Key Performance Indicators

Description

• A comprehensive set of performance indicators selected to gauge the success of the BPI project in achieving or contributing to the (Confirmed) Business Vision. They are used to express the performance gap between the current (“As-is”) status and the future (“To-be”) status of the selected Critical Success Factors.

Client Value

• Performance improvement objec­tives provide a basis for tracking, measuring and managing progress toward Critical Success Factors and represent the basis for developing design goals (Stretch Targets).
• They also provide the basis for selecting the correct processes for the BPI project—those whose improvement will have significant impact on the Critical Success Factors.

Approach

• Conduct interviews or workshops with selected senior managers to establish performance indicators for each Critical Success Factor.
• Develop two to four performance indicators for each of the Critical Success Factors (drawing, as appropriate, upon the Critical Success Factors specification summary).  Sound performance improvement measures/indicators are quantifiable, are taken from the perspective of the “end-customer” and are directly linked to Critical Success Factors. In some cases, a Key Performance Indicator can relate to several business processes.

Guidelines

Tactics/Helpful Hints

• No more than two to four performance indicators should be assigned for each of the Critical Success Factors .  The task in this early project stage is to assess the current performance relative to the Critical Success Factors, not to build a new management information system. Existing management information is usually insufficient for this purpose and sometimes often fails to measure client-oriented Critical Success Factors (e.g. the length of time between new product releases).  It may therefore be necessary to introduce to the organisation new ways of measuring performance.
• If the Balanced Business Scorecard technique is being employed from the outset, it should be introduced to the organisation early on, to allow sufficient time to reorient current performance management systems that may be changing significantly at later stages of the BPI project.