Strategy Evaluation 123

Strategy evaluation and control
9222 Mahesh Ghuge

9225 Hemant Gurav
9233 Sameer Mahajan
9238 Amit Mundhe
9270 Nitin Tandure
Introduction
• Definition
“strategic evaluation and control can be defined as the process
of determining the effectiveness of given strategy in achieving
the organizational objectives and taking corrective measures
whenever required.”
• Strategic evaluation operates at two levels
 strategic level
 operational level
Jobless Insurance Industry: Process View
•Product •Direct sales

•Portfolio
Planning and
analysis
•Business promotion •Claims
•Voice support •Agency
Analysis and • Marketing Registering
to agents and Management
Technical design activities •Claims
policyholders •Field
• Policy Pricing •Outbound/inb evaluation,
•Payroll Underwriting
• Policy ound telesales examination
Processing •Reinsurance
Wording • Advertising and litigation
•Investment
• Policy related Support
Functions
forms activities such
Designing as agent
compensation,
performance
tracking of
agents and
sales force,
training etc
Categorization of Processes
Management Control System
• Expense Centers and Cost Centers
- Product Planning
- Promotional Activities
- Business analysis and Technical Design
- Voice Support to agents and Policyholders
- Payroll Processing
- Claims Processing
- Administrative Activities
• Revenue Centers
- Investment Division
- Sales Division
- Field Underwriting
- Portfolio Management
PERFORMANCE CONTROLE PROCESS
OTHER PARAMETERS
Employee and agents Training
• Number of employees and agents trained

• Number of employees trained in advanced accounting
methods and modern software
• Number of employees trained in market research and
analysis
• Number of employees trained for branch and division
management
• Actuaries and assessors training and development
OTHER PARAMETERS cntd…
Research and Development
• Changes in the business and Individual risks

• Analysis of market
• Statistical research on various issues affecting the
socio-economic system
• Competitors’ strategies
• Regulatory influences
• New Policies for Growing industries
OTHER PARAMETERS cntd…
• Operational Efficiencies
• Speed in processing –proposal forms

• Average time taken in -settling claims
• Number of dropouts
• Number of reintegration cases
• Number of new branches established per year
• Cost efficiency in reinsurance
• Number of repudiation cases in court
• Number of cases challenged in court and failed
BALANCED SCORECARD
•Total revenue
•Profit rate
•ROI
•% cost reduction
FINANCIAL
•Customer satisfaction rate
•% cross selling
•New customer acquisition
rate
•Customer retention rate
CUSTOMER
LEARNING
AND
GROWTH •Implementation rate of
plans
•Mean time to re-
skilling per employee
•Investment rate in IT
systems
INTERNAL
BUSINESS
PROCESS
•Service error rate
•Number of new
products
•Response rate
•Customer
complaints rate
FINANCIAL PERSPECTIVE
STRATEGIC OBJECTIVES PERFORMANCE
MEASURES
Improve return to shareholders Economic earnings, ROE
Improve growth of business Revenue growth, market

shares
Improve operating efficiency Operating costs/Revenue,

operational yield
RISK MANAGEMENT PERSPECTIVE
MEASURES
Periodic Control and Risk Self Progress report, Risk reduction
Assessment rate
Reduce transaction risk Number of execution errors
Monitor aggregate risks Value at risk (VAR)
Balance risk and performance Risk adjusted performance

measure (RAPM)
CUSTOMER PERSPECTIVE
MEASURES
Improve market share Percent of market, Growth in
revenues
Maximize customer satisfaction Number of complaints/Total
orders
Obtain new clients Number of new clients, Rate of

new products
Introduction
Retain clients Number of repeat orders,

Retention rate
INTERNAL PROCESS PERSPECTIVE
MEASURES
Best execution Time to execution
Efficient execution Cost per transaction, # of

orders executed outside
accepted parameters
Provide optimal mix of Revenue per product vs budget
products
Appropriate information No. of processing errors,

processing Downtime
LEARNING & INNO. PERSPECTIVE
MEASURES
Retain key employees Employee turnover, # of vacant
positions
Increase employee satisfaction Employee satisfaction index
Increase employee skills Competency grid, Hours of

training
Implement new information Project status vs plan, rate of
systems system change

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Strategy evaluation and control

9222 Mahesh Ghuge

•Product •Direct sales

• Number of employees and agents trained

• Changes in the business and Individual risks

• Speed in processing –proposal forms

Improve growth of business Revenue growth, market

Improve operating efficiency Operating costs/Revenue,

Reduce transaction risk Number of execution errors

Monitor aggregate risks Value at risk (VAR)

Balance risk and performance Risk adjusted performance

Obtain new clients Number of new clients, Rate of

Retain clients Number of repeat orders,

Efficient execution Cost per transaction, # of

Appropriate information No. of processing errors,

Increase employee skills Competency grid, Hours of

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