Key performance indicators (KPIs) are a tool for improving your business performance. When a business goal is critical, you will want to set targets and monitor the actual value achieved against those targets. Moreover, when performance is below par, you will need to instigate a series of corrective actions to reverse the trend. KPIs focus attention on the significant factors that influence the
success of your business.
In a BI system, all of this is wrapped up into a single concept: the KPI which ensures that goals are being met in an effective and efficient manner. Most people are familiar with financial KPIs whereby the profitability of the business is monitored against a set of targets. However, in the balanced scorecard approach popularised by Kaplan and Norton, KPIs cover all "perspectives" of the business including:
Furthermore KPIs can be grouped together into sets of inter-related numbers so that they roll-up (i.e. the top level KPI is only met if all the child KPIs are on-target). This provides a mechanism by which senior managers can drill down from a top level KPI to see the factors that are influencing poor business performance. Your KPIsAlthough some KPIs can be generic to an industry sector, most KPIs will be specific to your business as they monitor factors relevant to your operational success. Therefore getting the right set of KPIs is very important. By facilitating a series of workshops with your management team, we can identify the key factors that affect you business and design a set of coherent KPIs. Once in place, these KPIs will focus management attention on the key areas of importance, allowing you to improve your business success. |