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| Excerpt from: Value Network Analysis
| | | July 22, 2009 | | Indicators and Metrics for Monitoring and Predicting Performance |
One of the most powerful benefits of value network modeling is the ability to monitor, predict and influence performance. Metrics are made simple with the Comprehensive Reports function in the ValueNetwork.com application. In addition to Animations and Detailed Visuals, indicator reports are generated for the Standard Value Network (Role view) and the Collaborative Value Network (Participant view). The text and charts below are drawn from a Standard Value Network (Role-based) Report, using the example of scheduling procedures in a health care organization. For other blogs in this series see the links at the end or simply search "Indicators and Metrics."
Resilience
Resilience in a value network is critical for the network to respond to changing conditions. Resilience requires the right balance of formal structure to informal knowledge sharing. Therefore, the Ratio of Tangible/Intangible Transactions is helpful as an indicator of the Resilience of the network. The first two charts below are basic indicators for the number and percentage of Tangible and Intangible Transactions. The text below that shows the Ratio of Tangible/Intangible Transactions.
More intangible than tangible:
Where tasks or relationships are complex there are usually more intangible than tangible transactions. More knowledge exchanges are a requirement where there is a lot of variation and options in how things might be done. If the percentage of intangible transactions is higher than tangible transactions it usually indicates a high level of flexibility, collaboration, and trust. If the ratio is too heavy on the intangibles side, however, it might show that there are “work-arounds” where the formal processes are not working as they should. It could also show that the network is largely social in nature and does not have strong financial or formal relationships. This ratio varies with different cultures. It differs between industries and even between departments in an organization.
More tangible than intangible:
A high percentage of tangible exchanges shows that there is a lot of formal structure to the interactions. This might demonstrate a high level of transparency if processes are visible on shared systems. On the other hand few informal interactions could indicate a low level of trust and information sharing. Highly structured interactions typically indicate a low level of flexibility. In process-focused operational networks a higher level of tangible transactions than intangible is normal. This is especially true where business processes have been heavily systematized and follow well established routines. | Topic Tags: intangible transactions, ratio, resilience, tangible transactions, value network performance | |
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