The KPIs differ depending on the nature of the organization and the organization's strategy. They help an organization to measure progress towards their organizational goals, especially toward difficult to quantify knowledge-based processes.
A KPI is a key part of a measurable objective, which is made up of a direction, KPI, benchmark, target and time frame. For example: "Increase Average Revenue per Customer from £10 to £15 by EOY 2008". In this case, 'Average Revenue Per Customer' is the KPI.
KPIs should not be confused with a Critical Success Factor. For the example above, a critical success factor would be something that needs to be in place to achieve that objective; for example, a product launch.
But it is necessary for an organization to at least identify its KPI's. The key environments for identifying KPI's are:
When identifying KPI's the acronym SMART is often applied. KPI's need to be:
Many of these aforementioned customer KPIs are developed and improved with customer relationship management (CRM).
This is more an inclusive list than an exclusive one. The above more or less describe what a bank would do, but could also refer to a telephone company or similar service sector company.
Faster availability of data is beginning to become a concern for more and more organizations. Delays of a month or two were commonplace. Of late, several banks have tried to move to availability of data at shorter intervals and less delays. For example, in businesses which have higher operational/credit risk loading (that involve credit cards, wealth management), Citibank has moved onto a weekly availability of KPI related data or sometimes a daily analysis of numbers. This means that data is usually available within 24 hours as a result of automation and the use of IT.
Any business, regardless of size, can better manage supplier performance with the help of KPIs robust capabilities, which include:
Suppliers can implement KPIs to gain an advantage over the competition. Suppliers have instant access to a user-friendly portal for submitting standardized cost savings templates. Suppliers and their customers exchange vital supply chain performance data while gaining visibility to the exact status of cost improvement projects and cost savings documentation (CSD).
Key Performance Indicators in practical terms and strategy development means are objectives to be targeted that will add the value to the business most (most = KEY INDICATORS OF SUCCESS).
In practice, organizations and businesses looking for Key Performance Indicators discover that it is too expensive, difficult or impossible (eg staff morale may be impossible to qualify with a number) to measure the performance indicators exactly required to a particular business or process objective. Often a business metrics with history that is similar is used to measure that KPI. In practice this tends to work but the analyst must be aware of the limitation of what is being measured which is often a rough guide rather than an exact measurement.
Another serious issue in practice is that once a KPI is created, it becomes difficult to change them as your yearly comparisons with previous years can be lost.
Furthermore you should be aware that if it is too inhouse, it may be extremely difficult for an organization to use its KPIs to get comparisons with other similar organizations.
Wipo Publishes Patent of Zte, Rui Liu, Baojun Jiao and XI He for "Method, Device and System for Displaying Key Performance Indicator" (Chinese Inventors)
Apr 26, 2013; GENEVA, April 26 -- Publication No. WO/2013/056576 was published on April 25.Title of the invention: "METHOD, DEVICE, AND SYSTEM...
Wipo Publishes Patent of Datang Mobile Communications Equipment, Cao Yanxia, Xu Hongyan, Kang Shaoli for "Method and Device for Obtaining Key Performance Indicator" (Chinese Inventors)
Aug 23, 2012; GENEVA, Aug. 23 -- Publication No. WO/2012/107002 was published on Aug. 16. Title of the invention: "METHOD AND DEVICE FOR...
Wipo Publishes Patent of Bernhard Wegmann, Ingo Viering, Ahmad Awada and Nokia Siemens Networks for "Mobility Robustness Optimization with an Extended Key Performance Indicator Message" (German Inventors)
Feb 20, 2013; GENEVA, Feb. 20 -- Publication No. WO/2013/020584 was published on Feb. 14.Title of the invention: "MOBILITY ROBUSTNESS...
US Patent Issued to SAP on March 20 for "Derived and Automated Key Performance Indicator Reports" (German Inventor)
Mar 27, 2012; ALEXANDRIA, Va., March 23 -- United States Patent no. 8,140,383, issued on March 20, was assigned to SAP AG (Walldorf, Germany)....