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Performance Measures Critical for Business

Performance measures are the backbone of any asset management framework in both public agencies and private businesses. Performance measures are a critical business tool used to report successes and opportunities for improvement to customers, shareholders and employees. They are also used to evaluate the state of assets and to develop future business plans.

A set of performance measures is being developed within the Asset Management Business Framework (AMBF) project. This will allow MTO to report on the following:

* Core business goals and outcomes/results

* Multi-year targets

* Annual commitments and achievements

A corporate goal will drive the need for a technical measure. For example, a corporate goal is to ensure that our assets are in a good state of repair. To establish this, a corporate performance measure is defined as percent of highways in good condition. In order to gauge the performance of an asset, a technical measure is used, in this case the Pavement Condition Index (PCI). The PCI is a value between 0 and 100, which defines the condition of pavement based on the roughness of the ride and the amount and severity of distresses (e.g., cracking) on the pavement. A threshold is a level of the measure that defines the state of the asset; these levels can generally be interpreted as good, fair or poor. Finally, corporate goals can be quantified to state what target must be met. The AMBF team is currently considering performance measures under the following categories:

* Asset Preservation This will include the percent of highways or bridges in good condition, remaining life of an asset, and asset value.

* Cost Efficiency and Control This area will measure how well the ministry controls its budgets.

* Customer Satisfaction This measure is becoming popular with various transportation agencies and includes surveys of the travelling public.

* Economic Development Although it is known that good highways and transportation systems contribute to the economic competitiveness of the province/community, it is difficult to measure the amount that is attributable to a new/improved highway versus other economic factors such as interest rates.

Measures such as trucking-costs/tonne-km are also a measure of how well highways contribute to the economy.

* Institutional Effectiveness This is a measure of how well assets are managed over the long term. Considerations include: what is the cost of doing work now versus delaying the work, and what benefits, in terms of road user costs, are obtained from improvements made to a roadway?

This measure also involves consideration of the Infrastructure Debt Index (see Road Talk, February 2004).

* Modal Integration These measures will include a percentage increase in transit ridership and reduced travel time. Modal integration is also a function of social trends, lifestyle and employment patterns.

*Operational Efficiency and Reliability This measure is crucial, as it allows the ministry to determine where work is required to decrease roadway congestion. Travel time reliability is an example of this type of measure.

This measure is important to both drivers and industries that move goods along the highway. It does not necessarily mean that a driver can travel faster through congested areas; rather, it is aimed at providing a more accurate idea of congestion conditions (e.g. a driver knows that it will take an hour plus or minus 10 minutes, not an hour plus or minus 45 minutes, to travel a certain route).

*Safety Various measures are being reviewed, including the potential for accidents and the number and severity of accidents.

The development of a performance measure must satisfy certain conditions: the measure must be assessed simply and consistently, the performance must be under the ministry's control, and it must be easily understood by the audience.


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