014 it slightly increased to 4.9. The fourth, fifth and sixth categories encompasses the South West Train, East Midlands Train, and Virgin Rail group operating in West Coast respectively. These categories incorporate time lost by the workforce per 1000 staff due to injuries. For instant, in 2012, South West train recorded 1.8 and East Midland recorded 1.6 while the Virgin Rail was 1.5. The following year the figures dropped to 1.5, 1.4 and 1.4 respectively. In 2014, these figure dropped further to 1.4, 1.3 and 1.3 respectively. However, the Stagecoach Group targets a decrease in these phenomenons each year with the cumulative target being zero (Agility, 2015). The other primary performance indicator measurement is the environmental factor. The company has sustainability strategy that aims at the reduction of the emission of carbon as well as the carbon intensity in the environment. Their businesses have had environmental impacts both in the UK and North America (Marr, 2012). The company has come to the realization of the reality of climate change as a serious challenge all over the world. They have devised greener and smarter travelling techniques in an attempt to provide a solution to this glaring problem. They have embraced the concept of getting individuals out of their personal cars into the public transport with the aim of minimizing carbon emissions. Some of the other initiatives the company employs for the sustainability of the environment are conducting tests that provide alternative fuels, improvement of the efficiency of the energy, recycling of wastes, and the conservation of water. Moreover, each year, the firm sets challenging objectives that factor in activities aimed at increased recycling and elimination of waste; reduction of carbon emission; and improving awareness and education of the staff, society and passengers on the importance of the environment (UK Bus Awards, 2013). South West Train (2015) affirms that through the group’s safety and environmental plans, it manages and monitors the environmental impact by monitoring its energy consumption pattern, waste disposal mechanism and upholding ideal environmental practices at the depots and stations. In 2011, the South West Train launched a mixed recycling scheme for all its stations. In this scheme, most wastes collected are reused or recycled while the remaining are converted into fuel and used for the generation of energy. In addition, the wastes that are considered hazardous to the humans and the environment are stored and disposed with a lot of care. According to PricewaterhouseCoopers LLP. (2011), the third primary indicator entails focus on customer and customer service. The measure of the delivery of services involves the regional and London operating buses as well as the rails. It measured the reliability of the planned miles to be operated and that which was operated. In the rail transport sector, punctuality measurement is incorporated in such a way that the scheduled arrival time for the trains to all stations is factored in. This enables the company to determine how efficient the rail sector is. In the US this KPI is not incorporated. In addition, this KPI is not illuminated for acquired or relented business during a particular year of operations. The final primary KPI of this firm is growth which (organic growth). These performance measurements involve monitoring the increase and decrease of passengers that are using the company’s services yearly. 2014 report indicated that there were increase in the passenger journey’s for the UK regional buses due to good weather unlike the South West Train and North America that were affected by winter weather which tended to be severe (Mandri-Perrott, Menzies, World Bank & Public-Private Infrastructure Advisory Facility, 2010). Retention of the KPIs and additional KPIs The above mentioned KPIs should be retained by the firm as they reflect the true performance of the company. They illuminate areas in which the company should readjust to appropriately and effectively deliver their services to the clients. According to Stagecoach (2015) report, the KPI that involves the environmental concern of the company illustrate the company’s consciousness to the provision of better services in an environmentally friendly business climate. Emerging environmental issues such as climate change require collaborative efforts from all angles. Moreover, Stagecoach uses raw materials that emit carbon to the environment which if not regulated can be extremely detrimental. The recycling and waste management practices have proved to be cost effective thus minimizing input cost and optimizing profits. Besides, the environment as an indicator, customer satisfaction is an important component that most companies incorporate as it helps in not only in achieving long term but also the short term goals. However, there are various ways in which the company can increase customer satisfaction. For instant, the firm has the mandate of ensuring that its employees are satisfied. Satisfied employees correlate with their relation with the customers in that when they are highly satisfied, their performances are likely to sky rocket. This in turn reflects of their relationship with the clients. One way of achieving this is by ensuring that the vision and the mission of the company is congruent and at least align with those of the workers. This attempts to minimize conflicts that emanate between organizations and workers (Stagecoach, 2015). The additional KPIs that the company should be add to its current KPIs are: increasing the use of the buses; promote travelling by modes that are sustainable; promote cycling and working as a way of reducing emission of carbon and other gases into the environment; and intensify the concept of customer satisfaction in order to maximize the firm’s output (Parmenter, 2012). Balanced Score Card Kaplan & Norton (2006) vindicate that there are four approaches or perspectives that are embedded in the balanced scorecard. These perspectives help in the identification and understanding of the strategies of the Stagecoach Company. Customer perspective in the BSC is to achieve absolute customer satisfaction so that it can realize its vision of being the public transport provider of choice. The company needs to improve the reliability on the provision of services by minimizing complaints which in turn increases the amount of revenue. The company is utilizing customer satisfaction as an essential element. In addition, this approach is ideal in measuring the both the financial and nonfinancial factors. Niven (2006) urgues that the customer perspective by this company is enhanced through the measures it has taken to provide amicable environment for the existence of its clients. The company aims at limiting the environmental impacts of its operations thus encouraging its clients that are environmentally conscious as well as ascertaining that it is true to the principles of corporate social responsibility (Makhijani & Creelman, 2011). On the other hand, Person, (2013) explains the second perspective as a financial approach. Earlier, business strategies were enacted based solely on the financial aspects without incorporating how these finances were generated. However, the balanced score card changed this approach by including the revenue, profit, and market share. The growth as a key performance indicator illustrates the company has been monitoring the trend of its passengers on how these passengers use their services. It acknowledges that an increase in the number of individuals using its services corresponds to the increase in the profitability that is likely to be realized (Kapferer & Bastien, 2012). On the other hand, the third perspective which is internal business process is used to get the internal operation of the company together. Transport damage cost, processing cost, and storage cost are highly minimized to optimize profit. All the performance indicators highlighted in this paper can be classified as the internal business facet process of the firm (Smith, 2013). Smith, (2013) points out that the final approach entails learning and innovation which elaborates or illuminates what the company should do to sustain growth and its profitability intended to be realized in future. The company is researching on how RFID can be implemented with the aim of improving the tracking of the logistics. Moreover, the company employs automated transshipping and ERP thus rendering this perspective null as the balanced scorecard does not measure performance. Each of the mentioned perspectives has its objectives. These objectives are linked in the strategic map to form common measures and strategies. The strategic map demonstrates the relationship between the measures of the balanced score card and the Stagecoach’s strategic objectives. Tonchia & Quagini (2010) argues that the development of employees enhances the satisfaction of the customer, satisfaction of employees, and quality production of products. They influence profitability of the Stagecoach Company which is one of its strategies. In addition, the company brand has loyal clients within it customer satisfaction approach. This helps in ensuring that the customers are satisfied which in turn increases the sales returns as well as the profitability of the firm as stipulated in the financial approach. However, Pham-Gia (2009) elaborates that it is prudent to understand that customer satisfaction in the above statement is within the internal business approach/perspective. Also the objective of satisfied employees is classified in the internal business approach and is ideal in meeting the customer’s expectation and needs within the customer perspective. It plays a crucial role in enhancing revenue and profit of the company thus helping in the survival of the business. Conclusion The performance indicators have been of vital importance in the sustainability, survival, and the daily operations of the Stagecoach group company. These indicators are: environmental, growth of the company, customer satisfaction, and safety of the passengers and the staff. However, this institution should incorporate other measures of performance in its strategies. The balanced scorecard has perspectives or approaches that are essential in the comprehension of the strategies of the company. These approaches are customer perspective, financial perspective, internal business perspective, and learning and innovation approach. References List: South West Train (2015). Environment. Retrieved on 23rd March 2015 from: http://www.southwesttrains.co.uk/environment.aspx#137359 PricewaterhouseCoopers LLP. (2011). Manual of accounting: Narrative reporting 2012. Haywards Heath: Bloomsbury Professional. Stagecoach Group (2012). Shaping the Future of Transport. Retrieved on 23rd March 2015 from: http://www.stagecoach.com/~/media/Files/S/Stagecoach-Group/Attachments/media/publication-financial-reports/ar2012.pdf Stagecoach Group (2015). Revolution in the Way We Travel. Retrieved on 23rd March 2015 from: https://www.eastmidlandstrains.co.uk/Global/banners/Stagecoach_Sustainability_Strategy.pdf Stagecoach Group (2015). Organic Growth. Retrieved on 23rd March 2015 from: http://www.stagecoach.com/~/media/Files/S/Stagecoach-Group/Attachments/our-performance/organic-growth-2014.pdf Stagecoach Group (2015). Service Delivery. Retrieved on 23rd March 2015 from: http://www.stagecoach.com/~/media/Files/S/Stagecoach-Group/Attachments/our-performance/service-delivery-2014.pdf Stagecoach Group (2015). Stagecoach Group carbon emissions and carbon intensity 2007-08. Retrieved on 23rd March 2015 from: http://www.stagecoach.com/~/media/Files/S/Stagecoach-Group/Attachments/our-performance/service-delivery-2014.pdf Mandri-Perrott, X. C., Menzies, I., World Bank., & Public-Private Infrastructure Advisory Facility. (2010). Private sector participation in light rail-light metro transit initiatives. Washington, DC: World Bank. UK Bus Awards (2013). Recognizing, Rewarding, and Inspiring.Retrieved on 23rd March 2015 from: http://ukbusawards.org.uk/content/index.php?option=com_content&view=article&id=805:scotland&catid=138&Itemid=509 Network Rail (2014). Performance: The number of trains that arrive on time has risen dramatically since we took over the running of Britains railway in October 2002. Retrieved on March 2015 from: http://www.networkrail.co.uk/about/performance/ Agility (2015). Stagecoach Metrolink Tailors sofsol Group’s agile CMMS for Transport. Retrieved on 23rd March from: http://www.getagility.com.au/wp-content/uploads/2011/08/Agility-Case-Study-Stagecoach.pdf Niven, P. R. (2006). Balanced scorecard step-by-step: Maximizing performance and maintaining results. Hoboken, N.J: Wiley. Person, R. (2013). Balanced scorecards & operational dashboards with Microsoft Excel. Indianapolis, IN?: Wiley. Kapferer, J.-N., & Bastien, V. (2012). The luxury strategy: Break the rules of marketing to build luxury brands. London: Kogan Page. Kaplan, R. S., & Norton, D. P. (2006). Alignment: Using the balanced scorecard to create corporate synergies. Makhijani, N., & Creelman, J. (2011). Creating a balanced scorecard for a financial services organization. Singapore: Wiley. Marr, B. (2012). Key performance indicators: The 75 measures every manager needs to know. Harlow, England: Pearson Education. Parmenter, D. (2012). Key performance indicators for government and nonprofit agencies: Implementing winning KPIs. Hoboken, N.J: John Wiley & Sons. Smith, R. F. (2013). Business process management and the balanced scorecard: Using processes as strategic drivers. Hoboken, N.J: Wiley. Tonchia, S., & Quagini, L. (2010). Performance measurement: Linking balanced scorecard to business intelligence. Berlin: Springer-Verlag. Pham-Gia, K. (2009). Balanced scorecard - solving all problems of traditional accounting systems? Munich : Grin Verlag, Norderstedt, Germany : Books on Demand GmbH Stagecoach Group (2015). Stagecoach Group Home. Retrieved on 23rd March 2015 from: http://www.stagecoach.com/about/contacts/corporate-contacts.aspx Read More