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I-19 analyzed, and displayed. The organizational functions that performance measures, are consistent with policy objec- produce these requirements are called data management sys- tives and targets. tems. There are two key dimensions to creating and sustain- Development and application of maintenance quality assur- ing these systems. The two areas are equally important and ance programs, which entail explicit maintenance levels of must be synchronized within an organization to ensure the service that, like performance measures, can serve as both generation and use of accurate, timely, and appropriate data. indicators of the current condition/performance of main- The first area centers on the technical challenges associated tained features in the transportation system and expressions with data systems, including development and maintenance of target values for improvement. Several DOTs have of hardware and software, and the specifications for data col- successfully moved concept into practice by incorporat- lection, analysis, archiving, and reporting. The second area ing maintenance levels of service within performance-based focuses on the institutional issues associated with data stew- budgeting tools for their maintenance programs. ardship and data governance. A renewed focus on analytic tools and other information technology resources that are needed for performance- based management. Data collection and processing, making 2.1 Current Practice needed information accessible to all organizational levels Among State DOTs across the agency, implementing useful management sys- Within transportation the application of performance mea- tems and other analytic tools, and aligning systems and data sures has an especially long history. These historical roots are with an agency's business processes are critical to effective likely due in part to the fact that transportation programs deal decision support for policy-making, planning, and resource with engineered facilities and ongoing operational services allocation. Cost-effective data collection procedures and that have been supported by well-established funding mecha- technology, updated organizational responsibilities for nisms, a strong research culture, and extensive statistical managing shared data, taking the best advantage of the sub- reporting. What has changed today, however, is the context stantial investment in legacy systems while providing new in which performance monitoring and reporting are con- capabilities where needed, and ensuring the quality and ducted, and to what purposes. There is a much stronger accessibility of data to a diverse set of agency and stakeholder emphasis today on the need to demonstrate responsiveness users are some of the key challenges that are now being dealt to customer needs, accountability for program expenditures, with by DOTs in this area. and provision of satisfactory levels of service or results. Well- An increased focus on the development of a risk manage- executed performance-based management and reporting helps ment plan as part of a performance measure program. While an agency to maintain credibility with executive and legisla- there was some consideration of the need for a formal risk tive bodies in justifying requested budgets and demonstrating management plan before the Minnesota bridge event, assess- wise use of public funds. ing risk across the enterprise has become a higher priority.1 This current study is at the focal point of the following emerging trends in U.S. transportation industry practice: Ways in which agencies have responded to these trends using performance-based management are summarized in a recent Increased use of performance measurement in policy, plan- report by AASHTO's Performance-Based Highway Program ning, and programming. DOTs and other transportation Task Force titled A Primer on Performance-Based Highway Pro- agencies are learning how to apply performance measures gram Management: Examples from Select States.2 The report pro- to their resource allocation decisions and to understand the files the experiences of DOTs in 11 states: California, Florida, elements and best practices needed to implement per- Maryland, Michigan, Minnesota, Missouri, Montana, New formance measures successfully as part of their day-to-day York, Ohio, Virginia, and Washington. Agencies' functions are management. Nonetheless, while applying performance described in one or more of the following management areas: measures is conceptually straightforward, there are many details. The simplicity of the performance measurement idea Policy development and long-term planning; belies the challenges and the levels of effort and commitment Programming and budgeting; that are actually involved in putting the idea into practice. Formalization of asset management concepts and principles 1Eighth National Conference on Transportation Asset Management (http:// drives agencies towards a policy-driven, performance-based pressamp.trb.org/conferences/programs/program.asp?event=486). approach to resource allocation and utilization, explicit con- 2A Primer on Performance-Based Highway Program Management: Examples from sideration of alternative solutions, analyses of tradeoffs in Select States. American Association of State Highway and Transportation Officials, Washington, D.C., January 2008. Accessed March 13, 2008. http://www. terms of cost versus performance, and project and program transportation.org/sites/quality/docs/PeformanceBasedHighwayProgram_Jan evaluation methods and criteria that, through the use of 2008.pdf.

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I-20 Program, project, and service delivery; to-bottom consistency of performance measurement con- System operations; and cepts, tools, and measures throughout several key functions: Monitoring and reporting results. e.g., policy formulation, data collection/analysis, long- range and short-term planning, programming/budgeting/ The ways in which performance measures are engaged by resource allocation, program/project delivery, and system these functions involves the following elements of comprehen- monitoring/feedback. Horizontal integration implies consis- sive performance management: tency in performance measurement across agency divisions and business units. Vertical integration implies consistency To select appropriate measures to gauge agency perfor- in performance measurement (though at different levels mance in critical program and service areas; of detail) among levels of management. Several agencies To track and report actual results and, where appropriate, described this approach as holistic. to compare to stated objectives, targets, or benchmarks; The application of performance measurement in a system- To analyze results to identify key factors influencing per- atic, documented way. Performance measurement is embod- formance and opportunities for improvement; ied in a number of documents that represent a progression To allocate resources and operate transportation systems of thinking. Each document marks the successful completion to drive better results; and of findings for a particular function and provides guidance To continue to monitor and report progress. for the subsequent function. Long-term plans, short-term components, work programs, STIP documents, approved The AASHTO Primer also notes that performance measure- budgets with project lists, and performance monitoring/ ment is not a silver bullet and does have inherent limitations. tracking reports are examples of a systematic approach that For example, not all aspects of transportation system perfor- enforces the consistent, integrated processes of the previous mance are under the control of an owning/operating agency. bullet. Performance data may signal a change in some aspect of trans- Strong executive/managerial support and involvement in portation system condition or operation but do not necessar- performance reviews and decisions on reallocating resources, ily indicate the cause of that change. Some important aspects in central and district offices, as well as among program of performance are not easily measured. Even where perfor- and key business unit managers. mance outcomes can be measured, that information may be Recognition that performance measurement can involve a only a part of what decision-makers need in their deliberations. Nonetheless, the value of performance measurement as part of culture change within the agency, with steps taken to focus the total package of information available to an agency has on the positive aspects of this change while mitigating the been well validated in the experiences of several of the DOTs potentially negative aspects. Transparency of performance results and their implications that have been described in the AASHTO Primer. Profiles of each of the 11 state DOTs are presented in the for transportation customers and stakeholders, as well as AASHTO Primer in this context. The AASHTO Primer observes the owning/operating agency. State DOTs take different that the 11 DOT profiles demonstrate the following benefits of approaches to this need--e.g., some favor devices such as comprehensive performance-based management: dashboards, report cards, or score cards, while others pre- fer a more narrative or descriptive communication. All of More efficient allocation of increasingly scarce resources; these approaches appear to be successful in the context in Development and justification of budget and project pro- which they are used. The important point is the recogni- posals; and tion that technical data that characterize transportation Accountability to road users and the general public for deci- network conditions, operations, work needs, services, and sions in funding, constructing, maintaining, and operating programs need to be translated into a form that different the highway system. audiences understand and can respond to. Several agencies look at organizational performance, as well Given the objectives and perspectives of this study, these as transportation system performance, and a subset of these DOTs that appear to have gone the furthest in applying links the two concepts: i.e., transportation system perfor- performance-based thinking to investment decisions, pro- mance influences the performance evaluation of agency gramming, and resource allocation illustrate several elements business units and employees. This concept has existed for of best practice: some time in the private sector but now is being considered by public sector DOTs. The application of performance measures throughout the agency that are integrated vertically, horizontally, and NCHRP Project 20-60 considered performance measures among processes. Process-related integration implies top- and targets in the context of asset management within state

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I-21 DOTs.3 Asset management is by definition a policy-driven, Support investment decision-making in resource alloca- performance-based process that stresses, among other attri- tion, performance-driven investment decisions, formalized butes, the use of quality data and analytic tools, including performance-based budgeting, and strengthened internal predictive models. Management principles, methods, and program management. decision criteria that are rooted in asset management thus per- Provide the basis for quantification of program benefits mit a long-term view of options and their consequences, in and other impacts as part of investment decision-making, addition to programming and budgeting in the medium- and analysis of tradeoffs, and communication to stakeholders near-term. Performance measures and targets are critical to in support of program investments. asset management applications in policy formulation, public Demonstrate accountability and responsiveness to stake- outreach, planning, programming, budgeting, resource allo- holders, ensuring "wise use of tax dollars." cation, program and service delivery, operations and mainte- Assess the status of a program, evaluating its cost- and nance, transportation system monitoring, and assessment of performance-effectiveness. needed updates in policies and priorities. NCHRP Report 551 Meet or respond to Federal and state legislative mandates tabulates examples of performance measures in use by state and reporting requirements. DOTs and summarizes previous work on performance mea- Guide improvement of delivery of services, focusing on surement, as well as prescribing a method for target-setting. desirable outcomes and alternative methods of delivering Ultimately, performance measures are used for many pur- these results. poses in state DOT, including the following: Engage an agency within a comprehensive, statewide per- formance initiative aimed at broad-based improvement in Provide a foundation for policy formulation and systemwide government delivery of services and accountability. planning. Improve communication within the agency itself as well as Issue a report card: "How are we doing?" with transportation system users, political leaders, other Track progress towards public and explicitly stated policy stakeholders, and the public at large. goals and agency priorities. 3 While many DOTs and their state governments apply one Cambridge Systematics, Inc., PB Consult, Inc., and Texas Transportation Insti- tute. NCHRP Report 551: Performance Measures and Targets for Transportation or more of these aspects of performance-based management, Asset Management. TRB, National Research Council, Washington, D.C., 2006. only some apply PBRA specifically, including target-setting.