Author: Amit Mehendale, Head Delivery, MAIA Intelligence.

With reference to my earlier post Key Performance Indicators KPI - A puzzle solved, few of the readers asked me to throw some more light on how KPIs could be related to KRAs (Key Result Areas) of the management thereby enabling KPIs to be a more precise snapshot of the organization.

In this article I shall highlight some of the key points as to how the KPI can be used in context with business functions.

KPI Definition & Attribute Template

Name of the KPI :

KPIDescription
KPI Objective
KPI Benefits
KPI StartDate
KPI End Date
KPI Life Span & Reporting Periodicity
KPI Unit of Measure & Formula
KPI Target Value
KPI Upper & Lower Tolerances and Anticipate Upper and Lower Limits
KPI Sponsor
KPI Initiator
KPI Benefactor
KPI Internal or Customer Facing
KPI Link to any TQM
KPI Data Sources
KPI Risks in Working Conditions
Status of KPI Either Parent or Child with detail of relationship
KPI Relationship and Links	KPI can be related to: 1. Enterprise wide 2. Objectives 3. Resources 4. Processes 5. External Agencies 6. KPI
Remarks

Using KPI requires KPI definitions and attributes to set up their implementation using the above templates. For KPI implementation, there will be a number of stages that need to be addressed. The following outlines those stages. In practice, it will be necessary to undertake a scoping exercise to ensure that all items necessary are taken into consideration. The size and cost of this exercise will depend on the nature of the requirement. The scoping exercise will outline the areas under consideration. The following items will need to be addressed, either at the scoping or in the KPI set up phase:

• Identify and enumerate all KPIs

• For each KPI, establish what is to be achieved by the use of this KPI

• For each KPI, define the method of measurement

• For each KPI, define what data will be used to measure and where that data is

• For each KPI, define the algorithm that converts data to KPI

• For each KPI, define the normalization or criteria

• For each KPI, identify the organisational units to which the KPI applies

• For each KPI, define the organisational reporting hierarchy

• For each KPI, define the reporting requirements (table output, graphical output etc)

• From the KPIs, identify and enumerate all data sources

• For each data source establish how “live” the data is and define its input

• For each data source establish the connection mechanism to its KPI object

• As appropriate set up a data connection mechanism for the data source

• Define an appropriate security model that will allow appropriate personnel access to appropriate data

The user interface will need defining and implementing, but this is like putting the bodywork on a car. How it looks is important, but what the engine and unseen parts do is what makes the difference between a performance car and a runabout.

Key performance indicators (KPI) are high-level snapshots of a business or organization based on specific predefined measures. KPIs typically consist of any combination of reports, spreadsheets, or charts.

They may include global or regional sales figures and trends over time, personnel stats and trends, real-time supply chain information, or anything else that is deemed critical to a corporation’s success.

Without measurable quantities, successful management is hardly possible. They allow goals to be observed, met and perhaps exceeded. Relatively generally formulated goal descriptions are made more concrete through the use of measurable quantities. The measurable quantities can then be allocated to the strategic goals in the perspectives and organisational units. The editor allows further clarifications to be made, for example by adding a comprehensive definition of the measurable quantities, complex mathematical formulae (if necessary), specification of units, etc. This is also where the warning limits for each quantity, which determine at what values the different warning colors will be switched on, are defined, giving the user a quick view of how well or how poorly each goal is being met.

1KEY KPI, or key performance indicators, are used by companies to better evaluate their current level of business success and to help plan for the future. KPI add value to aspects of business operation that are difficult to quantify, like employee satisfaction or development, and are a critical piece of long-term business intelligence strategy. When establishing KPI it is important to identify metrics that are achievable. It’s also essential that companies measure and analyze these metrics using intelligent software. Sophisticated technology provides the framework for executing multi-level analysis about profitability, process, and other metrics that impact performance; and for companies looking to find the leading state-of-the-art solution, 1KEY KPI is the answer.

Take for example if the user wants KPI trend for Ageing Analysis which in turn will give better cash flow by controlling the credit period. I have filled the above template with the relevant attribute against each KPI definition. Likewise you can use this template for any business function that you might want to measure.

1KEY integrates KPI within its BI Suite. MAIA Intelligence has been providing innovative performance management & BI tools for companies across the verticals. 1KEY BI supports seamless linking of score-carding, reporting analysis thereby helps reveal big picture connections. Whatever the business focus is, 1KEY supports critical indicators with superior KPI models & templates.

Measure KPI with confidence: To achieve maximum financial success, companies must examine questions like: “What is our customer demographic?”, “How fast are we turning merchandise?”, and “What’s the rate of customer satisfaction?”. As part of the 1KEY Agile BI solution, Sales and Customer KPI modules deliver a configurable and easy-to-use framework to answer these questions. Organizations can perform in-depth margin analysis on customers and products, and view trends and key metrics. In addition, pre-built KPI tools manage campaigns. But this is just one slice of a powerful integrated program. Within 1KEY BI, users can link performance indicators to analysis software, creating endless possibilities for diagnostic reporting.

Manage large data sets using drag-and-drop method. Easily explore data threads and sort by different criteria. Produce high-impact reports fast.

In 1KEY KPI, user can set multiple conditions for multiple trends & measure multiple KPIs at a time based on Sales, HR, Product, Suppliers, etc.

• Multiple KPI trends under single KPI group
• Common & independent parameter
• Filtering / Paging / Sorting
• Top / bottom values
• Multiple Aggregate Summaries
• Drill down KPI to next level data

Posted on February 25th, 2008 by Amit Mehendale
Filed under: Business Intelligence, View Points & Perspective

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