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To gain the greatest competitive advantage, CXOs should
regularly access and "benchmark"
performance to validate internal improvement targets
and identify stellar performance by closely monitoring
metrics and KPIs. |
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Webopedia defines KPIs as:
"KPIs, or key performance indicators,
help organizations achieve organizational goals through the
definition and measurement of progress. The key indicators are
agreed upon by an organization and are indicators which can be
measured that will reflect success factors. The KPIs selected
must reflect the organization's goals, they must be key to an
organization's success, and they must be measurable. Key
performance indicators usually are long-term considerations
for an organization."
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A KPI is a key part of a measurable
objective, which is made up of a direction, KPI, benchmark,
target and timeframe.
By defining a set of values to assess
the business status quo and prescribe next courses of action,
KPIs help an organization to measure progress towards
organizational goals. Different businesses measure KPIs
differently depending on the nature of the organization.
For example, a school might consider the graduation rate
of its students as a Key Performance Indicator which might
help the school understand its position in the educational
community, whereas a business might consider the percentage
of income from return customers as a potential KPI.
KPIs can be summarized into the
following sub-categories:
- Quantitative indicators which can be presented as a number
- Practical indicators that interface with existing company processes
- Directional indicators specifying whether an organization is getting better or not
- Actionable indicators are sufficiently in an organization's control to effect change
The KPI scorecard is simply a report card that
represents how far the organization's critical metrics is above or
below a pre-determined target. The scorecard is designed to instantly
provide a summary view of multiple key performance indicators, allowing
business users to know if they are on or off their plan.
Combining KPIs, its description, owners,
actual scores against targets, industry benchmarks, interactive
commentaries and associated initiatives, KPI scorecard helps to
establish reliable reporting for monitoring. Managers are able
to define performance thresholds which provide a more precise
gauge of performance status. These thresholds are defined by
ranges and will eventually be mapped to a wide array of easy to
understand scoring system such as traffic light (red, green,
yellow) or gladiator (thumbs up, down), increasing understanding
and improving adoption.
By adopting Cetheus' RPM KPI Scorecard,
management has access to performance monitoring that is absolutely
critical to the effective performance of the organization at its
fingertips.
Cetheus'
RPM
KPI scorecard comprises KPI
scorecard essential elements. Its sophisticated KPI Scorecard
provides more options and flexibility in KPI definition. The
complete enterprise KPI scorecard is disseminated across enterprise
wide, providing the necessitating automation of performance
measurement which in turn delivers more accurate and meaningful
performance information. The automation of enterprise KPI
Scorecard encourages faster, better decision making, greater
agility in the business planning process, tighter strategy
execution, and greater corporate transparency and
accountability.
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