KPI - Top 20 KPIs Extended Edition 2016

TOP 20 KPIS 2016 EXTENDED EDITION

% Brand awareness $ Customer acquisition cost % On-time delivery # Inventory to sales ratio (ISR) % Slow moving stock % All commodity volume (AVC) distribution # Earned man-hours % Cannibalization rate of new product offering % Employee utilization rate $ Telecom subscriber acquisition cost # Units per man hour % Employee turnover % Customer retention % Net promoter score # Time to fill a vacant position % Realization rate # Employee engagement index % Production schedule attainment % Call setup success rate (CSSR) % Hospital bed occupancy rate

Publication date: March 2016 ID number: sK0168001

TOP 20 KPIS 2016 EXTENDED EDITION

% Brand awareness $ Customer acquisition cost % On-time delivery # Inventory to sales ratio (ISR) % Slow moving stock % All commodity volume (AVC) distribution # Earned man-hours % Cannibalization rate of new product offering % Employee utilization rate $ Telecom subscriber acquisition cost # Units per man hour % Employee turnover % Customer retention % Net promoter score # Time to fill a vacant position % Realization rate # Employee engagement index % Production schedule attainment % Call setup success rate (CSSR) % Hospital bed occupancy rate

Publication date: March 2016 ID number: sK0168001

INDEMNITY STATEMENT © 2016 The KPI Institute Ltd. All Rights Reserved. ID number: sK0168001 ISBN-13: 978-1530815319 ISBN-10: 1530815312 This report is the result of primary research conducted by the KPI Institute. It is available in PDF format on the smartKPIs. com website. Terms of use available at: http://www.smartkpis.com/terms-of-use.html (‘Premium content terms’). An appropriate citation for this report is: The KPI Institute (2016), Top 20 KPIs – 2016 Extended Edition, Melbourne, Australia Indemnity statement The KPI Institute has taken due care in preparing the analysis contained in this report. However, noting that some of the data used for the analysis has been provided by third parties, The KPI Institute gives no warranty to the accuracy, reliability, fitness for purpose, or otherwise of the information. The KPI Institute shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice. For the latest version of the documentation, smartKPIs Premium should be consulted. Editorial Coordination: Aurel Brudan Editorial Team: Cristina Tărâță, Marcela Presecan Research Team: Cătălin Stoia, Tudor Modruz Published by: The KPI Institute Life.lab Building 198 Harbour Esplanade, Suite 606 Melbourne Docklands, VIC 3008, Australia Telephone (international): +61 3 9028 2223 E-mail: [email protected] www.kpiinstitute.org | smartKPIs.com Page 2

www.kpiinstitute.org

FOREWORD There is a rumor going around about a Fourth Industrial Revolution. A historical synopsis of what has been, shows us that we have successfully transcended the mechanical use of equipment, mass production, electronics, IT and automation to finally enter our next stage of evolution: self-adaptive systems and cyber-physicality. Everything human related has come to a transformation, and that cannot be exclusive of the performance management discipline. The fact of the matter is, that it is becoming of performance management practices today, to have a visionary effect on all that concerns the lucrative corporations of tomorrow. As of recent years, performance management disciples have rendered practices of monitoring past performance obsolete, they have praised the emergence of leading KPIs to push forward all that’s lagging in the performance of our companies, they have condemned organizations for searching performance in financials only, and they have preached the use of performance management tools that oozed Business Intelligence. Perhaps, the time had come for them to fully take on the role of performance management enthusiasts and fully commit to their progressive ways. And so they did. People are talking about seismic changes in the corporate world. They speak of matters never heard before. They speak of the downfall of corporate ladders, they speak of the fragmentation of skill, they speak of connectivity and specialization that dominates the world. They talk Top 20 KPIs - 2016 Edition

of performance no longer driven by competition, but by relentless new talent building on innovation and faced -paced learning. In this new world of unchartered communication possibilities and unimaginable velocity, there will be a paramount need to fill in the current gaps in management, HR, strategy and performance capabilities. The bind between performance and compensation is unfastened, while companies like Adobe, GAP and General Electric have already relinquished annual performance reviews from their repertoire. The performance management of tomorrow will live to see a world where success gets to be built on talent, on human resources strategies that revolve around cultivating and harvesting employee strengths. There will be a need for sophisticated tools that perform real-time, pulse-snatching monitoring, measurement and assessment. Metrics and data will have to be more precise and accurate than ever. Measurement will provide HR with the data to perform people analytics, it will take the heartbeat of all operational systems and processes, it will even intrude on our personal living habits to report on our health for future performances in the office. Hardly believable, but true. Empowered by technology, measurement will sprout out data faster and more efficiently than ever. Because measurement will stand at the bottom of all things and data will be the addiction of the new world.

Page 3

TABLE OF CONTENTS Section I

6

How to Use This Report

6

Report Structure

7

Report Highlights

8

Section II

10

About The KPI Institute

10

smartKPIs.com Community Profile

12

2016 smartKPIs.com Functional Areas Taxonomy

14

2016 smartKPIs.com Industries Taxonomy

15

Section III

16

KPI…Naturally

16

About Key Performance Indicators (KPIs)

18

Advice on KPI Selection

20

KPI Documentation Guidelines

22

Target Setting: From Theory to Practice

24

Data Gathering Dimensions

26

Enhancing Performance Data Through Visualization

28

Data Analysis

30

KPI Reporting

32

Section IV

34

Top 20 Countdown Analysis

34

KPI Documentation Form Template

38

% Hospital bed occupancy rate

42

% Production schedule attainment

44

% Call setup success rate (CSSR)

46

# Employee engagement index

48

% Realization rate

50

# Time to fill a vacant position

52

% Employee turnover

54

% Net promoter score

56

% Customer retention

58

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# Units per man-hour

60

% Brand awareness

62

$ Customer acquisition cost

64

% On-time delivery

66

# Inventory to sales ratio (ISR)

68

% Slow moving stock

70

% All commodity volume (ACV) distribution

72

# Earned man-hours

74

% Product cannibalization rate

76

% Employee utilization rate

78

$ Telecom subscriber acquisition cost

80

Section V

82

Appendix A: Related Reports

82

Appendix B: The KPI Dictionary

84

Appendix C: Toolkits

86

Appendix D: Performance Magazine

87

Appendix E: Memberships

88

Appendix F: Subscriptions

89

Appendix G: Training Courses

90

Appendix H: Advisory Services

92

Appendix I: Software

94

Appendix J: Glossary of Terms

96

Top 20 KPIs - 2016 Edition

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SEC I

HOW TO USE THIS REPORT

Purpose of the report The Top 20 KPIs Report – 2016 Edition is aimed at sharing the KPI Institute’s valuable knowledge regarding the use of KPIs in measuring performance. The purpose of the report is to introduce readers to the most popular KPIs all around. Moreover, the goal of this report is to provide readers with a practical step-by-step guide to enhancing performance by simple recognition of the added clarity, focus and improvement KPIs bring to any performance measurement process. As much as it is a valuable resource for harvesting Key Performance Indicators, the Top 20 KPIs Report – 2016 Edition is not designated to supply readers with the ultimate solution to establishing the right KPIs for their organizations. The Top 20 KPIs Report is merely a collection of the most popular 20 KPIs all around. Conveyed from smartKPIs.com, the Top 20 KPIs selected for the report, are a collection of the most viewed KPIs in all functional areas or industries considered, based on site statistics and online community readings.

Readership profile The Top 20 KPIs report – 2016 Edition is intended KPI 7

Industries Sub-categories Tags

Any Any portfolio, customers

Description

Calculation

Definition

Subordinate metrics

A = # Promoters B = # Detractors C = # Customers

Calculation formula

(A/C)*100-(B/C)*100

Trend is good when

Increasing

Measures the net difference between promoters and detractors, of all customers that express an attitude. Note: Net Promoter, Net Promoter Score and NPS are registered trademarks of Fred Reichheld, Bain & Company and Satmetrix.

Variations

% Promoter score % NPS

Related KPIs

% Customer satisfaction with new products and services

Focus Purpose

To monitor the level of customer satisfaction by evaluating the extent at which customers act as brand ambassadors.

BSC perspective

Data Profile Data capture period

Spot

Standard reporting frequency

Monthly

Data collection method

Customer satisfaction surveys

Limitations

Being based on customer surveys, results can be altered by the respondents’ subjectivity or incentives given by the company to stimulate responses.

Customer

Objective measured Increase customer advocacy

Targets

The novelty in the KPI Documentation Form template for the Top 20 KPI reports – 2016 Edition, is its unprecedented design. The first page contains updated fields of the KPI Documentation form as researched and analyzed by The KPI Institute. The second page of the KPI Documentation form includes valuable guidance on KPI Reporting, based on actual exemplification of KPI results and pertinent illustrations of Scorecard and Dashboard designs for each of the KPIs included in the report. Not only that, but the newly developed KPI Documentation Form, invaluably shares “In practice” recommendations for best KPI use, analysis and interpretation, while ultimately distinguishing itself from all other performance measurement resources on the market.

References 1. Bain & Company (2012), Creating a reliable metric, available at: http://www.bain.com/publications/articles/creating-a-reliablemetric-loyalty-insights.aspx 2. Department of Agricultural Leadership, Education and Communications (n.d.), Net Promoter Score, available at: http://agrilife. org/od/evaluation/results-2/net-promoter-score/ 3. Qualtrics Labs (2012), Net Promoter Score (NPS) explained, available at: https://www.qualtrics.com/net-promoter-score-npsexplained

Scorecard Outlook Perspective Strategic Objective

Customer Increase customer advocacy

Key Performance Indicator

SmartKPIs.com Standard Previous reference reporting period number frequency results

Current results


sK1303

49%

Target setting notes





Red: <50%

Yellow: 50-70% Green: 70%



Benchmarking is promoted by Satmetrix, a co-developer of net promoter, benchmark figures being available on their online community: http://www.netpromoter.com/ netpromoter_community/community/npsbenchmarks?vie w=tags&tags=benchmark

Analysis and Resources Overall notes NPS is used nowadays by many large companies as a customer feedback tool. It gives an unambiguous number that is easy to understand for all employees and useful as input for managers to steer the company. NPS also gives a good indication of growth potential and customer loyalty for a company or product. To understand the motives of Promoters and Detractors, it is recommended to accompany the NPS question by one or more open questions that probe the underlying reasons behind the given score. This allows

managers to make the appropriate adjustments to increase the future NPS, either by boosting the percentage of Promoters, either by reducing the proportion of Detractors (or better yet, a combination of both). Additional resources Î http://www.callcentrehelper.com/top-tips-forimproving-netpromoter-scores-nps-42754.htm Î http://blogs.hbr.org/2011/05/how-philips-uses-netpromoter/ www.kpiinstitute.org | [email protected] | +61 3 9028 2223

M

51%

Trend

Target

%Target complete

Results



95%

51%



Dashboard Outlook KPI Results % Net promoter score

% Net promoter score 74%

M1

M6

76%

72%

69%

72%

M3

M5

74%

76%

M2

51%

69%

M4

Threshold examples

Page 6

The KPI Documentation Form template


Functional Areas Marketing & Communications Sub-categories Marketing KPI Record sK1303

Page 54

for practitioners, academics and consultants who are professionally engaged with the Performance Management discipline. It is dedicated to students of business, economics and any other performance management related field. The report is committed to any individual or organization that may find reason into both researching and strengthening their knowledge on performance that needs to be measured.

49%

51% 49%

M1

M2

M3

M4

M5

M6

In Practice Recommendations Customer satisfaction is no longer the ultimate goal of companies in their relationship with clients. Going beyond the satisfaction level, the % Net promoter score outlines the percentage of clients who would further recommend the company’s products and services. NPS divides customers into 3 categories:  “Promoters” – are considered loyal clients that will keep on buying the company’s products and services and will recommend other people to do the same.  “Passives” – are satisfied clients, but would not further recommend the company’s products and services. “Passives” can easily be convinced by similar products and services on the market.


 “Detractors” – are unsatisfied customers, who most certainly would not further recommend the company’s products and services. The KPI is measured by subtracting the percentage of detractors from the percentage of promoters. A survey consisting in one question - “How likely is it that you would recommend us to a friend?” – is used to capture the data. One of the challenges in measuring this KPI is to distinguish between the customer’s satisfaction with one service, like Customer Care and his loyalty to the company, or brand. This is why companies additionally use bottomup and top-down surveys, for further inquiries that help generate a more precise diagnostic.

Page 55


REPORT STRUCTURE The Top 20 KPIs Report – 2016 Edition is structured to include 5 main sections:

Section I Introduction: Briefly describes the purpose of the report, as well as, clarifies its structure to the readership.

Section II Overview of the smartKPIs.com platform: Provides a brief description of the smartKPIs.com community profile, by country breakdown, organization size, industry affiliation, job title, managerial role, and performance management related job titles. The smartKPIs.com taxonomy, takes the reader further into the functional areas and industries that The KPI Institute has researched and documented the KPIs selected for the Top 20 KPIs Report – 2016 Edition.

Section III Insights into the world of KPIs: Ensures a deep understanding of the main stages involved in the process of establishing KPIs for the organization. The section takes the reader on a compelling journey that starts with the clarification of the common KPI terminology, and moves forward with a description of the KPI selection process, guidelines for KPI documentation, as well as, a brief tutorial into setting KPI targets. Culminating with the much anticipated matter of KPI use for decision-making, this section further introduces the reader to the multiple dimensions of data gathering, data visualization, analysis and reporting.

Section IV Top 20 KPIs catalogue: Itemizes the Top 20 KPIs on smartKPIs.com, as per the popularity of the selected indicators on the online community platform. The section additionally provides the reader with a documented KPI form, actual guidance on KPI reporting, as well as, “in practice” advice on generating the most value from the KPI analyzed.

Section V Related educational resources: Encompasses an extensive list of invaluable publications and educational programs that readers can use in their further explorations of the performance management discipline.

V I

III

INTRODUCTION

II OVERVIEW OF THE SMARTKPIS. COM PLATFORM


INSIGHTS INTO THE WORLD OF KPIS

IV

RELATED EDUCATIONAL RESOURCES

TOP 20 KPIS CATALOGUE

Page 7

REPORT HIGHLIGHTS Given the economic context and the methodological advancements of today, organizations increasingly focus on managing and measuring performance as a key component in achieving the desired performance results for generating business value. Key Performance Indicators (KPIs) embody the critical component of modern performance management and measurement systems. As such, there are many organizations today that have diverse performance management initiatives, which entail the measurement of results against targets by using KPIs. To provide a glimpse into the use of KPIs in practice, The KPI Institute has launched its first edition of Top KPI reports in March 2011. The reports were dedicated to analyzing the most popular KPIs across major functional areas and industries. The Top KPIs report series, have

now reached their third and most comprehensive edition, while reflecting on the enriched experience of the editorial team in publishing such reports. The Top 20 KPIs Report - 2016 Edition compiles the most popular KPIs used by global organizations throughout the 2009-2015 period. The methodology used to advance this report consists in ranking the KPI examples documented and published on smartkpis.com, based on the number of views collected from 2009, until 2015. The hundreds of thousands of visits on smartkpis.com and the thousands of KPIs visited, bookmarked and rated by members of the online community in these six years provided a rich data set, which combined with further analysis from the KPI Institute’s editorial team, formed a basis for the hereby presented research report.

“One of the most important benefits that this report brings is an international perspective on the most popular 20 KPIs in the smartKPIs.com database.”

Value added by Top KPIs Reports to practice

REPORT CONTENT Best practices

Page 8

PURPOSE

RESULT

Enable learning

Improved Performance Measurement Competencies


One of the most important benefits that this report brings is an international perspective on the most popular 20 KPIs in the smartKPIs.com database. They provide quantifiable measurement of the main components that lead to a successful implementation of strategy. The documentation of KPIs compiles both academic insights and practitioner experience in working with these performance management tools.

Furthermore, Top 20 KPIs Report – 2016 Edition provides a complete hands-on experience in working with KPIs as it contains not only 2 pages of detailed documentation for each KPI, but also interesting articles on best practices in terms of KPI selection and documentation.

Top 3 KPIs of 2009-2015

# KPIs per functional area or industry

% Hospital bed occupancy rate % Call setup success rate (CSSR) % Production schedule attainment

8282 5561 5180

Marketing

4

Human Resources

3

Inventory Management

2

Sales

2

Production and Quality

2

Professional Services

2

Telecommunications

2

Logistics / Distribution

1

Project Management

1

Healthcare

1

REPORT HIGHLIGHTS


Page 9

SEC II ABOUT THE KPI INSTITUTE The KPI Institute is a research institute specialized in business performance. It operates research programs in 12 practice domains ranging from strategy and KPIs to employee performance and from customer service to innovation performance. Insights are disseminated through a variety of publications, subscriptions services and through a knowledge platform available to registered members. Support in deploying these insights in practice is offered globally through training and advisory services.

Key Figures

ORGANISATION

2004

Year of establishment

22

Research Analysts

4

Offices around the globe: Australia, Malaysia, Romania, United Arab Emirates

RESEARCH

49,280

Organizations assisted through smartkpis.com

20,603

KPI examples published on smartkpis.com

12

Years spent on researching performance best practice

EDUCATION

6,240

4,408

4,596

Training hours delivered

Client organizations

Professionals trained

319

31

5

Education programs delivered

Page 10

Countries where we delivered educational programs

Continents where we served clients


The KPI Institute explores its practice domains from a holistic approach. In order to shape performance practices in the business environment we build consistently on the following 10 pillars. The KPI Institute contributes to the development of the 12 practice domains, by focusing not only on research, publications, learning programs and consulting, but also on enhancing networking between professionals through online communities or business events and facilitating access to relevant technology solutions.

Our Pillars



Research



Publications





In-depth reports, articles and templates that enable you to keep up to date with industry trends and leaders.

Learning

Specialized training programs meant to shed light on the essential insights and practical tools that improve business performance.

Certification

Networking

Access to a wide Community of Practice where professionals share their knowledge and expertise. The KPI Institute provides the perfect environment to keep up with the latest trends and events in the field of performance.


Events

Conferences, forums and executive meetings reaching globally that bring new trends and developments, industry best practices and the most innovating solutions in today’s business environment.

The most comprehensive collection of resources, research studies and tools to enable organizations to be always at the top of the game in their industry.

Certification Programs designed to support professionals to achieve business excellence in 12 different practice domains that range from strategic planning and performance management to data visualization and innovation.







Benchmarking

Benchmarking studies that ensure you stay ahead of your competition, identifying opportunities to maximize results.



Awards

The KPI Institute recognizes customers and partners that have excelled in driving business value through several award categories.



Consulting

By embedding research outcomes and practical experience from the business environment, The KPI Institute offers high quality advisory services to guide organizations towards achieving their ultimate vision.



Solutions

Sustainable technology solutions to support business processes and ensure agility in working with data in today’s business environment.

Page 11

SMARTKPIS.COM COMMUNITY PROFILE Since its launch in 2009, smartKPIs.com established itself as the favorite destination for professionals around the world interested in high quality documented examples of metrics. With hundreds of thousands of page views and more than 79,000 members from 250 countries, smartKPIs.com is one of the most used performance measurement resources online. What sets the smartKPIs.com community apart is the profile of its members, as it is a truly global community, with relatively uniformly spread representation in terms of membership around the world. While the highest number of members come from English speaking countries, no single country dominates in terms of representation. The same applies in terms of organizational size, as smartKPIs.com memberships are popular among small size companies (11-100 employees), but also across medium and large organizations (+10,000 employees).

 United States - 15.24%

 United Arab Emirates - 3.53%

 Malaysia - 3.72%

 Canada - 2.88%

 Saudi Arabia - 3.45%

 Australia - 6.69%

 United Kingdom - 5.29%

 India - 12.28%

 Other - 44.29%

 South Africa - 2.32%

 Indonesia - 2.43%

5

4 1

2

3

9

7 6

10 8

Throughout 2013 and 2015, the smartKPIs.com.com community has experienced a growth of more than 30%. The increase discloses a rising demand for performance measurement tools. The fascination with KPIs is also reflected in the increasing number of views recorded by the site in the period afore-mentioned. In terms of industry affiliation, the majority of smartKPIs.com community members operate in the Consulting industry. The Information Technology and Manufacturing industries closely follow in the hierarchy, which reflects on the steadfast interest for

Page 12


KPIs within these areas. Throughout 2013 and 2015, we can observe a substantial increase in the number of subscribers affiliated to financial institutions, which almost match the number of subscribers from the manufacturing industry.

9.57% 20.19%

11-100

19.77%

101-500 9.64%

501-1000

5001-10000

2.32%

Retail

3.36%

Engineering

3.44%

Logistics

3.51%

Public Sector

3.53% 4.09%

Healthcare

4.22%

Media

4.23%

Telecommunications

4.53%

Professional Services

4.59%

Others

Consultant

7.50% 8.78%

IT manager

26.64% 34.15%

Finance Manager

1.57%

Project Manager

1.75% 7.57% 9.24% 27.17%

Manager

The analysis of smartKPIs.com community profile reveals that positions like Strategy Manager or Performance Management Officer are not yet very well legitimated within organizations, in many cases these roles are assimilated by other positions. Only 0.2% and 0.7% our members are officially occupying a strategy or performance management position.

5.20% 8.22%

Manufacturing

8.55%

Hospitality

8.58%


7.25%

IT manager

8.52%

Consulting

HR manager

HR Manager

Financial Institutions

Information Technology

7.01%

Managerial role

Utilities

Education

Director

The breakdown for the subscribers’ job positions reflects a higher than average representation for Information Technology and Human Resources managers, while community membership is dominated by managers, consultants and business analysts. Overall, the community profile of smartKPIs.com reveals a diverse and highly qualified membership base.

13.20%

Industry affiliation Construction

4.50%

Other

5.58%

10000+

2.69%

Manager 13.94%

1001-5000

1.48%

Business analyst

7.95%

1-10

CEO Student

Organization size (by no. of employees) Self

Job Title

Performance/Strategy Professionals Strategy related job titles

9.31% 11.88%

Performance related job titles

0.70% 0.20%

Page 13

2016 smartKPIs.com Functional Areas Taxonomy 16 Functional Areas with 64 Main Functions Accounting (310) ÎÎ Cash Management (43) ÎÎ Control (16) ÎÎ Cost analysis (51) ÎÎ Accounting Systems (39) ÎÎ Planning and Reporting (71) ÎÎ Transactions/Accounts Payable/Accounts Receivable (90) Corporate services (163) ÎÎ Administration/Office Support (25) ÎÎ Corporate Travel (28) ÎÎ Facilities/Property Management (76) ÎÎ Legal Services (34) Corporate Social Responsibility (76) Finance (236) ÎÎ Asset/Portfolio Management (51) ÎÎ Financial Stability (43) ÎÎ Forecasts & Valuation (57) ÎÎ Liquidity (29) ÎÎ Profitability (56) Governance, Compliance and Risk (181) ÎÎ Compliance and Audit Management (57) ÎÎ Governance (65) ÎÎ Risk Management (59) HSSE (Health, Safety, Security and Environment (295) ÎÎ Environment (155) ÎÎ Health & Safety (117) ÎÎ Security (23) Human Resources (463) ÎÎ Compensation and Benefits (53) ÎÎ Efficiency and Effectiveness (49) ÎÎ Recruitment (76) ÎÎ Retention (29) ÎÎ Service Delivery (35) ÎÎ Talent Development (116) ÎÎ Workforce (55) ÎÎ Working Environment (50) Information Technology (616) ÎÎ Application Development (82) ÎÎ Data Center (38) ÎÎ Enterprise Architecture (43)

ÎÎ ÎÎ ÎÎ ÎÎ

IT-General (53) IT-Security (118) Network Management (60) Service Management (221)

Knowledge and Innovation (205) ÎÎ Innovation (46) ÎÎ Knowledge Management (71) ÎÎ R & D (88) Management (73) Marketing & Communications (238) ÎÎ Marketing (168) ÎÎ Public Relations (36) ÎÎ Advertising (34) Online Presence - eCommerce (228) ÎÎ eCommerce (49) ÎÎ Email Marketing (25) ÎÎ Online Advertising (34) ÎÎ Online Publishing - Weblogs (25) ÎÎ Search Engine Optimisation (SEO) (25) ÎÎ Web Analytics (59) Portfolio and Project Management (121) ÎÎ Benefits Realization Management (11) ÎÎ Portfolio Management (53) ÎÎ Project Management (57) Production & Quality Management (212) ÎÎ Maintenance (39) ÎÎ Production (96) ÎÎ Quality Management (77) Sales and Customer Service (320) ÎÎ Customer Service (140) ÎÎ Sales (180) Supply Chain, Procurement, Distribution (468) ÎÎ Contract Management (51) ÎÎ Inventory Management (93) ÎÎ Logistics / Distribution (157) ÎÎ Procurement / Purchasing (102) ÎÎ Supply Chain Management (65)

*The figures in brackets represent the number of documented KPI examples available on smartKPIs.com as of 1st of January 2016.

Page 14


2016 smartKPIs.com Industries Taxonomy 25 Industries with 96 divisions Agriculture (308) ÎÎ Crops (123) ÎÎ Forestry and Logging (34) ÎÎ Livestock, Hunting and Fishing (150)

ÎÎ ÎÎ ÎÎ ÎÎ ÎÎ

Arts and Culture (432) ÎÎ Event Production and Promotion (26) ÎÎ Libraries and Archives (356) ÎÎ Museums (49)

ÎÎ

Construction & Capital Works (102) ÎÎ Civil Engineering (29) ÎÎ Construction of Buildings (73)

ÎÎ

Customs (246) ÎÎ Border Protection and Enforcement (63) ÎÎ Compliance and Risk Management (34) ÎÎ Customs Administration (32) ÎÎ Immigration and Travel (35) ÎÎ Revenue Collection (20) ÎÎ Trade Facilitation (62)

ÎÎ

Education & Training (738) ÎÎ Academic Education (258) ÎÎ Colleges and Universities (176) ÎÎ Primary and Secondary Schools / K-12 (252) ÎÎ Training and Other Education (43) Financial Institutions (523) ÎÎ Banking and Credit (158) ÎÎ Insurance (77) ÎÎ Investments (62) ÎÎ Mortgages (160) ÎÎ Pension Funds (66) Government - Local (866) ÎÎ General Local Administration (62) ÎÎ Public Services (174) ÎÎ Economic & Business Affairs (92) ÎÎ Public Safety (124) ÎÎ Social Services (143) ÎÎ Budget and Finance (38) ÎÎ Culture, Recreation and Entertainment (41) ÎÎ Community - Quality of Life (34) ÎÎ Environment (142) ÎÎ Sports (16) Government - State / Federal (919) ÎÎ Military, Security and Defense (21) ÎÎ General State Administration (87) ÎÎ Agriculture, Fisheries and Forestry (49)


ÎÎ ÎÎ ÎÎ

ÎÎ ÎÎ

Education (122) Finance / Treasury (26) Healthcare (118) Tourism (76) Transportation and Infrastructure (54) Resources and Energy (52) Foreign Affairs and Trade (9) Human / Social Services (33) Employment and Workplace Relations (94) Law and Justice (111) Law Enforcement/Police (34) Communications, Multimedia and Information (17) Sports (16)

Healthcare (1573) ÎÎ Healthcare Support Services (37) ÎÎ Veterinary Medicine (7) ÎÎ Medical Practice (299) ÎÎ Hospitals (1103) ÎÎ Medical Laboratory (30) ÎÎ Emergency Response / Ambulance Services (34) ÎÎ Preventive Healthcare (36) ÎÎ Pharmaceuticals (17) Hospitality & Tourism (351) ÎÎ Food and Beverage Service (170) ÎÎ Hotel / Accommodation (140) ÎÎ Travel Agency (41) Infrastructure Operations (730) ÎÎ Airports (344) ÎÎ Ports (292) ÎÎ Railways (26) ÎÎ Roads (68) Manufacturing (99) Media (152) ÎÎ Broadcasting (TV and Radio) (59) ÎÎ Film and Music (45) ÎÎ Social Media (45) Non-profit / Non-governmental (519) Postal and Courier Services (295) Professional Services (495) ÎÎ Engineering (42)

ÎÎ ÎÎ ÎÎ ÎÎ

Recruitment / Employment Activities (55) Legal Practice (282) Business Consulting (84) Accounting Services (32)

Publishing (57) Real Estate / Property (187) ÎÎ Property Management (83) ÎÎ Real Estate Development (70) ÎÎ Real Estate Transactions (34) Resources (458) ÎÎ Coal and Minerals Mining (336) ÎÎ Oil and Gas (66) ÎÎ Sustainability / Green Energy (56) Retail (160) Sport Management (144) ÎÎ Coaching / Training (27) ÎÎ Sport Club Management (66) ÎÎ Sport Event Organization (46) Sports (147) ÎÎ American Football (12) ÎÎ Badminton (10) ÎÎ Baseball (29) ÎÎ Basketball (19) ÎÎ Cricket (10) ÎÎ Football / Soccer (27) ÎÎ Rugby (10) ÎÎ Tennis (32) Telecommunications / Call Center (156) ÎÎ Call Center (86) ÎÎ FTTX (27) ÎÎ Telecommunications (43) Transportation (687) ÎÎ Airlines (515) ÎÎ Land Transport (Road & Rail) (510) ÎÎ Local Public Transport (374) ÎÎ Marine Transport / Shipping (246) ÎÎ Taxi (39) Utilities (613) ÎÎ Electricity (118) ÎÎ Natural Gas (350) ÎÎ Water and Sewage (145)

Page 15

SEC III KPIS…NATURALLY Measurement as a human activity is not new. It emerged in early history as a mean for discovery and sense making. Archaeologists consider the first measurement tool used in human history to be the Lebombo bone, a baboon fibula containing 29 cut notches. Dated 35,000 BC, this tally stick was discovered in the Lebombo Mountains in Swaziland.

“New philosophy of performance, driven by self-assessment and purposeful achievement as a mean to happiness.”

Evaluation, as a form of measurement was used as early as the 3rd century AD, when emperors of the Wei Dynasty rated the performance of the official family members. The biased nature of individual performance evaluation was noticed by Chinese philosopher Sin Yu, who reportedly criticized a rater employed by the Wei Dynasty with the following words: “The Imperial Rater of Nine Grade seldom rates men according to their merits, but always according to his likes and dislikes”.

Yes, but it is not simple. It requires a change at multiple levels, from the underlying philosophy of performance, to mentalities and processes. This is not easy. Over time, the use of Key Performance Indicators (KPIs) became synonym to performance measurement and management. KPIs are the link between the old and the new in performance management. Their use, however, is much richer and rewarding in an environment based on organic performance architecture principles:

A major milestone in making the connection between measuring as a human activity and performance was in 1494, when Luca Pacioli published in Venice ‘Summa de arithmetica, geometrica, proportioni et proportionalita’ (‘Everything on arithmetic, geometry, proportions and proportionality’). It detailed a practice the Venetian sailors had in place to evaluate the performance of their sailing expeditions, which became the basis of the double-entry accounting system. In time, the subjective nature of individual performance evaluations and the dominance of financial indicators for evaluating enterprise performance became stepstones for performance management in human activities. The industrial revolution added to this combination the “organization as a machine” metaphor that played a major role in driving improvements in efficiencies and effectiveness. The result was an organizational performance management model based on mechanistic, command-and-control thinking, driven by subjective individual performance assessments and financial indicators and crowned by pay for- performance arrangements.

Organizations are echo-systems in their own right. They vary in terms of maturity and the environment in which they operate. As such, their use of performance management systems should reflect their own “personality”. You can try to build an igloo in Sahara, but it won’t be sustainable. The performance architecture of each organization needs to be unique and to reflect its internal and external environment.

Did it work? To a certain extent, yes. Many organizations flourished and matured based on this model.

Does it have flaws? Many. And while historical circumstances attenuated them in time, today’s environment amplifies and exposes them at an accelerated rate. Page 16

Is there a better way?

Systems thinking provides a much richer context for understanding and improving performance. Commandand-control worked in time for the army, for increasing productivity of unskilled workers during the industrial revolution and for managing large organizations (such as the public service). Today, knowledge workers form the majority of the workforce in developed economies, operate in a much more interconnected environment and have to make decisions at an accelerated pace. Understanding the systems in which we operate, analyzing flow and learning based on data become ever more important today and complement the traditional simplistic managerial approach of executing orders from above. KPIs should be used primarily for learning. The role of KPIs should be the one of providing the required information to assist in navigating towards the desired results. The same principle is used by ants, who leave pheromone trails to assist each other in navigating towards the food source. Similarly, the nerve impulses travel through the different points of the nervous system,


transmitting information. KPIs results should travel through the organization, facilitating communication, providing a base for analysis / synthesis and ultimately decision making across all levels of the organization. Data accuracy in human administration is an elusive desideratum. Neils Bohr once said: “Accuracy and clarity of statement are mutually exclusive”. Accuracy is a challenge in exact sciences and even more in human administration. Striving to obtain any KPI data is a challenge in itself for many organizations and data accuracy is an even bigger ask. The use of KPIs should acknowledge this aspect and be oriented towards making the most out of existent data, oftentimes by using variance intervals. This approach is used by the human body. If the temperature drops under a safe limit, we shiver. If the temperature increases, we sweat. Both are performance improvement initiatives of the body, aimed to regulate its temperature back to safe limits. The KPI here is the temperature. While it is not a constant, its trend is good when within certain safe limits. The use of KPIs for rewards and punishment should be limited and driven by self-assessment. Purposeful oriented behavior is a characteristic of living organisms. For humans and many other species, this behavior is amplified by rewards and punishment. Along with this amplification, risks are amplified, too. Gaming of results, lack of cooperation, decreased morale and work accidents are some of the undesired consequences. On the other hand, the majority of nerve impulses in the human body transmit general information. Only in particular situations pleasure or pain signals. Similarly, the use of KPIs for rewards and punishment should be the exception to the rule, rather than the norm. Embedding KPIs in organizations through visualization and communication of KPIs results is the key to maximizing their value added. Variations in the KPIs used by the human body are felt by our senses as their impact is sensory rich. Similarly, KPIs used in an organizational context should be embedded in everyday use and be a part of the working experience. The most important aspect of communicating KPI results is their visual representation. This is key, both in terms of optimizing the layout of the data representation and the presence of visual displays in the working environment. The range of media is diverse today: posters, whiteboards, banners, LED and LCD monitors should be combined to bring results to life across the organization. KPI results should Top 20 KPIs - 2016 Edition

not be restricted to paper reports and computer screens anymore. New philosophy of performance, driven by selfassessment and purposeful achievement as a mean to happiness. While happiness means many things to many, a common expression of this feeling is the result of the purposeful achievement of a desiderate. Achieving something we want, while shared with others, is about us and reverberates strongly in our inner self. Transposing this powerful catalyst of performance in both our personal and organizational life is facilitated by a new paradigm: Happiness is driven by achievement. Achievement is an expression of performance. If we want to be in control of our happiness, we should be in control of our performance. Self-assessment of performance results is not easy. However, if more emphasis is placed on building this capability in each employee, organizations can benefit by creating a rewarding environment conducive to happiness. In this environment, managers can focus on understanding and improving the working system, while employees can focus on self-assessment of the results’ achievement, learning and communicating. Purposeful achievement of results in a well-structured working system would bring both individuals and organization much closer to happiness and fulfilment compared to the payment of bonuses in the current command-and-control driven dominant paradigm.

“KPIs are here to stay. The question we have to answer is how do we want to use them: mechanistically or naturally?”

Aurel Brudan Chief Executive Officer The KPI Institute

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ABOUT KEY PERFORMANCE INDICATORS (KPIS) In many domains of human activity, the usage of tools is essential for achieving the desired results. Measurement and evaluation make no exception, being equipped with both conceptual and physical tools. Of the first category, at the core of any performance measurement and management system are the Key Performance Indicators (KPIs) used. They provide the important data that is monitored and reported within an organization, by using scorecards or dashboards.





METRICS FOR MEASUREMENT

KEY PERFORMANCE INDICATORS



FOR PERFORMANCE ASSESSMENT





In practice, the terminology used to express them is diverse. The most common expressions are: performance indicators, metrics, key performance indicators or key result areas. Both academic and practitioner literature use these terms interchangeably, oftentimes even within the same organization. This can cause confusion among stakeholders, and it can also affect the way these tools are used in practice. Establishing a common terminology at organizational level brings everyone on the same page and facilitates a consistent approach to KPIs. To bring more clarity in working with KPIs, The KPI Institute recommends the following approach:

KEY RISK INDICATORS FOR RISK ASSESSMENT

ANALYTICS FOR DECISION MAKING

METRIC It has its roots in the word “metron”, used in ancient Greece to reflect measurement. Metrics refer to something we can measure, a value, or a quantity. Examples of metrics are: # Air temperature, # Air quality, # Water depth, # Height, # Weight or # Employees. When metrics reflect the achievement of a desired state, they become Key Performance Indicators. Oftentimes, metrics represent the subordinated measures used for calculating a KPI.



KEY PERFORMANCE INDICATOR (KPI) A measurable expression for the achievement of a desired level of results, in an area relevant to the evaluated entity’s activity. KPIs make objectives quantifiable, providing visibility into the performance of individuals, teams, departments and organizations and enabling decision makers to take action in achieving the desired outcomes. Typically, KPIs are monitored and communicated through dashboards, scorecards and other forms of performance reports.

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

KEY RISK INDICATOR (KRI) A metric that provides an early warning regarding an increased risk exposure in a certain area of operations. For example, a high level of % Clients experiencing financial difficulties can indicate the risk of not being able to collect all debts and will negatively impact $ Write-off accounts. By monitoring KRIs, managers are able to take a proactive approach in risk management by preventing incidents or diminishing their impact, when they occur.



ANALYTICS Consists in a data analysis of KPI results, meant to determine trends and data patterns in order to provide valuable information for better decision making. Analytics offer a better understanding of how the business works, and the interdependencies between KPIs. Predictive analytics can provide valuable insights in regards to our customers’ purchasing habits, the best time to launch a product, or how internal processes can be optimized.

What are the main reasons you use KPIs in your organisation? 43%

Improvement - objectively evaluate the level of results achievement 18%

Focus - outline what requires attention

17%

Clarity - provide a detailed numerical view of the desired results Engagement - generate a sense of results ownership through nurturing responsibility and accountability

13%

Communication - convey key messages to internal and external stakeholders Learning - facilitate a better understanding of the business

The research conducted by the KPI Institute in 2015 on the “State of Performance Improvement and KPIs” reveals the reasons KPIs are used in organizations worldwide. According to the data collected, “focus”, “clarity” and “improvement” are the main arguments that promote and justify the use of KPIs in various organizations. Most professionals – 43% - use KPIs in order to improve performance. Two other significant reasons for KPI use are “focus” and “clarity”, and they reflect on the desire to generate value by focusing on the important aspects of performance and gaining clarity into the organization’s


6% 3%

core operational processes. “Engagement” is the reason 13% of professionals claim to be using KPIs for. This indicates the fact that the need to nurture responsibility and accountability is partly addressed through the use of KPIs, although it is not one of the main reasons KPIs are used in business environments. An interesting finding regarding the use of KPIs in organizations, is the faint emphasis placed on rationales such as: “communication” and “learning”. Despite the need for constant feedback, this shows that professionals are still facing difficulties in communicating results and using performance data in a double loop learning process.

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ADVICE ON KPI SELECTION Choosing the right KPIs represents the basis for a successful performance management architecture. Given its paramount importance for the performance management system, the KPI selection process is one of the most common challenges professionals are facing in working with KPIs. Confronted with questions like “How can we measure the achievement of this strategic objective?”, “How does a KPI look like?”, “How many KPIs should we have?”, “Where can we find examples of KPIs?” or “How can I ensure a set of KPIs that is relevant for my business?”, professionals can easily get lured into a KPI selection process were efforts are pointlessly wasted and poor results are produced. Before embarking on the KPI selection journey, The KPI Institute recommends to have in mind the following guidelines:

 Internal research

 External research

Start your KPI selection process by reviewing the existing internal reports or other supporting documents, as well as, by using the documentation at hand. Previous business or strategy plans, annual reports, performance reports and other documentation that relates to performance management, measurement and benchmarking will be very helpful in understanding the current level of using metrics or KPIs in the organization, and sets a baseline to initiate discussion. A KPI selection process does not have to put aside the metrics that are already used. It does not have to focus exclusively on bringing new examples, but to combine the elements that proved effective in the past with new perspectives.

Use external lists of KPI examples and other secondary documentation to inform and support the KPI selection. Reviewing KPI examples used by competitors or other organizations in the industry or functional area, provides context to the practices of others and improves understanding of the way KPIs look like and the means used in working with them. Avoid selecting KPIs based on the argument that they are widely used in your business, and filter that list of popular examples through your organizational strategy: do they make sense for what you want to achieve?

KPI SELECTION INPUT



ANNUAL REPORTS



COMPETITORS REPORTS



OPERATIONS REPORTS



ONLINE CATALOGUES



FRONT-LINE EMPLOYEES INPUTS



BOARD AND MANAGERS INPUTS

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

INTERNAL RESEARCH

EXTERNAL RESEARCH

 

EXPERTS



SUPPLIERS AND CUSTOMERS


 Value drivers and business objectives For a relevant KPI selection it is essential to start the process by identifying what drives most value for the business and where resources are most worth invested. The business strategy should be built around value drivers. KPIs serve as tools to monitor strategy implementation. They are just one component of the value creation chain and of the performance management system. In this context, KPIs should be directly liked to business objectives. They create the connection between strategic objectives and actions (initiatives), and when KPI targets are not achieved, decisions must be taken to improve results.

 KPI selection workshop This is the preferred format to deploy an effective selection process because it provides the adequate environment to analyze all sources of information, as well as, brings key stakeholders to the same table. It is important to involve KPI owners or even data custodians in the workshop, in order to inspire stronger commitment towards the new KPI framework. We can also have external stakeholders, namely, major clients, business partners, suppliers contributing to the KPI selection. In this way, we can ensure that all relevant inputs are considered. Information coming from the external business environment can be integrated into the workshop with no physical presence required from stakeholders. Inputs can be collected through an interview / discussion. During this workshop, participants should be engaged into applying different KPI selection techniques, such as, the value flow analysis, KPI balancing and clustering, in order to generate insights into the multiple facets of measuring an objective or process. This event should also be explored as an opportunity to promote the use of KPIs within the entity, to consolidate a performance management team and to educate stakeholders in managing performance.

 Scorecards and Dashboards

manage the business, such as dashboards or scorecards. By presenting the objectives, KPIs and performance results associated into some visual dynamic tool managers can easily grasp the pulse of the business and take actions.

 Context The realities of organizational activity and business environments should be embedded in your KPIs. Each organization is different, operating in different environment, with different guiding principles. Hence the KPIs used need to reflect the specifics of each organization first and industry/functional area characteristics second.

 No measuring measurement

for

the

sake

of

Some aspects may not be worth measuring or monitoring because they are not important, while others may be relevant for the business, but collecting data can be too costly. In both situations, it makes no sense to waste resources on gathering data that has no economic justification.

 Regular review Check the KPI relevance regularly. If new KPIs are required, they can be established at any time. An essential aspect of double loop learning is connected to using KPIs. It is not only about achieving targets and objectives, but also about ensuring the objectives and targets were the right ones to be set in the first place and the KPIs used to track their achievement were the appropriate ones.

 An active KPI is better than an inactive KPI If after more performance measurement cycles certain KPIs keep on being inactive due to various reasons: infrastructure, technology or competence, it is better to eliminate of replace them. Instead of waiting to build the adequate system to measure # Customer satisfaction index, you can start with a simpler KPI to monitor clients’ satisfaction like # Complaints received.

Consolidate the outputs of the KPI selection workshop into hands-on tools that can be used on a daily basis to


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KPI DOCUMENTATION GUIDELINES The KPI documentation process is a comprehensive endeavor involving research, outline and analysis. A standardized documentation form aggregates all relevant information in regards to measuring a KPI and sets the basis for a rigorous and reliable data collection and reporting process.

Why use a KPI documentation form?



STRUCTURES KNOWLEDGE



The existence of KPI documentation forms within an entity creates an internal library of KPIs, that employees can access to learn how to collect data or to better understand performance results.

As an instrument, the KPI documentation form is very effective in terms of knowledge management. It captures the know-how, enables constant updating, transfer and retrieval of information.



COMMUNICATES EFFICIENTLY

EDUCATES STAKEHOLDERS



Through a standardized template, communication becomes more reliable and effective. It provides the necessary guidance to measure a KPI and ensures consistency from one data collection period to another.

ACTIVATES DATA COLLECTION Even if the content of a KPI documentation form can vary from one entity to another, there are some critical pieces of information which are prerequisites for activating KPIs, such as KPI definition, calculation formula and targets.

A research conducted by the KPI Institute in 2015 on the State of Performance Improvement and Key Performance Indicators, reveals that over 40 % of organizations worldwide use a standardized form to document their KPIs. The State of Performance Improvement and Key Performance Indicator Practice Report highlights findings from The KPI Institute’s ongoing efforts of identifying the issues, trends and best practices impacting the field of performance management. The survey was conducted at international level, and it involved the members of the KPI Institute Community, which currently exceeds 79,000 professionals. As revealed by the chart below, the intense use of standardized KPI documentation forms proves common practice for 41% of professionals, while 29% of them stated that they deploy this tool in a moderate manner. 30% of respondents seem to be less familiar with standardized KPI documentation forms, as they stated that they use this tool, in a small to very small extent.

Standardized use of KPI Documentation Forms 41%

High or extended use of standardized KPI documentation forms Moderate use of standardized KPI documentation forms Minimal or no use of standardized KPI documentation forms

Page 22

29% 30%


Another study conducted by The KPI Institute in 2015, focused on analyzing over 50 examples of KPI documentation forms encountered in practice, has identified more than 50 fields used in various configurations of this tool. The most popular fields revealed by the study are listed in the graphic below:

Most popular fields 55

Name

41

Definition

34

Calculation formula Data source (report / system)

KPI Definition includes fields like KPI ID record, Name, Definition, Purpose and Variations.

27 26

Purpose

KPI Targets either includes specific targets, or thresholds outlining above target, within range and below target intervals. The Targets section can also contain additional information related to the target setting process.

19

Threshold example Related objective

17

KPI record

17

Overall notes

16

Unit type

16

The KPI Institute’s research outlines three prevalent clusters of information commonly used in the process of KPI measurement: KPI Definition, Targets and Data profile.

Data Profile outlines the data sources, accountability for data, KPI limitations and reporting frequency.

Most popular clusters of fields Definition and variations

3

Targets

2

Data profile

2


KPI documentation forms ensure a standardized approach in working with KPIs and contribute to building an organizational KPI library that is a valuable source of knowledge in performance management. The value added by using KPI documentation forms relates to clarifying the means and purpose for KPI measurement. Moreover, it ensures accountability by setting data owners and custodians for each KPI.

Page 23

TARGET SETTING: FROM THEORY TO PRACTICE Ask any retail consultant or sales agent about targets, and you will be bombarded with all the information they know about them. Each of their daily routines revolves around target achievement. With such positions, performance reviews are executed on a monthly basis, and targets are designed to motivate and increase performance levels. However, strenuous targets that aim for the stars can often be the cause for stress and self-devaluation, when they are repeatedly under-achieved. Setting targets might be easy when you’re at the top, but does it make sense to the ones at the bottom?

The implications of inadequate target-setting are immeasurable. Easy targets cannot be incentivizing enough to motivate performance. Stretch targets, otherwise known as the targets pushing the boundaries on what can realistically be achieved, can reach such a high level of demotivation that they negatively impact employee retention. Targets for control in many instances result in a dangerous combination of human greed and mechanistic behavior. Inappropriate targets can ultimately harm customers and generate risks.

In order to avoid tunnel behavior, lack of ethics, or risky decisions, it is important to conduct an efficient target setting process:

 Target setting

 Using thresholds

Based on the company’s historical data, on benchmarking studies, and on market analysis can provide valuable information and reference points in determining the appropriate level of targets.

Instead of targets provides a more detailed image in regards to performance. By replacing inflexible digits with intervals, thresholds can relieve the pressures of unilateral results.

 Decomposing

 Cascading targets

Long-term targets into short-term targets ensures a step by step approach that guarantees a sustainable development path for the organization.

Gives employees accountability for growth both within, and together with the organization. Organizational alignment is paramount to the achievement of ambitious company goals.

TARGET SETTING

Page 24






CONTEXTUAL ANALYSIS IN SETTING TARGETS

 Targets should be Ambitious enough as to trigger motivation, as well as, attainable, otherwise employees can get frustrated with their repeated underachievement.

 Setting targets For both individual and team KPIs significantly motivates staff members to act cohesively for the delivery of results.

 Transparency Works in favor of target acceptance. As long as employees have a clear understanding of what’s expected of them, they are more likely to perform well.

 Reward and recognition Driven target-setting is the norm. Reward and recognition platforms are major contributors to engagement outcomes.

EXTERNAL ANALYSIS (MARKET TRENDS)



EXTERNAL BENCHMARKING



INTERNAL BENCHMARKING



HISTORICAL RECORDS

longer. To keep employees motivated, it is important to acknowledge and reward even smaller accomplishments.

 Setting targets Is not a one-time event, it is a permanent process that involves periodical reviews and target recalibration. Adjustments should be made as often as necessary, in order to ensure target relevance.

Although with performance management systems, targetsetting can be a charming storytelling, it should not be just a matter of theory crafting. Thinking of profitability when setting targets does not necessarily lead to the desired outcomes. If it comes to the point that stretch targets are necessary, they should be about human excellence and not solely about financial success.

 Celebrate and reward Even small achievements. Some targets, especially stretch targets, may be very hard to achieve or might take


Page 25

DATA GATHERING DIMENSIONS Gathering data for KPI results is one of the most common challenges professionals face when measuring performance. An effective data gathering process should not only provide timely performance data, but also high quality data. Some of the main data gathering issues encountered by organizations are related to five main themes, namely:



ACCURACY



Indicates the extent to which data reflects on the realities measured. Inaccuracy can be reflected by incorrect values, whether numbers or descriptive data (gender, location, preferences etc.), as well as, other information that has not been updated.



Refers to delivering consistent data across different reports. It implies a synchronization of data across the organization.



COMPLETENESS Refers to whether all available data is present. Unavailable data does fall short of completeness.



CONSISTENCY

UNIQUENESS Points out that there should be no data duplicates reported. Each data record should be unique, otherwise the risk of accessing outdated information increases.

TIMELINESS Indicates whether the data was submitted in due time, as per the data gathering deadline

 COMPLETENESS  ACCURACY

 TIMELINESS

 DATA QUALITY  UNIQUENESS

 CONSISTENCY

As the decision making process is significantly impacted by the performance data furnished in monthly reports, providing unreliable information might severely damage the organization, by influencing key factors towards making the wrong decisions. In order for the data gathering process to run smoothly, there are a few meaningful components to consider:

Page 26


 Data custodians

 Data gathering process map

Identify those employees who will become responsible for gathering the data. The profile of a data custodian should include hands-on measurement practice, KPI reporting abilities, technological skills (business intelligence tools or Microsoft Excel), insights into the processes assessed, access to data, as well as, an ethical commitment to preserving the integrity of data. Some companies may choose to outsource data analysis expertise, while other organizations might choose to name data custodians among existing employees.

A flow chart will provide data custodians with a more transparent data collection process, as well as, with clear deadlines for data availability.

 Expertise For the majority of companies, hiring a specialist, such as a data analyst, is not an option to be considered. As a consequence, these companies have to rely on the resources they already have. In this context, it is highly important for designated employees to be trained as data custodians. Developing this internal capability can be done through several initiatives, varying from formal training events to internal learning and sharing gatherings. A Data Custodian Community of Practice can help address different challenges by identifying the right solutions to these challenges. Participants can exchange experiences and come up with initiatives to improve the current data gathering process.

 KPI Documentation Form This document will ensure consistency in the measurement of individual KPIs, by presenting details such as KPI definitions, calculation formulas, data sources and measurement limitations. A well-documented KPI library will significantly impact the quality of the KPI measurement process.

 Internal audit Periodical audits of the data gathering process identify critical issues interfering with the quality of the data produced. Addressing these issues leads to the improvement of the data gathering process.

 Infrastructure Use technology in order to ensure an efficient data gathering. Having automated processes improves both the accuracy of data and its availability in due time.

The guiding principles hereby presented can aid the data gathering process by streamlining its main components and providing reliable data for decision making.

PROCESSING DATA


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ENHANCING PERFORMANCE DATA THROUGH VISUALIZATION An analytic, data-driven organization will almost certainly use data visualization to enhance its performance reporting. However, there is a certain complexity to data that requires its visualization to communicate simplicity and accessibility. An art in itself, data visualization is not just about converting raw data into visuals, but also about structure and narrative. Data visualization adds value to the performance reporting process when it manages to communicate the data in an elegant, comprehensive manner. Proficient data visualization improves the performance reporting process by optimizing the time required for data analysis and helping the user gain valuable insight into the decision-making process. When inadequately done, it creates confusion and ambiguity rather than provide desired answers.

“Proficient data visualization improves the performance reporting process by optimizing the time required for data analysis and helping the user gain valuable insight into the decision-making process.”

 Tailor the visualization to the purpose of the data The visuals that best convey performance data are the ones that enable the stakeholders to easily gather the information that they need. This is why designing visuals with the purpose of the data in mind, is vital to any internal and external analysis performed thereon.

 Be selective about the graphical representation of data The business intelligence environment of today supplies users with an unprecedented number of data visualization tools and techniques. Given the wide variety of charts, scatter plots, box plots and histograms, it is oftentimes strenuous to be selective about data visualization elements and their layout. However, an adequate representation of data will desist visual overload. At the same time, it will avoid a decorative visual design that suppressed the true meaning of the data.

395

261 171

395

261 171

2005

Page 28



# Vehicles sold

 Generate an effective visual design With performance reporting, it is essential that visuals complement the data gathered and not obscure it. Data visualization is meant to best uncover and reflect on the relationship between different data sets.



# Vehicles sold

2010

2015


Bar charts are a simple and discrete way to convey ranking and comparison. Bar charts are the ideal tool for the visual representation of performance data, especially because they are great in comparing values. Line charts are optimal for revealing trends over time. With performance data, line charts provide a historical view on the most relevant key performance indicators, by consolidating the reporting frequency (X axis) with the KPI results (Y axis). Dashboards are the preferred tools for performance data visualization. They make the best use of data to provide an integrated view on an organization’s performance. The flexibility in working with Dashboards allows for the use of various graphic representations to reflect on performance. The use of both bar charts and line charts amplifies the meaning of the data by disclosing its multiple patterns. While bar charts are better at establishing and comparing values for different KPIs, line charts can be extremely articulate in revealing KPI trends.



% Net Promoter score

74%

M1

76%

M2

72%

M3

69%

M4

51%

M5 M6

49%



% Net Promoter score 76%

74%

72%

69%

 Overcome the most common mistakes in data visualization One of the easiest ways to misrepresent data in a visual rendition is by distorting the y-axis. In most cases, the y-axis should have a range starting from 0 to a maximum that encompasses the range of the data. Although appealing, the use of 3D graphs can sometimes lead to the misinterpretation of data, especially if data labels do not specify exact values. 3D bar charts can have a negative impact on data readings. The color pallet used to highlight important data, should subtly match the semantic consistency of the content. High contrasts and chaotic color encodings can be both tiresome and unattractive.

 Perfect techniques

your

data

visualization

Providing the user with a meaningful data visualization helps spread the message behind the vast data in the background across and assist the viewer in reaching a quicker, strategic and, most importantly, correct decision. The interactivity of dashboards enables users to access different data sets with ease, supporting timely decision making.


51%

M1

M2

M3

M4

M5

49%

M6



% Net Promoter score

80% 60% 40% 20% 0% M1

M2

M3

M4

M5

M6

Page 29

DATA ANALYSIS The digitalization of global information systems, has spawned large volumes of data that have gradually become more difficult to manage. Having understood the characteristics of big data, the corporate world has been seen trying to contain it and build on the opportunities of its inductive abilities. In practice, many organizations are facing challenges like: `` Too much data, losing sight of what is important; `` Lack of expertise in processing the data; `` Lack of insight into the true meaning of data; `` Data gaming in presenting the data; `` Resilient focus on past performance.

 Too much data There is this common expression used to reflect on the overwhelming effect of big data. “Drowning in data” is a phrase that many of today’s managers have become acquainted with. One of the challenges in handling large volumes of data is related to the right database management systems and business intelligence tools needed to compute big data. There are few companies that own the right infrastructure to deal with big data issues, and the ones that do, should not forget about a well-articulated strategy to go with their technologies. Just because one has the infrastructure to measure everything, it does not mean one should actually do so. A consistent strategy will assist management with making use of only what’s essential and making use of the data that really makes a difference.

 Lack of expertise in processing the data Working with numbers is not a job for everyone and, like with any other practice domain, organizations need subject matter experts such as data analysts, or statisticians, to provide quality data. Key quality dimensions of data are related to accuracy, completeness, timeliness, consistency and uniqueness. Specialists who can provide quality data may be difficult to find and expensive to hire, but they can turn into a valuable investment for the organization.

 Insufficient insight into the true meaning of data One can agree that numbers have the ability to reflect on the objective reality of our business, but the way one chooses to interpret and use those figures can widely

$ Sales 1000

567

678

896

3223

334

445

444

334

2345

January

February

March

April

May

June

July

August

September

October

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2345

2356

November December


vary. In some cases, managers may not have the ability or skill to ask the right questions and verify what lies beyond the numbers, in order to get a true understanding of what is happening. It is a dangerous trap not to question the underlying assumptions based on which data was generated. Just because data was produced by the latest analytics model does not mean it is unquestionable.

 Data gaming While taking advantage of one’s lack of expertise, it seems very easy to also manipulate data. One has no interest in presenting data that is not working in their interest, therefore it is important to ensure the reporting process is structured as such, that it enables the mitigation data gaming risks. Reported data may be engineered to serve one’s interests, but the person in charge with decision making should have the ability to see beyond a beguiling presentation.

 Resilient focus on past performance Reporting is retrospective and many performance review meetings have become an opportunity for managers to present the data they need to justify their actions. There should be more interest towards moving forward, towards planning next steps and identifying key areas of action that will ensure the progress of the organization.

An effective data management and analysis system can be set up, despite all challenges but it needs to be connected to the organization’s value drivers, to the organization’s strategy. To avoid drowning in data, the strategy should be able to define what is important for the organization through clearly articulated goals and objectives. To ensure that objectives are reached, the company should identify several KPIs for each objective. The latter refer to tracking key processes within the organization that are conducive to the successful achievement of the objectives set. Scorecards and dashboards help validate the key figures decisions are based upon, and they make it easier to verify the reliability of the data, as well as, to ensure a proper KPI measurement and reporting process. It is barely enough to design and implement a performance management system. In the era of Big Data, an organization must also develop the capability to work with data. Key stakeholders need to be trained into how to collect data, how to report on data, how to analyze and take decisions based on the information provided in performance reports. By blending in these components: a performance management system, the right technological infrastructure and an organizational capability that specializes in working with data, one can see their organization overcome the disillusion of the data mirage, while it proceeds to finding and building on the true value of data.

# Customers 200

50

123

45

250

200

56

45

55

124

January

February

March

April

May

June

July

August

September

October


134

167

November December

Page 31

KPI REPORTING Reporting is an important stage in the performance management process, although managers can sometimes fall into the trap of considering it as the end of the performance cycle. However, just reporting on performance data will not ensure the improvement of results. Improvement is possible when decisions are made based on the insights provided by data. Common issues in reporting are the overload of information, which makes it hard to focus on what is important, the unavailability of information in due time or the inaccuracy of data. By following these 10 pieces of advice, you can solve the above-mentioned problems, ensure a better reporting and, consequently, improve the decision making process.

 Data timeliness

 Report availability

Ensure data timeliness by clarifying the responsibilities of data custodians and the data gathering process. Sending reminders also helps in receiving data on time.

Send the performance report to all stakeholders at least 3 days in advance of the performance review meeting, in order to ensure data is reviewed before the discussions.

 Data accuracy

 Meeting agenda

Verify for data accuracy by requiring for raw data as well and analyzing it before compiling the report. Frequent data audits ensure better accuracy.

Inform all participants about the performance review meeting agenda and make sure you stay on topic, in order to ensure the important issues are solved in due time. Should you be interested in conducting efficient and effective performance review meetings, make sure to include topics such as:

 Side comments Make sure performance results are accompanied by comments. Data custodians should also provide the context in which either high or low levels of performance occurred.

 Simple display Display data in tables and graphs by maintaining a simple and appealing visual design of the report.

`` Presentation of results; `` Discussions on the KPIs that are far from reaching targets; `` Analysis of the possible causes of underperformance; `` Review of the portfolio of initiatives; `` Decisions upon the next steps.

REPORTING

Page 32


Report compilation process

PROCESS DATA

CHECK DATA QUALITY





REVIEW DATA PROCESSED

 

COMMUNICATE REPORT





DATA ANALYSIS

GENERATE REPORT

 Discuss results

 Follow-up

Discuss the KPIs on red should with priority and identify the root cause of the problems.

Send a follow-up email with the meeting minutes and all initiatives established, along with their responsible persons and deadlines.

 Find solutions Avoid finding responsible persons for poor performance. Instead, focus on finding solutions and assigning accountability to make sure the initiatives agreed upon will be implemented.

When it comes to KPI reporting, improving this process represents the base of a better, more informed and efficient decision making process!

 Stay on track Keep it short, by assigning a meeting coordinator to keep discussions on the right track! A performance review meeting should not last for more than 2 hours.


Page 33

SEC IV TOP 20 KPI COUNTDOWN ANALYSIS

20 19 18 17 16

Page 34

% Brand awareness The extent to which the products/services of one company are associated with its particular brand, is a consequence of both marketing and product quality. Building and maintaining brand awareness has gradually become one of the most important aspects with awareness strategies and marketing campaigns worldwide. In reaching their target markets, companies will almost certainly consider the evolution in brand awareness parameters, as leading indicators of purchasing decisions and sales motivators.

$ Customer acquisition cost Acquiring new customers has always been a main preoccupation with companies either newly established or fully mature. A reflection of the resources one company must employ in order to convince potential customers to buy its products/services, the $ Customer acquisition cost is one of the most important key performance indicators associated with profitable business environments. An efficient and effective management of customer acquisition costs can ultimately contribute to any company’s decision to further pursue its target market or not.

% On-time delivery For customers to be satisfied it is rather paramount that their products arrive on time. One of the most common key performance indicators associated with operational excellence, % Ontime delivery stands as a valuable expression of both upstream and downstream supply chain performance. Schedule adherence is one of the most important components associated with the timely operation of company intrinsic systems and processes.

# Inventory to sales ratio (ISR) Building inventory is not something that companies agree with, as this typically provides indication of unsatisfactory sales. In order to keep close watch on the ability to manage their inventories, companies traditionally keep close track of their inventory to sales ratios and inventory turnover rates. The popularity of this key performance indicator resides in both its utility and well known customary use.

% Slow moving stock Inventory management ultimately helps retailers identify slow moving stock that unnecessarily takes up warehouse space and increases inventory costs. By closely monitoring how much inventory is slow moving, retailers can reconsider and reevaluate their service level agreements with their wholesalers, therefore moving towards a more efficient process of stocking up on merchandise. As it can negatively impact inventory turnover and profit margins, slow moving stock is a valuable key performance indicator to consider and make use of.


15

% All commodity volume (AVC) distribution

14

# Earned man-hours

13 12 11

With mass consumerism extending its grounds, wholesalers have to be extremely careful with making their products available to their consumers, while also finding the most suited retailers to carry out their items. The % All commodity volume (AVC) distribution ensures that shelves do not stay empty with company brand products and that specific products enjoy a sound distribution among retailers. The key performance indicator owes its popularity to the increased concern for brand visibility and product accessibility.

In the wider context of performance management, productivity is measured against productivity KPIs. In their simplest form, productivity KPIs, such as # Earned man-hours, stand at the basis of both modern and aged performance evaluation systems.

% Cannibalization rate of new product offering New product launches are not without impact. The effect that they have on existing product lines of one company, can either be beneficial or detrimental. Depending on the industry, new product offerings can increase sales of preceding products (e.g. perfume industry). Otherwise, new product launches can lead to the cannibalization of existing products (e.g. technology industry). Fast moving environments, require for this key performance indicator to be frequently monitored according to the specificity of individual markets and industries.

% Employee utilization rate Human resources decisions are based on factual employee data. The employee utilization rate is an effective indicator of whether the organization makes full use of its existing employees. Numbers associated with the % Employee utilization rate usually signal common situations in which existing employees have to be supplemented due to over-utilization of staff or their numbers need to be diminished due to regular under-utilization of current employees.

$ Telecom subscriber acquisition cost The telecommunications industry has lately become quite popular and is currently booming. This makes for competition in this particular industry to be brutal, especially because of the limited number of providers that own the market, as well as, its low penetration rate. Most of the battles active telecom providers carry, is between themselves. It becomes essential that subscriber acquisition costs are closely monitored, in order for the telecom provider to understand the viability of their customer offerings.


Page 35

10

# Units per man hour

9

% Employee turnover

8 7 6 5 Page 36

Labor costs and productivity levels reflect on the performance of general business activity. The measurement of units per man hour is a common practice for most industries, especially construction and manufacturing. Reflecting on the expansion or contraction in production, this KPI is bound to remain one of the most popular key performance indicators in operations management.

As employee satisfaction has become a fundamental concern among human resources practitioners, employee turnover has developed into an essential barometer of staff contentment. Measurement of this key performance indicator is essential in determining hiring costs for budget purposes, training requirements or estimating staff time to recruitment activities.

% Customer retention The customer centric philosophy is a dominant attribute of organizations today. The assessment of customer engagement and satisfaction that come with the measurement of customer retention has become a common practice within organizations in all functional areas and industries nowadays. This key performance indicator is a reflection on how customer advocacy can decrease the costs with customer acquisition.

% Net promoter score The % Net promoter score is used by large companies nowadays as a tool for customer feedback. It gives an unambiguous number that is easy to understand for all employees and useful as input to managers who steer the company. % NPS also gives a good indication of growth potential and customer loyalty for a particular company or product.

# Time to fill a vacant position The time to fill a vacant position has known an increasing trend during the past years, reaching an all-time high in 2014. An increase in labor force and the continuous challenge of candidates meeting job description requirements are believed to be reasons for companies nowadays taking a longer time to hire people. It may be that hiring managers are less willing to invest in training for less experienced workers, but regardless of the basis for the lengthening time to fill a vacant position, this indicator provides a meaningful reflection on the efficiency of the recruitment process all around.

% Realization rate Tracking the realization rate is one of the major focus areas for organizations delivering professional services. In challenging economic times, discounted rates are common practice, however they put further pressure on profit rates. Professional services companies achieving high realization rates usually have a strong company presence on the market and are recognized for their service quality.


4


3


2 1

The employee engagement index has become a prominent tool in assessing the commitment levels of company employees, as the measurement of this indicator impacts turnover rates and leads to superior customer service. Employee engagement levels are a reflection on company efforts to facilitate the development of professional skills, to give employees a sense of trust and integrity and to clarify their opportunities for future career development.

Delivering outputs in a timely manner seems to have become a cornerstone of successful production companies all over the world. Measurement of this indicator reflects on the ability of production to deliver its outcomes according to a contracted plan. The rate of schedule attainment has turned into one of the primal business objectives of production companies, as it is continuously controlled and improved. The indicator is one of the most used reference points in the optimization of today’s production processes.

% Call setup success rate (CSSR) The telecommunications industry continues to operate successfully in today’s competitive environment. The delivery of high quality services while keeping them at an affordable level, is still a major concern among telecom companies. Network operators use this key performance indicator to assess performance of their networks as reflected by customer satisfaction levels with the service provided by the operator.

% Hospital bed occupancy rate Interest in the healthcare industry has maintained its prevalence in this countdown. Improving performance in this sector upholds the matters of service quality and volume, while abiding by government regulatory compliance requirements. The use of this key performance indicator in the healthcare industry preserves its place as the most measures in the overall professional spectrum of the KPI Institute database.

Top 10 KPIs of 2009-2015 by views on smartKPIs.com 8030

4980




4947


4273

3958

# Employee % Realization engagement rate index

3698

3641

3555

3544




% Employee turnover

3539

# Units per man-hour

Page 37

TEMPLATE DESCRIPTION: PAGE 1 KPI 7


2 Functional Areas Marketing & Communications 3 Sub-categories Marketing sK1303 4 KPI Record

Description

1

5 Industries Sub-categories Tags


Calculation

6 Definition

9 Subordinate metrics Measures the net difference between promoters and detractors, of all customers .

7 Variations


8 Related KPIs


Focus


10 Calculation formula

(A/C)*100-(B/C)*100

11 Trend is good when

Increasing

Data Profile

12 Purpose


13 BSC perspective

Customer

14 Objective measured Increase customer advocacy

15 Data capture period

Spot

16 Standard reporting frequency

Monthly

17 Data collection method


18 Limitations

Being based on customer surveys, results can be altered by the respondents’ subjectivity.

Targets 19 Threshold examples

20 Target setting notes







Red: <50%

Yellow: 50-70% Green: >70%

Benchmarking is promoted by Satmetrix, a co-developer of net promoter, benchmark figures being available on their online community.

Analysis and Resources 21 Overall notes 23 References NPS is used nowadays by many large companies as a 1. Bain & Company (2012), Creating a reliable metric, available customer feedback tool. It gives an unambiguous number at: http://www.bain.com/publications/articles/creating-athat is easy to understand for all employees and useful as reliable-metric-loyalty-insights.aspx input for managers to steer the company. 2. Department of Agricultural Leadership, Education and Communications (n.d.), Net Promoter Score, available at: http://agrilife.org/od/evaluation/results-2/net-promoter22 Additional resources score/ ÎÎ http://www.callcentrehelper.com/top-tips-forimproving-netpromoter-scores-nps-42754.htm

Page 38


1

Name:

13

Standard Balanced Scorecard perspective where the KPI fits best.

Name of the KPI, a brief representation of its role. 2

Functional Area: Organizational capability or department that fulfils a specific business function.

3

Sub-categories: Sub-grouping of the industry or functional area.

4

BSC perspective:

14

Objective measured: A sample objective that reflects on the organizational purpose for the KPI being measured.

15

Data capture period: Period for which the results of the KPI have been measured.

KPI Record:

Key performance Indicator (KPI) example unique 16 Standard reporting frequency: identification number assigned automatically when Frequency of reporting performance results for the KPI. entered in the database. 5

Industry:

17

The sources and techniques that support the data gathering process.

Aggregate of organizations operating in a particular field, often named after its principal product or service. 6

Definition:

18

Variation:

19

Other versions of the KPI name used in practice. 8

Related KPIs: List of other related KPIs in the database, either upstream (influenced by this KPI), or downstream (with influence on this KPI).

9

10

11

Subordinate metrics:

Threshold examples: Thresholds outlining the limits for positive and negative results, as well as, the tolerance level.

20 Target

setting notes:

Additional information related to the target setting for this KPI. 21

Overall notes:

General remarks about the use of this KPI. Names of the metrics used in calculating the KPI (if applicable). 22 Additional resources:

Calculation formula:

Other recommended online and offline resources for understanding and using this KPI.

Expresses the mathematical calculation of the KPI by use of subordinate metrics. 23 References:

Trend is good when:

Direction in which the results of the KPI need to progress, for positive outcomes. 12

Limitations: Other limitations (data or reporting system related) to be considered during the use of the KPI.

Succinct description of the KPI, clarifying its name in business terms. 7

Data collection method:

List of resources reviewed as part of the documentation process.

Purpose: Explanation of the reason or business justification for using the KPI.


Page 39

TEMPLATE DESCRIPTION: PAGE 2 Scorecard Outlook 24 Perspective Strategic Objective




Current results

Trend

Target

%Target complete

Results


sK1303

49%



75%

51%



M

51%

Dashboard Outlook 25 KPI Results % Net promoter score


M1

72%

69%

72%

M3

51%

69%

M4

M6

76%

76%

M2

M5

74%

49%

51% 49%

M1

M2

M3

M4

M5

M6

In Practice Recommendations 26 Customer satisfaction is no longer the ultimate goal of companies in their relationship with clients. Going beyond the satisfaction level, the % Net promoter score outlines the percentage of clients who would further recommend the company’s products and services. NPS divides customers into 3 categories: `` “Promoters” – are considered loyal clients that will keep on buying the company’s products and services and will recommend other people to do the same. `` “Passives” – are satisfied clients, but would not further recommend the company’s products and services. “Passives” can easily be convinced by similar products and services on the market.

Page 40

`` “Detractors” – are unsatisfied customers, who most certainly would not further recommend the company’s products and services. The KPI is measured by subtracting the percentage of detractors from the percentage of promoters. A survey consisting in one question - “How likely is it that you would recommend us to a friend?” – is used to capture the data. One of the challenges in measuring this KPI is to distinguish between the customer’s satisfaction with one service, like Customer Care and his loyalty to the company, or brand. This is why companies additionally use bottomup and top-down surveys, for further inquiries that help generate a more precise diagnostic.


The novelty of the Top 20 KPI Reports – 2016 Edition is the second page of the documentation form which was specifically developed to take the reader one step closer to an efficient KPI monitoring and reporting process. The second page of the KPI documentation form is structured to befit the reporting requirements of any KPI. It is comprised of 4 sections which are intended to provide guidance on KPI reporting, as well as, enhance the empirical use of KPIs in day to day life: 24 Scorecard

Outlook:

Positions the KPI within a Scorecard template that: 1. Illustrates the perspective of the Balanced Scorecard to which the KPIs should be assigned; 2. Accommodates a sample objective that best summarizes the purpose of reporting on the KPI; 3. Identifies the indicator as presented in the KPI Documentation form template; 4. Specifies the KPI Record number used to accurately identify the KPI in the system; 5. Mentions the standard reporting frequency as recommended for best use; 6. Reveals previous period and current results as reported on by the data custodian; 7. Emphasizes the KPI trend as illustrated by the comparison between previous and current results; 8. Mentions a sample KPI target as represented by the desired results which are expected to be achieved; 9. Illustrates target achievement by comparing current results with the target level. 25 Dashboard

26 In

Practice Recommendations:

For best KPI use, analysis and interpretation, the in practice recommendations assist the reader with positioning the KPI in the real life context from whence it was harvested. The second page of the KPI documentation form was especially designed by the KPI Institute to accommodate snapshots of the core performance management tools, practitioners and professionals use in their day to day operations. The KPI results illustrated and the outlooks depicted do not constitute reference for any performance management practice, and are not meant to provide a universal standard for reporting on KPIs. The results and the outlooks presented can be regarded as a possible approach to consider when reporting on KPIs. They can be further used as a platform by organizations who want to proceed in their development of personalized performance management tools. Such tools provide assistance with monitoring and reporting on performance, and it is essentials that they are properly configured. The second page of the KPI documentation form helps readers visualize the KPI as reported on by the performance management tools already in use today.

Outlook:

Recommended data visualization models that best help identify current values, historical values and KPI trends.


Page 41

KPI 1


Functional Areas N/A Sub-categories N/A KPI Record sK41


Description

Calculation

Definition

Measures the percentage of beds in the hospital that are occupied by patients, from overall number of hospital beds.

Subordinate metrics

A = # Hospital beds occupied B = # Hospital beds

Variations

% Long-term patients bed occupancy rate % Short-term patients bed occupancy rate

Calculation formula

(A/B)*100

Trend is good when

Within range

Related KPIs

% Alternate level of care days (ALC) $ Hospital operating profit per bed # Hospital admission rate per 10,000 inhabitants % Time that hospital beds are occupied

Focus Purpose

To indicate the hospital’s efficiency regarding bed management and its spare capacity.

BSC perspective

Internal Processes

Healthcare Hospitals hospital, occupancy


Spot


Daily


Inpatient records of admission and discharge

Limitations

Accurate reporting for this KPI requires real-time registration of inpatients, so that no lag exists between the actual hospitalization (and the occupancy of the bed), and registering it in the bed management system.

Objective measured Optimize hospital capacity

Targets Threshold examples








Red: <70%; >95% Yellow: 70-85%; Green: 85-90% 90-95%

Given the universality of the measure, it suits benchmarking very well. High levels of bed occupancy reflect the ability of a hospital to provide safe patient care and indicate an efficient use of a hospital’s capacity.

Analysis and Resources Overall notes Bed occupancy rate is used to assess the demands for hospital beds and hence, to gauge an appropriate balance between demand for health care and number of beds available. Managing the bed occupancy rate can be a difficult task due to the demand that cannot be controlled by postponing (like in the case of a guest house, for example).

Page 42

Additional resources ÎÎ http://news.bbc.co.uk/2/hi/health/5370336.stm ÎÎ h t t p : // w w w . n s c b . g o v . p h / g l o s s a r y / t e r m s / indicatorDetails.asp?strIndi=134


References 1. Adeyi, O., Smith, O. and Robles, S. (2007), Public policy and the challenge of chronic noncommunicable diseases, The World Bank, available at: http://siteresources.worldbank.org/INTPH/Resources/PublicPolicyandNCDsWorldBank2007FullReport.pdf 2. Health Policy Research Associates and Institute for Health Policy (2007), Performance reviews of provincial and line Ministry Healthcare Services, available at: http://203.94.76.60/AHF/pdf/CD03/Assesment_Overall_Perfor_bw_Districts02_35-54.pdf 3. Republic of the Philippines, Department of Health (2004), Other health facilities statistical report, available at: http:// www.formsphilippines.com/forms/doh11.pdf


Internal Processes Optimize hospital capacity



Current results

Trend

Target

%Target complete

Results


sK41

89%



90%

98%



D

86%

Dashboard Outlook KPI Results % Hospital bed occupancy rate

% Hospital bed occupancy rate 87%

D1 D2

86%

D3

86%

86%

86%

D2

D3

86%

88%

D4 D5

87%

89%

88%

86%

D6

89%

D1

D4

D5

D6

In Practice Recommendations However difficult to address, % Hospital bed occupancy rates are regarded as indicators of proper tending to hospital environments that are meant to secure care in an efficient manner. High bed occupancy rates in the healthcare industry have shown greater patient exposure to risk of infection, and have been proved hazardous to handle. On the other hand, low % Hospital bed occupancy rates provide indication of poor hospital management for the benefit of the population in need of medical care. % Hospital bed occupancy rates are an undeniably useful KPI in assessing a medical unit’s ability to provide high-quality patient care. However, a safe and effective hospital has to ensure that no hospital beds are underutilized, and enough hospital beds are made available for Top 20 KPIs - 2016 Edition

cases of utmost emergencies. Some recommendations in finding the most appropriate level for the % Hospital bed occupancy rate include: `` Mapping events that generate high and low hospital bed occupancy rates; `` Developing contingency plans for demanding medical urgencies; `` Monitoring and adjusting the provisions of general health services; `` Maintaining control over consultation times, admission rates and length of stay; `` Requiring regular feedback on waiting lists and patient back-logs. Page 43

KPI 2




Description

Calculation

Definition

Subordinate metrics

A = # Successful call attempts B = # Call attempts

Calculation formula

(A/B)*100

Trend is good when

Increasing

Measures the percentage of call attempts that result in a connection to the dialed number, out of the total number of call attempts.

Variations

% Successful call attempts % Ratio of successful call set-ups

Related KPIs

% Successful backward call setup signal % Calls blocked by network management controls % Calls not routed due to internal congestion % Speech clipping ratio % Paging success rate % Random access success rate % Traffic channel (TCH) assignment success rate

Focus

Telecommunications / Call Center Telecommunications call setup


Day


Monthly

Purpose

To assess the service accessibility of the telecommunication network.


Call Management System, Dynamics

BSC perspective

Internal Processes

Limitations

Accurate data gathering requires sound call management systems to monitor call attempts made by all agents.

Objective measured Increase operational efficiency









Red: <95%


Low levels of call set-up success can be due to telecommunication lines issues caused by lack of radio coverage, radio interferences between subscribers or limited capacity of the network.

Analysis and Resources Overall notes This KPI reflects the accessibility of the telecommunications services used. A call attempt is considered to be successful even when the dialed number is recorded as busy.

Page 44

Additional resources ÎÎ http://news.bbc.co.uk/2/hi/health/5370336.stm ÎÎ http://www.iaeng.org/publication/WCECS2009/ WCECS2009_pp393-398.pdf


References 1. Das, S. K., Lee, E., Basu, K., Kakani, N. and Sen, S. K. (2002), Performance optimization of VoIP calls over wireless links using H.323 protocol, available at: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.16.9164&rep=rep1&type=pdf 2. Kho, W., Baset, S. A. and Schulzrinne, H. (2006), Skype relay calls: Measurements and experiments, available at: http://www1. cs.columbia.edu/~salman/publications/skyperelay-gi08.pdf 3. Kollar, M. (2008), Evaluation of real call set up success rate in GSM, available at: http://aei.tuke.sk/papers/2008/3/10_Kollar. pdf


Internal Processes Increase operational efficiency



Current results

Trend

Target

%Target complete

Results

% Call setup success rate

sK865

98%



100%

98%



M

96%

Dashboard Outlook KPI Results % Call setup success rate M1

% Call setup success rate

98%

91%

M2

94%

M3

94%

M4 M5

94%

94%

M2

M3

95%

96%

91%

95% 96%

M6

98%

M1

M4

M5

M6

In Practice Recommendations The % Call setup success rate is one of the most important Key Performance Indicators used by both land line and mobile operators to assess the reliability of their communications infrastructure. The ultimate goal of telecommunications network operators worldwide is to increase the % Call setup success rate, to the extent to which calls can be set up without failures. The % Call setup success rate is particularly popular with mobile operators, who have to deal with the various constraints of coverage and network functionalities to ensure target achievement for this KPI. Maximum values for the % Call


setup success rate have been recorded with conventional land-line operators, who have succeeded to top reliability in the telecommunications industry. Some of the critical factors to take into consideration for % Call setup success rate improvement include: `` `` `` `` ``

Up to date software; Service accessibility; Traffic measurement; Radio coverage signal; Future network planning.

Page 45

KPI 3


Functional Areas Production & Quality Management Sub-categories Production KPI Record sK1744


Description

Calculation

Definition

Measures how much of the production schedule is actually achieved.

Subordinate metrics

Variations

% Schedule attainment in production

A = # Actual production B = # Scheduled production C = # Actual production time D = # Scheduled production time

Related KPIs

% Production delays due to raw material shortage

Calculation formula

[(A/B)*(D/C)]*100

Trend is good when

Increasing

Any Any production plan tracking

Data Profile

Focus Purpose

To evaluate the production schedule attainment and accuracy.

BSC perspective

Internal Processes

Objective measured Ensure timeliness of production output

Data capture period

Week


Monthly


Production plan

Limitations

Difficulties can occur if no clear production schedule is developed and tracked.









Red: <70%


Targets should be set taking into consideration the risks and other unplanned situations that can occur during the production process, that can influence either the duration or the volume of production (e.g. unplanned maintenance). A high level of this indicator shows rigorousness and effectiveness in attaining the production volume and duration.

Analysis and Resources Overall notes Monitoring this KPI supports improvement in production planning and schedule attainment. Production changes should be monitored and documented for root cause analysis, understanding accuracy and developing a plan for improvements.

Page 46

Additional resources ÎÎ h t t p : // w w w . g l o v i a . c o m / p d f / d a t a s h e e t s / GloviaMasterProductionScheduling.pdf


References 1. Handfield, R. (2006), Supply Market Intelligence: A managerial handbook for building sourcing strategies, available at: https:// www.crcpress.com/Supply-Market-Intelligence-A-Managerial-Handbook-for-Building-Sourcing/Handfield/9780203339527 2. Herrmann, J. W. (2007), The legacy of Taylor, Gantt and Johnson: How to improve production scheduling, The Institute for Systems Research, available at: http://drum.lib.umd.edu/bitstream/1903/7488/4/25813_cov.pdf 3. Salman, M. R., van der Krogt, R., Little, J. and Geraghty, J. (n.d.), Applying Lean principles to production scheduling, available at: http://www.academia.edu/874530/Applying_Lean_Principles_to_Production_Scheduling


Internal Processes Ensure timeliness of production output



Current results

Trend

Target

%Target complete

Results


sK1744

69%



95%

72%



M

72%

Dashboard Outlook KPI Results % Production schedule attainment

% Production schedule attainment 92%

M1

M6

81% 75%

81%

M3

M5

86%

86%

M2

M4

92%

72%

69%

75% 72% 69%

M1

M2

M3

M4

M5

M6

In Practice Recommendations Mastering production schedule is one of the fundamental requirements in enterprise resource planning (ERP). Consequently, the monitoring of % Production schedule attainment assists with driving performance and improvement to inbound scheduling processes. Some of the reasons for incorporating this KPI into the measurement process of companies within the production industries, can be formulated as follows:


`` Different product lines have separate schedules for attainment; `` Production schedule attainment must be secured for on-time delivery of products; `` If all production schedules are met, the overall performance plan is met; `` Any production lines that do not meet their schedule are bound to miss their delivery; `` Missed deliveries negatively impact relationships with suppliers.

Page 47

KPI 4


Functional Areas Human Resources Sub-categories Retention KPI Record sK1836


Description

Calculation

Definition

Measures the engagement level of employees in their work activities and responsibilities, in terms of enthusiasm, commitment and discretionary effort.

Subordinate metrics

Variations

# Employee engagement

Related KPIs

# Intimidation, hazing, bullying or retaliation complaints received % Adherence to values and mission

A = # Employee engagement Surveys assessing employee engagement are usually tailored to each organization. They use structured questioning to assess employee discretionary effort and whether they find their work stimulating.

Calculation formula

A, based on survey

Trend is good when

Increasing

Any Any engagement

Data Profile

Focus Purpose

To indicate the level of engagement and commitment of employees, as this impacts turnover rates and leads to superior customer service.

BSC perspective

Learning & Growth

Data capture period

Spot


Quarterly


Employee engagement surveys, employee satisfaction surveys, employee appraisals, internal assessments

Limitations

The accuracy of data can be limited by respondents’ subjectivity, as the calculation of this indicator is based on survey results.

Objective measured Increase employee engagement









Red: <75

Yellow: 75-95

Green: >95

The threshold example is expressed in points (100 maximum), and has just an exemplification purpose. Organizations develop various scales to measure employee engagement. Targets can vary from one industry to another, depending on the employees’ profile.

Analysis and Resources Overall notes There are studies that suggest employee engagement can be driven by various company efforts, such as facilitating the development of skills for the employees, giving them a sense of trust and integrity and clarifying their opportunities for future career development. Page 48

Additional resources ÎÎ http://www.performancemagazine.org/employeeengagement-index/ ÎÎ http://www.performancemagazine.org/employeeengagement-at-western-union-malaysia%E2%80%93-a-case-study/ www.kpiinstitute.org

References 1. Crabtree, S. (2004), Getting personal in the workplace, The Gallup Management Journal, available at: http://govleaders.org/ gallup_article_getting_personal.htm 2. Kenexa (2013), The many contexts of employee engagement, available at: http://www.kenexa.com/Portals/0/Downloads/ KHPI%20Papers/The%20Many%20Contexts%20of%20Employee%20Engagement-2012%20WT%20Report_CS6.pdf 3. Heymann, J. (2010), Profit at the bottom of the ladder: Creating value by investing in your workforce, available at: http://www. amazon.com/gp/search?index=books&linkCode=qs&keywords=9781422123119


Learning and Growth Increase employee engagement



Current results

Trend

Target

%Target complete

Results


sK1836

98



98

98%



Q

97

Dashboard Outlook KPI Results # Employee engagement index Q1

# Employee engagement index 98

96

Q2 Q3 Q4

98

96

97

98

97 98

Q1

Q2

Q3

Q4

In Practice Recommendations Employee engagement is a very popular concept nowadays. With severe competition on most markets, human capital stands out as an important competitive advantage. Employee engagement has three dimensions: the cognitive, the emotional and the behavioral one. The cognitive aspect refers to the employees’ beliefs about the organization and working conditions. The emotional dimension covers how employees feel about the organization. Employee behaviors deal with the value-added and discretionary effort they bring to work in the form of extra time, brainpower and task-oriented energy. Studies have proved that engaged employees perform better than modestly engaged employees, favorably impacting customer satisfaction, profitability and employee turnover. Some compelling advice on Top 20 KPIs - 2016 Edition

enhancing and stimulating employee engagement can easily be taken into consideration: `` Empowering employees to make individual decisions to the highest level of influence pushed down on them; `` Providing the employee with the necessary resources that enable them to perform their best at their work station; `` Enhancing knowledge through regular coaching and training sessions; `` Developing innovative rewards and recognition programs that keeps employees competitive about their work; `` Continuously measure and monitor the # Employee engagement index within the organization. Page 49

KPI 5

% Realization rate



Description

Calculation

Definition

Measures the percentage of revenue actually earned relative to the potential revenue represented by list prices.

Subordinate metrics

A = $ Revenue actually earned B = $ Potential revenue represented by list prices

Variations

% Revenue realization rate

Calculation formula

(A/B)*100

Related KPIs

$ Bill rate

Trend is good when

Increasing

Professional Services Engineering Recruitment / Employment Activities Legal Practice Business Consulting Accounting Services revenue

Data Profile

Focus Purpose

To indicate the company’s ability to bill at its list prices, as clients usually tend to negotiate for price reductions.

BSC perspective

Financial

Objective measured Achieve business excellence

Data capture period

Month


Monthly


Financial statements

Limitations

Accurate reporting for this KPI is dependent on a well maintained register of the pricing list and billing rates applied.









Red: <70%


A high realization rate indicates a strong competitive position in the market, usually based on the premium quality of services. Despite the benchmarking suitability, data regarding realization rates for companies are rarely available to the public.

Analysis and Resources Overall notes Lower levels of results achieved for this KPI are due not only to discount prices, but oftentimes to bad-paying customers, that do not pay the entire bill value. It can be applied at organizational level, by calculating an average billing realization rate, including operational and individual level.

Page 50

Additional resources ÎÎ http://www.performancemagazine.org/performancemeasurement-in-the-business-consulting-industrymeasures-and-more/


References 1. Greene, A. G. (2009), The lawyer’s guide to governing your firm. Chicago: American Bar Association, available at: http://shop. americanbar.org/eBus/Store/ProductDetails.aspx?productId=214193 2. Poll, E. (n.d), How to benchmark your law firm’s financial performance, available at: https://www.cba.org/Publications-Resources/ CBA-Practice-Link/solo/2014/How-to-Benchmark-Your-Law-Firm%E2%80%99s-Financial-Perform 3. Hinterhuber, A. and Liozu, S. (2012), The transformation to strong price-orientation and price-realization capabilities, MIT Sloan Management review, 53(4): 75-77, available at: http://www.mitsmr-ezine.com/mitsmr/summer2012?pg=77#pg77


Financial Achieve business excellence



Current results

Trend

Target

%Target complete

Results

% Realization rate

sK321

83%



90%

92%



M

78%

Dashboard Outlook KPI Results % Realization rate M1 M2

% Realization rate 83%

68% 78%

71%

M3 M4 M5

74%

74%

75%

71% 68%

75% 78%

M6

83%

M1

M2

M3

M4

M5

M6

In Practice Recommendations Especially popular with legal companies, % Realization rates are an expression of a company’s ability to bill at its standard billing rates. The difference between % Realization rate and $ Profitability is that the latter encompasses the first, while also dealing with other additional variables such as: leverage, margin and resource utilization. A business in the need for efficient management will look at its % Realization rate to understand what it is actually earning. The data, further enables the company to both calculate appropriate billing,


and prepare its annual budget. Increasing % Realization rates helps companies maximize their profits, and several ways to do that are recommended hereon: `` Managing discounts and other price deductions to improve billing realization; `` Optimizing collections so as to ensure bottom line profitability; `` Streamlining billing and cash collection processes.

Page 51

KPI 6


Functional Areas Human Resources Sub-categories Recruitment KPI Record sK688


Description

Calculation

Definition

Measures the average number of days between the moment when a job requisition is raised to when a new employee fills the role.

Subordinate metrics

Ai = # Time to fill position ‘i’, where i=1 to n n = # Positions filled

Variations

# Time to hire

Calculation formula

(A1+A2+...+An)/n

Related KPIs

# Employment brand strength

Trend is good when

Decreasing

Focus

Professional Services Recruitment / Employment Activities time, vacant positions

Data Profile

Purpose

To indicate the efficiency of the recruitment process.

BSC perspective

Internal Processes

Objective measured Optimize recruitment processes

Data capture period

Rolling average


Monthly


HR data records

Limitations

Measurement requires data from all recruitment projects, across all teams and sections, which can make the collection process difficult to automate.









Red: >60

Yellow: 40-60

Green: <40

Thresholds given have just an exemplification purpose. Targets are very useful for recruitment managers to establish expectations based on a reasonable level of service. However, the lower the level, the better, as it might affect the organization’s productivity.

Analysis and Resources Overall notes It can be used by both Human Resources departments and recruitment agencies. For HR departments, # Recruitment lag time can be another relevant KPI, that measures the time it takes to actually replace an employee. Additional resources ÎÎ http://www.ere.net/2004/07/27/understanding-timeto-hire-metrics-can-time-to-fill-be-too-low/

Page 52

References 1. Parmesh, M. (n.d.), The need for new recruitment strategies, available at: https://www.onepetro.org/journal-paper/SPE0202-21-TT 2. United States Office of Personnel Management (2009), Workforce reshaping operations handbook, available at: https://www.opm.gov/policy-data-oversight/workforcerestructuring/reductions-in-force/workforce_reshaping.pdf


3. Department of Personnel (2006), Washington State Human Resource Management Report, available at: http:// www.hr.wa.gov/SiteCollectionDocuments/Strategic%20HR/HRM%20Performance%20and%20accountability/ GMAPStatewideHRMgmtReport406.pdf


Internal Processes Optimize recruitment processes



Current results

Trend

Target

%Target complete

Results


sK688

35



40

114%



M

39

Dashboard Outlook KPI Results # Time to fill a vacant position

# Time to fill a vacant position 52

M1

46

46

M2

48 43 39

48

M3

35

43

M4

39

M5 M6

52

35

M1

M2

M3

M4

M5

M6

In Practice Recommendations Considered to be a leading indicator for $ Cost of hire, # Time to fill a vacant position can also be an important tracker of jobs that are most challenging to fill. The data provided by this indicator may encourage the development of initiatives to tackle existent recruitment challenges. The KPI is reviewed separately for frontline and management/advisory/administrative/ technical positions, because of its different impacts on recruitment costs and operational efficiency. Vacant frontline positions that are open for a long period of time can be the cause for remaining operators not meeting their schedule and load targets. Recruitment costs with management positions are higher, while specific technical and managerial skills make it difficult for the recruitment process to be unsophisticated. Some recommended


advice on overcoming the challenges associated with filling a vacant position include: `` Developing manpower that can be both responsive and flexible with complex challenges and pressures within various working environments; `` Recruiting advanced skills to undergo technological changes within industries that are continuously adapting to new market conditions; `` Continuously supporting the younger generation to acquire the desired skills set in order to meet specific job requirements; `` Providing clear, professional paths and opportunities for advancement; `` Building a reliable set of succession plans to fill critical positions in the organization.

Page 53

KPI 7




Description

Calculation

Definition

Subordinate metrics


Calculation formula

(A/C)*100-(B/C)*100

Trend is good when

Increasing

Measures the net difference between promoters and detractors, of all customers that express an attitude. Note: Net Promoter, Net Promoter Score and NPS are registered trademarks of Fred Reichheld, Bain & Company and Satmetrix.

Variations


Related KPIs


Focus Purpose


BSC perspective



Spot


Monthly



Limitations

Being based on customer surveys, results can be altered by the respondents’ subjectivity or incentives given by the company to stimulate responses.

Customer

Objective measured Increase customer advocacy









Red: <50%


Benchmarking is promoted by Satmetrix, a co-developer of net promoter, benchmark figures being available on their online community: http://www.netpromoter.com/ netpromoter_community/community/npsbenchmarks?vie w=tags&tags=benchmark

Analysis and Resources Overall notes NPS is used nowadays by many large companies as a customer feedback tool. It gives an unambiguous number that is easy to understand for all employees and useful as input for managers to steer the company. NPS also gives a good indication of growth potential and customer loyalty for a company or product. To understand the motives of Promoters and Detractors, it is recommended to accompany the NPS question by one or more open questions that probe the underlying reasons behind the given score. This allows Page 54

managers to make the appropriate adjustments to increase the future NPS, either by boosting the percentage of Promoters, either by reducing the proportion of Detractors (or better yet, a combination of both). Additional resources ÎÎ http://www.callcentrehelper.com/top-tips-forimproving-netpromoter-scores-nps-42754.htm ÎÎ http://blogs.hbr.org/2011/05/how-philips-uses-netpromoter/ www.kpiinstitute.org

References 1. Bain & Company (2012), Creating a reliable metric, available at: http://www.bain.com/publications/articles/creating-a-reliablemetric-loyalty-insights.aspx 2. Prince, L. (2015), The NET Promoter Score in Action, available at: http://www.ihrsa.org/blog/2015/4/13/the-net-promoterscore-in-action.html 3. Qualtrics Labs (2012), Net Promoter Score (NPS) explained, available at: https://www.qualtrics.com/research-suite/netpromoter-score/





Current results

Trend

Target

%Target complete

Results


sK1303

49%



75%

51%



M

51%

Dashboard Outlook KPI Results % Net promoter score


M1

72%

69%

72%

M3

51%

69%

M4

M6

76%

76%

M2

M5

74%

49%

51% 49%

M1

M2

M3

M4

M5

M6

In Practice Recommendations Customer satisfaction is no longer the ultimate goal of companies in their relationship with clients. Going beyond the satisfaction level, the % Net promoter score outlines the percentage of clients who would further recommend the company’s products and services. NPS divides customers into 3 categories: `` “Promoters” – are considered loyal clients that will keep on buying the company’s products and services and will recommend other people to do the same. `` “Passives” – are satisfied clients, but would not further recommend the company’s products and services. “Passives” can easily be convinced by similar products and services on the market.


`` “Detractors” – are unsatisfied customers, who most certainly would not further recommend the company’s products and services. The KPI is measured by subtracting the percentage of detractors from the percentage of promoters. A survey consisting in one question - “How likely is it that you would recommend us to a friend?” – is used to capture the data. One of the challenges in measuring this KPI is to distinguish between the customer’s satisfaction with one service, like Customer Care and his loyalty to the company, or brand. This is why companies additionally use bottomup and top-down surveys, for further inquiries that help generate a more precise diagnostic.

Page 55

KPI 8




Description

Calculation

Definition

Measures the organization’s ability to create repeat business among its customer base.

Subordinate metrics

Variations

% Customers retained

Related KPIs

# Dealer satisfaction survey % Customers satisfied with the time to be served % Drop rate of web-based course % Libraries open 6 days per week # Time spent with customers understanding their needs % Distributor retention

A = # Customers at the end of the reporting period B = # New customers acquired during the reporting period C = # Customers at the begining of the reporting period Alternatively, you can use the following subordinated measure: E = % Desertion rate

Calculation formula

[(A-B)/C]*100 Alternatively, you can use the following formula: 100% - E

Trend is good when

Increasing

Focus

Any Any satisfaction

Data Profile

Purpose

To assess the level of customer satisfaction with the company, as unsatisfied customers are likely to switch to competitors.

BSC perspective

Customer

Objective measured Increase customer loyalty

Data capture period

Quarter


Quarterly


Customer database reports

Limitations

The accuracy of measurement is limited by the difficulty to distinguish between actually lost customers and retained customers, but dormant.









Red: <50%


Useful resources in benchmarking customer retention can be the American Customer Satisfaction Index (ACSI) and J.D. Power and Associates.

Analysis and Resources Overall notes Maintaining a high level of customer retention is important, as far as costs are concerned, because it is less expensive to maintain existing customers than constantly advertising for new ones. High retention indicates either Page 56

that customer satisfaction is high or that the customer options in the marketplace are limited.


Additional resources ÎÎ http://ir.csuc.edu.gh:8080/xmlui/bitstream/handle/123456789/63/CUSTOMER%20RETENTION.pdf?sequence=1 References 1. Waterfield, C. (2006), The challenges of measuring client retention, The SEEP Network, available at: http://files.givewell.org/ files/MFI/The%20Challenges%20of%20Measuring%20Client%20Retention.pdf 2. SAS (2009), How can we improve customer retention rates and increase premium income?, available at: http://www.sas.com/ offices/europe/uk/industries/insurance/pdf/customer-retention.pdf 3. Fader, P. S. and Hardie, B. G. S. (2007), How to project customer retention, available at: https://marketing.wharton.upenn.edu/ files/?whdmsaction=public:main.file&fileID=327


Customer Increase customer loyalty



Current results

Trend

Target

%Target complete

Results


sK3

67%



80%

83%



Q

61%

Dashboard Outlook KPI Results % Customer retention

% Customer retention 63%

Q1 Q2 Q3

63%

67%

65% 61%

65% 61%

Q4

67%

Q1

Q2

Q3

Q4

In Practice Recommendations Unsatisfied clients negatively impact the business on both short term and in the long run. Negative customer experiences make it more difficult to attract new customers. In almost all known circumstances, gaining a new customer is substantially more expensive than maintaining current clients. Moreover, the probability of selling to existing customers is significantly higher than the possibility of selling to potential prospects. Several recommendations on developing a sound customer retention strategy include:


`` Outstanding delivery of service to existing customers; `` Maintaining customer dynamics through interactive communication programs; `` Mapping customer experiences and lifecycle; `` Dedicated customer engagement capabilities; `` Developing loyalty and reward programs for repeat customers.

Page 57

KPI 9

% Employee turnover

Functional Areas Human Resources Sub-categories Retention KPI Record sK1


Description

Calculation

Definition

Measures the rate at which employees leave the organization in a given time period (e.g. month, quarter, year).

Subordinate metrics

Variations

% Separation rate % Employees that leave the organization in a given time period

A = # Employees that left the organization by the end of the reporting period B = # Employees of the organization at the beginning of the reporting period

Related KPIs

# Net hire ratio # Employee engagement index # Employee perceptions of external job opportunities index % Employees per department

Calculation formula

(A/B)*100

Trend is good when

Within range

Focus Purpose

To indicate the level of employee satisfaction with the organization, as an unhappy employee is more likely to leave the organization.

BSC perspective

Learning & Growth

Any Any employees, loyalty, retention, turnover


Quarter


Quarterly


HR data records

Limitations

Difficult to obtain accurate figures if the HR systems are not enabled to timely capture the data for this KPI.

Objective measured Increase employee retention









Red: <5%; >30%

Yellow: 5-10%; 20-30%

Green: 10-20%

Targets may vary based on the industry profile and the workforce trends on the market. A high turnover rate has a negative impact on business, due to the loss of knowledge, the cost of replacing employees and the duration of the replacement process. The positive impact of employee fluctuation is the influx of new ideas, capabilities and energy of the new employees.

Analysis and Resources Overall notes This measure may be influenced by the HR department performance, the working environment and work policies, the supervisor and team, as well as the promotion and professional development opportunities for the future. An exit interview is a frequently used procedure that is applied by HR specialists in order to assess and avoid the Page 58

causes that determine a high employee turnover rate. Additional resources ÎÎ http://www.acas.org.uk/media/pdf/i/o/Managing_ attendance_employee_turnover_(Oct_11)-accessibleversi... ÎÎ http://www.nobscot.com/survey/surveyresults.cfm?id=2


References 1. International Public Management Association for Human Resources (2010), HR metrics benchmarking committee report, available at: http://www.ipma-hr.org/sites/default/files/finalbenchreport.pdf 2. CPS Human Resources Services (2006), The turnover tool kit: A guide to understanding and reducing employee turnover, available at: http://www.cpshr.us/workforceplanning/documents/ToolKitTurnover.pdf 3. Jacobs, E. (2012), Executive briefing: Tracking trends in employee turnover, available at: http://www.shrm.org/research/ benchmarks/documents/trends%20in%20turnover_final.pdf


Learning and Growth Increase employee retention



Current results

Trend

Target

%Target complete

Results

% Employee turnover

sK1

14%



15%

93%



Q

12%

Dashboard Outlook KPI Results % Employee turnover Q1

% Employee turnover 14%

8%

Q2

12%

Q3

12%

Q4

12%

12%

Q2

Q3

8%

14%

Q1

Q4

In Practice Recommendations Company-wise, % Employee turnover, however debatable, is also, expensive. Frequently overlooked, the lost productivity cost, the cost associated with loss of sales and the lost reputation cost, are often, unforeseen consequences of low retention rates. Experts argue that some of the negative impacts of high employee turnover rates can also include: routine disruption, direct turnover costs (recruitment and training) and demoralization of former colleagues, who now have to deal with losing an esteemed colleague or, otherwise, increased workload following the loss. On the other hand, it is believed that high turnover rates are something to profit from. New employees can inspire with their fresh attitudes, can be highly motivated and can turn into real brand energizers for the hiring company. All things


considered, % Employee turnover is a matter of multiple factors and many contrasting events: `` Different companies in different industries either work with high turnover or low turnover; high turnover rates are not always an indicator of loss, just as much as, low turnover rates are not an indicator of gain; `` Companies with unstandardized task processes may suffer more from increased turnover, having that staff members who perform their tasks in their own unique way - and that way benefits the company - can be very hard to replace; `` High process conformance companies may suffer little from high turnover rates, as knowledge associated with standardized processes, can be more easily transferred to new employees. Page 59

KPI 10 # Units per man-hour Functional Areas Production & Quality Management Sub-categories Production KPI Record sK443


Description

Calculation

Definition

Subordinate metrics

A = # Production units B = # Man-hours

Calculation formula

A/B

Trend is good when

Increasing

Variations

Measures the number of completed units realized per hour of work. A manhour is the amount of work done by one person in one hour. # Units/MH # Pieces per labor hour

Any Any man-hour, productivity

Related KPIs

Focus

Data Profile

Purpose

To assess labour productivity in terms of outputs per man-hour.

BSC perspective

Internal Processes

Objective measured Increase labour productivity

Data capture period

Day


Monthly


SAP, production planning and monitoring system

Limitations

Accurate reporting for this KPI is dependent on a well maintained system for tracking production outputs per man-hours.









Red: <15

Yellow: 15-20

Green: >20

Targets may vary based on the industry. In some industries, man-hour estimates are based on the type of project and experience from similar projects.

Analysis and Resources Overall notes Along with the volume of units, the units/MH represent an important reporting method used in the construction and manufacturing industry. This KPI can be influenced by factors unrelated to the labor force, such as equipment downtime, which can decrease man-hour productivity. Additional resources ÎÎ http://www.jstor.org/pss/4225514

Page 60

References 1. Cox, R., Issa, R. and Ahrens, D. (2003), Management’s perception of key performance indicators for construction. Journal of Construction Engineering and Management, 129(2): 142-151, available at: http://ascelibrary.org/doi/abs/10.1061/%28AS CE%290733-9364%282003%29129:2%28142%29 2. United States Department of Agriculture (n.d.), Output per man-hour in factories processing farm food products, Technical Bulletin Number 1243, available at: http://naldc. nal.usda.gov/download/CAT87201186/PDF


3. Murthy, P. R. (2005), Production and operations Management. New Delhi: New Age International Publishers, available at:http://www.amazon.com/Production-Operations-Management-Rama-Murthy/dp/812241558X/


Internal Processes Increase labour productivity



Current results

Trend

Target

%Target complete

Results


sK443

14%



25%

56%



M

14%

Dashboard Outlook KPI Results # Units per man hour


9%

14%

8%

8%

M4

12%

11%

11%

M2 M3

14%

9%

M1

12%

M5

14%

M6

14%

M1

M2

M3

M4

M5

M6

In Practice Recommendations Commonly defined as output per unit of input, labor productivity can be otherwise regarded as the genuine forefather of employee performance. In their simplest form, productivity KPIs, such as # Units per man-hour, stand at the basis of both modern and outmoded performance evaluation systems. In the context of performance management, productivity KPIs are just a minute part of an integrated performance management system that values, nurtures and enhances employee performance. Mostly associated with industries such as construction and manufacturing, # Units per man-hour owes its popularity to the ease of its use, uncomplicated calculation and explicit manner in which it manages to translate effort into results. Some advice to consider when working with productivity KPIs:


`` Productivity KPIs alone can drive excessive investment in automation; `` Depreciation cost and equipment downtime are two of the side-effects of automating labor productivity KPIs; `` High values of # Units per man-hour are not always a sign of improvement; `` Setting targets for this KPI should consider the direct effect it has on human labor; `` High demands of # Units per man-hour can have several significant consequences such as: equipment downtime, high maintenance costs, faster depreciation, operator overtime and increased labor expense.

Page 61

KPI 11

% Brand awareness



Description

Calculation

Definition

Measures the rate at which target customers recognize and recall the brand.

Subordinate metrics

A = # Target customers that recognize the brand B = # Target customer

Variations

% Brand recognition

Calculation formula

(A/B)*100

Related KPIs

Trend is good when

Increasing

Focus

Data Profile

Purpose

To track the familiarity of the target customers with the brand.

BSC perspective

Customer

Objective measured Raise brand awareness

Any Any brand, awareness

Data capture period

Quarter


Quarterly


Brand awareness surveys

Limitations

Data collection requires extensive brand awareness surveys among target consumers, which can be costly and affected by the respondents’ subjectivity. Also, the KPI indicates the percentage of target customers recalling the brand only, not reflecting how many of them prefer the brand to other brands they recall.









Red: <50%


Targets can vary depending on whether the purpose is to measure unaided awareness (when the respondents are asked to name brands within a product category), or aided awareness (when they are shown a list of brands and express familiarity with the brand, only after hearing or seeing it).

Analysis and Resources Overall notes Brand awareness consists of both brand recognition (the ability of consumers to confirm that they have previously been exposed to the brand), and brand recall (the ability of consumers to name the brand when given the product category). Page 62

Additional resources ÎÎ http://www.websurveymaster.com/t/50/N ÎÎ h t t p : // w w w d o c s . fce . u n s w. e d u . a u /m a r ke t i n g / amj_12_3_romaniuk_et_al.pdf


References 1. Clark, C. R., Doraszelski, U. and Draganska, M. (2009), The effect of advertising on brand awareness and perceived quality: An empirical investigation using panel data, available at: https://ideas.repec.org/a/kap/qmktec/v7y2009i2p207-236. html 2. Gustafson, T. and Chabot, B. (2007), Brand awareness, available at: http://www.nnyagdev.org/maplefactsheets/ CMB%20105%20Brand%20Awareness.pdf 3. Ragavendran, P. G., Devakumar, G. and Upadhyay, S. (2009), A study on brand awareness of shampoo products for CavinKare, available at: http://www.msrsas.org/docs/sastech_journals/archives/Sept2009/5.pdf


Customer Raise brand awareness



Current results

Trend

Target

%Target complete

Results

% Brand awareness

sK37

49%



85%

57%



Q

50%

Dashboard Outlook KPI Results % Brand awareness

% Brand awareness

61%

Q2 Q3 Q4

61%

53%

Q1

53%

50%

50%

49%

Q3

Q4

49%

Q1

Q2

In Practice Recommendations Awareness strategies ultimately impact sales and financial outcomes. Having a target market that recognizes company products by their specific brand, is one of the objectives many organizations try to achieve. However, brand awareness campaigns may not be sufficient to expand sales funnels, if not encouraged by ongoing marketing and advertising initiatives that further aid customers in making a conscious decision about their purchase. Several recommendations on raising brand awareness can be formulated as follows:


`` Planning a well-documented and informed brand awareness campaign; `` Executing an in-depth analysis of the company’s target market; `` Developing a powerful message that speaks clearly to its audience; `` Using the adequate marketing tools and techniques to enhance brand awareness; `` Making smart use of advertising budgets.

Page 63

KPI 12 $ Customer acquisition cost Functional Areas Marketing & Communications Sub-categories Marketing KPI Record sK1367


Description

Calculation

Definition

Measures how much it costs, on average, to acquire a new customer.

Subordinate metrics

Variations

$ Average customer acquisition cost $ Cost to acquire a new customer

A = $ Marketing spend for customer acquisition B = # New customers

Calculation formula

A/B

Related KPIs

# New customers $ Profit per customer

Trend is good when

Decreasing

Focus

Any Any cost, customers

Data Profile

Purpose

BSC perspective

To reflect the cost of acquiring new customers and to assess new customers’ profitability.

Data capture period

Month


Monthly

Customer


Financial statements, General ledger

Limitations

Data collection is limited by the difficulty to isolate new customer acquisition spending from the overall marketing spending.

Objective measured Expand customer reach









Red: >3,000

Yellow: 1,5003,000

Green: <1,500

Customer acquisition costs vary greatly from one industry to another, especially from one type of market to another (B2B or B2C, offline or online).

Analysis and Resources Overall notes Measuring and keeping track of the costs to acquire new customers can help analyzing customer profitability, by different channels and segments, and tracking costs’ evolution in time.

Page 64

Additional resources ÎÎ http://www.marketingterms.com/dictionary/customer_ acquisition_cost/ ÎÎ http://jimc.medill.northwestern.edu/archives/2003/ grion.pdf


References 1. Mizik, N. (2010), Two sides of customer value: Economic value to the customer (EVC) and life time value of a customer (LTV), available at: http://ocw.mit.edu/courses/sloan-school-of-management/15-810-marketing-managementfall-2010/lecture-notes/MIT15_810F10_lec04.pdf 2. Hoffman, K. D. and Bateson, J. E. G. (2011), Services marketing: Concepts, strategies and cases, Fourth Edition. Mason: South-Western Cengage Learning, available at: http://www.amazon.com/Services-Marketing-Concepts-StrategiesCases/dp/1439039399 3. Livne, G., Simpson, A. and Talmor, E. (2008), Do customer acquisition cost, call usage and customer retention matter in the wireless industry?, available at: http://e-research.en.blogs.ie.edu/files/2008/10/gilav-livne.pdf


Customer Expand customer reach



Current results

Trend

Target

%Target complete

Results

$ Customer acquisition cost

sK1367

1500



1000

66%



M

1500

Dashboard Outlook KPI Results $ Customer acquisition cost

$ Customer acquisition cost 1800

M1 M2

1800

1000

1000

M3

1200

M4

1200

M5

1500

M6

1500

M1

M2

1200

1200

M3

M4

1500

1500

M5

M6

In Practice Recommendations Customer acquisition is not an inherent process that automatically comes with the establishment of one company or brand. Every company that wants to acquire new customers has to be very conscious about the multiple resources the customer acquisition process employs, which all, ultimately add up to the $ Customer acquisition cost:


`` `` `` `` ``

Distinctive mix of product offerings; Customer acquisition channels; Marketing and awareness campaigns; Technological support; Product launch events.

Page 65

KPI 13 % On-time delivery Functional Areas Sub-categories KPI Record

Supply Chain, Procurement, Distribution Online Presence - eCommerce Logistics / Distribution, eCommerce sK10


Any Any delivery, customers

Description

Calculation

Definition

Measures the percentage of items or products that are delivered on-time to customers.

Subordinate metrics

A = # Items delivered on-time B = # Items delivered

Variations

% Received as agreed without delay (CRD) % On time delivery to promised performance

Calculation formula

A/B

Trend is good when

Increasing

Related KPIs

% Correspondence replied to on time % Inventory accuracy % On time pick-ups % Incoming mail received before 8pm at airport, delivered by next working day % Customers who can track order status online % Delivered on time and in full

Focus Purpose

To indicate the level of operational excellence as a driver for customer satisfaction, as late or out of time delivery is likely to lead to dissatisfied customers.

BSC perspective


Day


Weekly


SAP system, or any other system that enables logging of delivery time.

Limitations

Accurate reporting requires constant monitoring of all deliveries and comparisons of arrival times to promised times.

Internal Processes

Objective measured Optimize service delivery









Red: <70%


A low rate of on time delivery may have negative consequences on the business, as clients might consider their needs are not satisfied according to their expectations. A high value for this KPI can lead to customer loyalty.

Analysis and Resources Overall notes This KPI reflects the performance of the organization and the supply chain, both upstream (order processing, warehousing, transportation) and downstream. This is reflected in costumer satisfaction, avoided penalties and operational complications. Page 66

Additional resources ÎÎ http://www.isixsigma.com/index.php?option=com_ k2&view=item&id=770:tqm-case-study-ensuring-on-timenewspaper-delivery&tmpl=component&print=1&Itemid=156


References 1. Momiwand, A. and Shah, A. (2012), Lead time improvement by supplier relationship management with a case study in Pompaj Company, World Applied Sciences Journal, 16(5): 759-768, available at: http://www.academia.edu/3351102/ Lead_Time_Improvement_by_Supplier_Relationship_Management_with_a_Case_Study_in_Pompaj_Company 2. Waters, D. (2011), Supply chain risk management: vulnerability and resilience in logistics, available at: http://www. amazon.com/gp/search?index=books&linkCode=qs&keywords=9780749464264 3. Qian, L. (2009), Supply chain selection with delivery time, price and service level dependent demand, available at: http://www.pomsmeetings.org/confproceedings/011/fullpapers/011-0233.pdf


Customer Optimize service delivery



Current results

Trend

Target

%Target complete

Results

% On-time delivery

sK10

63%



95%

66%



W

57%

Dashboard Outlook KPI Results % On-time delivery W1 W2 W3

% On-time delivery 63%

50%

55%

55%

57%

50%

57%

W4

63%

W1

W2

W3

W4

In Practice Recommendations With the manufacturing industry, % On-time delivery is a very popular Key Performance Indicator that companies have to keep track of. It reflects on the efficiency of production and supply chain processes, as well as, the commitment such companies have towards honoring their service level agreements. Outsourcing the logistical function, has become a widespread practice among companies that want to improve their % On-time deliveries, especially if


these companies operate on a Just – In – Time basis. Some recommended practices on the successful application of supply chain management initiatives include: `` Measurement for data accuracy and reliable forecasting; `` Flexible processes that adapt to fluctuating customer demands; `` Technology to enable facility management and warehousing operations.

Page 67

KPI 14 # Inventory to sales ratio (ISR) Functional Areas Supply Chain, Procurement, Distribution Sub-categories Inventory Management KPI Record sK4808


Description

Calculation

Definition

Measures the ratio between the retailer’s inventory value and the sales revenue.

Subordinate metrics

A = $ Inventory B = $ Sales revenue

Variations

# ISR # Inventory-to-sales ratio

Calculation formula

A/B

Trend is good when

Within range

Retail inventory, sales, retail

Related KPIs

Focus

Data Profile

Purpose

To determine whether the company is carrying too much inventory, by indicating the inventory on hand.

BSC perspective

Internal Processes

Objective measured Optimize inventory turnover

Data capture period

Month


Monthly


Inventory data collection modules

Limitations

Accurate reporting of this KPI depends on a well maintained inventory and sales register. Reporting frequency should match the speed of the inventory turnover.









Red: <1; >1.6

Yellow: 1-1.2; 1.4-1.6

Green: 1.2-1.4

Threshold has just an exemplification purpose. However, a high level of this ratio indicates either a large amount of inventory on hand, or a sales stagnation. Caution should be taken when benchmarking this indicator, as it varies based on industry, market and product type.

Analysis and Resources Overall notes Carrying too much inventory on the company’s books can be an obstacle for operational and organizational growth, as this creates hesitation to produce or hire more, until inventory drops down to a more comfortable level.

Page 68

Additional resources ÎÎ http://www.newyorkfed.org/research/staff_reports/ sr156.pdf


References 1. Bassin, M. W., Marsh, M. T. and Walitzer, S. (2003), A macroeconomic analysis of inventory/sales ratios, Journal of Business & Economic Research, 1(10): 37-46, available at: http://cluteinstitute.com/ojs/index.php/JBER/article/ view/3059/3107 2. Abriatis, W. (2016), Monthly wholesale trade: Sales and inventories, U.S. Department of Commerce, available at: https://www.census.gov/wholesale/pdf/mwts/currentwhl.pdf 3. Kesavan, S. and Mani, V. (n.d.), The relationship between abnormal inventory growth and future earnings for U.S. public retailers, Kenan-Flagler Business School, University of North Carolina at Chapel Hill, available at: http://faculty. chicagobooth.edu/workshops/omscience/past/more/pdf/AIG_gs.pdf


Internal Processes Optimize inventory turnover



Current results

Trend

Target

%Target complete

Results

# Inventory to sales ratio

sK4808

1.5



1.3

115%



M

1.4

Dashboard Outlook KPI Results # Inventory to sales ratio

# Inventory to sales ratio 1.2

M1 M2

1.2

1.1

1.4

1.5

1.2

1.3

M3 M4

1.1

1.3

1.2

M5 M6

1.4 1.5

M1

M2

M3

M4

M5

M6

In Practice Recommendations Inventory management is one of the challenges many companies face in their efforts to adequately stock up on merchandise so that items are both always available and regularly refreshed. By monitoring the # Inventory to sales ratio, wholesalers and retailers, in particular, can assess the feasibility of their inventory turnover rates, as well as, the validity of their service level agreements. Some


recommendations on conducting an effective inventory management include: `` Valuating and categorizing inventory items; `` Forecasting customer demand on individual items; `` Balancing item availability with inventory costs; `` Automating inventory processes.

Page 69

KPI 15 % Slow moving stock Functional Areas Supply Chain, Procurement, Distribution Sub-categories Inventory Management KPI Record sK651


Description

Calculation

Definition

Subordinate metrics

A = # Slow moving items B = # Items in the inventory

Calculation formula

(A/B)*100

Trend is good when

Decreasing

Variations

Measures the percentage of stock that has not moved in the defined number of days, out of the overall stock. The defined number of days is less than the ones established for obsolete items.

Any Any inventory, moving stock

% Slow moving stock rate

Related KPIs

Focus

Data Profile

Purpose

To assess the inventory management capability. The slow moving stock can result into obsolete stock and generate financial losses.

BSC perspective

Internal Processes

Objective measured Optimize inventory turnover

Data capture period

Day


Weekly


Inventory Management Software

Limitations

Accurate reporting for this KPI is dependent on a well functioning inventory management system.









Red: >30%

Yellow: 10-30% Green: <10%

Given the universality of the measure, it suits benchmarking very well. However, targets may vary based on the industry profile. In some industries, companies can work out arrangements with suppliers to limit their vulnerability to slow-selling inventories. Such a relationship can mean that any unsold merchandise can be returned to the wholesaler, for full credit, within a common accepted period.

Analysis and Resources Overall notes Slow-moving items are still valuable. However, if letting them pile up for long periods of time, without producing profit, they become worthless. The emphasis should be on selling them, even with lower prices. As a last resort, if the slow moving items cannot be sold and they are still

Page 70

in good condition, they can be donated to charity and obtain tax advantages - where state allows it. Additional resources ÎÎ h t t p : // w w w. i s m .w s / f i l e s / P u b s / P ro c e e d i n g s / FKGossard.pdf


References 1. Dolgui, A., Morel, G. and Pereira, C. E. (2006), Information control problems in manufacturing, A Proceedings Volume from the 12th IFAC Conference, Saint-Etinne, France, available at: http://www.amazon.com/gp/search?index=books&lin kCode=qs&keywords=9780080446547 2. HM Revenue and Customs (2012), BIM33145 Stock: Valuation- Net realisable value, use of formulas, slow moving stock, acceptable accuracy, available at: http://www.hmrc.gov.uk/manuals/bimmanual/bim33145.htm 3. Thummalapalli, R. (2010), A methodology to evaluate obsolete inventory in health care, University of Nebraska, available at: http://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1008&context=imsediss


Internal Processes Optimize inventory turnover



Current results

Trend

Target

%Target complete

Results

% Slow moving stock

sK651

31%



5%

62%



W

28%

Dashboard Outlook KPI Results % Slow moving stock

% Slow moving stock 31%

W1

31%

30% 28%

30%

W2 W3

31%

28%

W4

31%

W1

W2

W3

W4

In Practice Recommendations Effective inventory management ensures that % Slow moving stock is clearly identified and dealt with. Slow moving inventory is defined by overstocked items, low turnover rates and infrequent shipment of merchandise. An increased amount of slow moving inventory, indicates that the company is not very efficient in keeping its inventory down. High values in % Slow moving stock also reflect on slow sales and financial trouble. Some recommendations on managing % Slow moving stock include:


`` Identifying and cataloguing inventory items with low turnover rates; `` Refining service level agreements with slow moving stock; `` Evaluating the costs associated with slow moving inventory; `` Using KPIs to measure and assess stock turns.

Page 71

KPI 16 % All commodity volume (ACV) distribution Functional Areas Sales and Customer Service Sub-categories Sales KPI Record sK2313


Description

Calculation

Definition

Measures the brand or product availability, as a result of numeric distribution, weighted by its share of all commodity sales.

Subordinate metrics

A = $ Sales of stores that stock the brand B = $ Sales of all stores

Variations

% ACV distribution

Calculation formula

(A/B)*100

Related KPIs

% Adjusted trial rate % Product category performance ratio

Trend is good when

Increasing

Focus

Any Any offer

Data Profile

Purpose

To indicate the customer traffic in stores that sell the brand.

BSC perspective

Customer

Objective measured Improve inland distribution of products

Data capture period

Month


Monthly


Sales reports

Limitations

Accurate reporting requires access to sales data of all stores.









Red: <40%


Threshold example is for reference only. However, the higher the results, the more exposed has to be the product to the customers visiting the stores.

Analysis and Resources Overall notes When sales data is not available for calculation, marketers can use the square footage of the stores, as an approximation of their sales levels. Additional resources ÎÎ http://jan.ucc.nau.edu/~rml/adv311/process/research/ lesson/sld009.htm References 1. Kevin, J. C., Krieg, P. C. and McGarry Wolf, M. (2006), Market new products successfully: Using simulated test market technology. Maryland: Lexington Books, available Page 72

at: http://www.amazon.com/Market-New-ProductsSuccessfully-Technology/dp/0739111795 2. Farris, P. W., Bendle, N. T., Pfeifer, P. E. and Reibstein, D. J. (2010), Marketing metrics: The definitive guide to measuring marketing performance, Second Edition, available at: http://www.amazon.com/Marketing-MetricsDefinitive-Measuring-Performance/dp/0137058292 3. Baye, M. R. (2001), Proposed merger between Heinz and Beech-Nut Scrutinized, available at: http://faculty. lebow.drexel.edu/HammoudehS/Managerial/Heinz_case. pdf



Customer Improve inland distribution of products



Current results

Trend

Target

%Target complete

Results

% All commodity volume (ACV) distribution

sK2313

40%



70%

57%



M

45%

Dashboard Outlook KPI Results % All commodity volume (ACV) distribution M1

% All commodity volume (ACV) distribution 45%

20%

M2

25%

M3

30%

M4

30%

20%

30%

30%

M3

M4

45%

M5 M6

25%

40%

40%

M1

M2

M5

M6

In Practice Recommendations An intricate key performance indicator in itself, the % All commodity volume (ACV) distribution is gaining popularity, especially, with distribution channels worldwide. The important fact with this indicator is, that it measures the number of stores selling one product, while also weighing the stores based on their size, in the KPI calculation formula. An informed distribution in the volume of one product, based on the size of the stores that make it available to the end consumer, is especially important for the accurate distribution of products based on the stocking and display requirements of individual retail units. The most important benefit of % All commodity volume distribution is that it provides valuable insight into consumer traffic and demand for a certain brand, as per the retail store that sells it. This allows for an analysis of the sales levels generated by different stores, while also taking into account the size and capacity of the stores considered. A downside of the % All commodity volume


distribution is that it does not appraise the merchandising and marketing efforts that each store puts forward in order to sell products that pertain to a particular brand. Some recommendations on increasing brand visibility include: `` Research analysis of consumer traffic and consumer segmentation data `` Integrating all commodity volume distribution data into market analysis models and key branding techniques `` Focusing on the retailers that produce the best results and developing strategies to maintain profitable collaborations `` Benchmarking on best practices for leveling out all commodity volume distribution `` Regular communication session with retailers on best merchandising and marketing strategies.

Page 73

KPI 17 # Earned man-hours Functional Areas Portfolio and Project Management Sub-categories Project Management KPI Record sK347


Description

Calculation

Definition

Measures the total man-hours corresponding to the completed work in place.

Subordinate metrics

A = # Planned man-hours B = % Progress of work completed

Variations

# Man-hours with completed work in place

Calculation formula

A*B

Related KPIs

% Time sheets incorrectly filled # Man-hours per occurrence spent locating problems % Time predictability at construction due to project manager change orders

Trend is good when

Increasing

Focus

Any Any man-hours, constructions

Data Profile

Purpose

To assess job productivity and projects progress.

BSC perspective

Internal Processes

Objective measured Increase productivity levels

Data capture period

Spot


Monthly


Time sheets of employees

Limitations

Accurate reporting for this KPI is dependent on a well maintained Enterprise Project Management system, capable to record progress at any point.









Red: <80

Yellow: 80-100

Green: >100

A low level of earned man hours indicates that the project has experienced lower than expected productivity, as actual man-hours were greater than the progress earned man-hours.

Analysis and Resources Overall notes Involvement of organizations, especially the construction companies, in measuring earned man hours reflects the maturity of project management. Dividing the earned man-hours by the actual man-hours provides a productivity index that is frequently used in construction projects. Page 74

Additional resources ÎÎ http://www.iasdm.org/journals/index.php/ijaec/ article/view/49/56


References 1. Serag, E. (2006), Change orders and productivity loss quantification using verifiable site data, available at: http://etd. fcla.edu/CF/CFE0001221/Serag_Engy_200608_PhD.pdf 2. Rajendran, H. K. (2008), Process quality and capacity planning, available at: http://soar.wichita.edu/xmlui/bitstream/ handle/10057/2040/t08033.pdf 3. City of Bethel (2012), Liquefied and compressed natural gas (LCNG) as a bridge to reducing energy costs in rural Alaska, available at: http://www.akenergyauthority.org/Content/Programs/EETF/Documents/Round_1/004.pdf


Internal Processes Increase productivity levels



Current results

Trend

Target

%Target complete

Results

# Earned man-hours

sK347

110



110

100%



M

100

Dashboard Outlook KPI Results # Earned man-hours M1

# Earned man-hours 85

M2

90

M3

90

M4 M5 M6

85

90

90

M1

M2

M3

95

100

M4

M5

110

95 100 110

M6

In Practice Recommendations Man-hours stand at the basis of labor productivity. Whether it is # Labor hours, # Hours per unit, # Effective working time or # Earned man-hours, labor productivity KPIs provide quantifiable insight into the actual effort an employee puts in, respective of the monthly income this same employee earns within the company. Measuring labor productivity is common practice in the construction and manufacturing industries, while also being a popular topic with portfolio and project management assignments. # Earned man-hours provides indication of productivity


against progress, and some advice into optimizing this productivity parameter can be formulated as follows: `` Determine work order size and organize scheduling activities; `` Measure and monitor progress against deadlines; `` Set milestones that help with meeting deadlines; `` Take into account considerations of budget; `` Nurture collaborative environments that boost productivity levels.

Page 75

KPI 18 % Cannibalization rate of new product offering Functional Areas Sales and Customer Service Sub-categories Sales KPI Record sK156


Description

Calculation

Definition

Measures the decrease in sales of existing products due to launches of new products.

Subordinate metrics

Variations

% Ratio of the cannibalized sales volume

A = $ Sales of the new product that cannibalized existing products B = $ Sales of the new product

Related KPIs

% Current-year percentage sales due to new products released in the past six years $ Profits from new products or business operations

Calculation formula

(A/B)*100

Trend is good when

Decreasing

Any Any sales, new products

Data Profile

Focus Purpose

BSC perspective

To indicate the break-even rate of cannibalization (the maximum sales volume of the new offering that could come from the company’s existing offering without incurring a loss).

Data capture period

Quarter


Quarterly


Sales reports

Customer

Limitations

Accurate reporting of the KPI is affected by the difficulty to measure the sales of the new product that cannibalized the existing products. It is necessary to know for sure that the decrease in sales of the existing products is due to the new product and not due to competition.










Red: >50%

Yellow: 20-50% Green: <20%

Cannibalization is a consequence of product line extensions, which typically aim to increase the company’s revenues, or to steal market share from competition.

Analysis and Resources Overall notes A side effect of product line extensions is that in addition to stealing share from competitors, new offerings also take away market shares from the company’s current offering. Page 76

Additional resources ÎÎ http://mme.wharton.upenn.edu/help/marketing_math_ help.pdf


References 1. Srinivasan, S. (2014), Quantification of attribute driven product cannibalization induced by new product introduction, available at: http://www.worldcat.org/title/quantification-of-attribute-driven-product-cannibalization-induced-by-newproduct-introduction/oclc/62090537 2. Desai, P. S. (2001), Quality segmentation in spatial markets: When does cannibalization affect product line design?, available at: http://pubsonline.informs.org/doi/abs/10.1287/mksc.20.3.265.9767 3. Pancras, J., Srisam, S. and Kumar, V. (2012), Empirical investigation of retail expansion and cannibalization in a dynamic environment, available at: http://dl.acm.org/citation.cfm?id=2398305


Internal Processes Expand customer reach



Current results

Trend

Target

%Target complete

Results

% Cannibalization rate of new product offering

sK156

29%



10%

29%



Q

31%

Dashboard Outlook KPI Results % Cannibalization rate of new product offering Q1 Q2 Q3 Q4

% Cannibalization rate of new product offering

26%

26%

28%

31%

29%

28% 31% 29%

Q1

Q2

Q3

Q4

In Practice Recommendations New product launches ultimately impact the sales of existing products, by pushing forward the sales for the newly released products. The % Product cannibalization rate reflects on the magnitude of new released products on the existing product portfolio. Product cannibalization occurs when newly launched products target the same market segments as the existing ones. Some recommendations on effectively managing product cannibalization rates include:


`` Addressing new market segments for market base expansion; `` Targeting related but different markets with new product offerings; `` Using product cannibalization strategies on competitors rather than one self; `` Forecasting the effects of a newly launched products on the existing product portfolio; `` Marketing strategies that alleviate the effects new product launches have on existing company products.

Page 77

KPI 19 % Employee utilization rate Functional Areas N/A Sub-categories N/A KPI Record sK320


Description

Calculation

Definition

Measures the time employees are actually used in project-related work, relative to their availability.

Subordinate metrics

Variations

% Rate of utilization

Related KPIs

# Labor multiplier

A = # Time working on projects (in days / hours) B = # Time available for working on projects (Note: this is not equal to total labor time, as employees can have some time allocated for research, training or other similar activities)

Calculation formula

(A/B)*100

Trend is good when

Increasing

Focus

Professional Services Engineering, Recruitment / Employment Activities, Legal Practice, Business Consulting, Accounting Services productivity , employees

Data Profile

Purpose

BSC perspective

To indicate the efficiency in planning employees’ activities and involvement in different projects.

Data capture period

Month


Monthly

Internal Processes


Employee weekly activity reports

Limitations

Accurate reporting requires good integration of employee time sheets and correlation to projects and other activities.

Objective measured Increase labour productivity









Red: <80%


Thresholds given have just an exemplification purpose. Targets should be set in relation to the utilization potential, which should be calculated by extracting training hours and other personal time from the total employment hours.

Analysis and Resources Overall notes Data from time sheets and ERP applications can be used to report utilization at any level of the organization - individual, project, group and company. There are approaches that consider utilization rate equal to the chargeable ratio. But the difference between them, is Page 78

that the latter refers to total labor time, whereas the first one extracts from the employment time, the hours needed for research, training or other similar activities that are inherent in a professional services firm.


Additional resources ÎÎ http://www.performancemagazine.org/the-challenges-in-building-an-employee-performance-centered-ecosystem/ References 1. Beekman Associates (2005), Agency utilization rate what is it and how does it impact agency compensation?, available at: http://beekmanassociates.com/pdfs/AgencyUtilizationRates.pdf 2. Lambert, A. D. (2006), Individual differences: Factors affecting employee utilization of flexible work arrangements, available at: http://www.sciencedirect.com/science/article/pii/S000187910800016X 3. Carver, D. A. (2005), What’s wrong with management. Lincoln: iUniverse, available at: http://www.amazon.com/WhatsWrong-Management-Daniel-Carver/dp/0595363806


Internal Processes Increase labor productivity



Current results

Trend

Target

%Target complete

Results

# Employee utilization rate

sK320

85%



100%

89%



M

80%

Dashboard Outlook KPI Results # Employee utilization rate

# Employee utilization rate 85%

M1

87%

85%

85%

87%

M2 M3

85%

M4

85%

M5

85%

85% 80%

80%

M6

85%

M1

M2

M3

M4

M5

M6

In Practice Recommendations By taking the average number of hours employees actually work in month, and dividing this figure by the standard number of hours employees have to work in a month, companies ultimately get a result that reflects on their # Employee utilization rate. Employee utilization rates impact human resources decisions one way or the other. Over-utilization of staff, can lead to a conscious decision to hire more people, while under-utilization of staff may result in the reevaluation of the working potential one company has and makes use of. The # Employee utilization rate can also be used to identify employees who are not


profitable within the company, by comparing the cost of each employee to the actual billable hours worked within the reporting period mentioned. Some recommendations on optimizing # Employee utilization rates include: `` Planning for performance and adequate workload distribution; `` Monitoring productivity levels and evaluating individual performance; `` Enabling individual performance management software; `` Create a working environment that boosts productivity.

Page 79

KPI 20 $ Telecom subscriber acquisition cost Functional Areas N/A Sub-categories N/A KPI Record sK270


Description

Calculation

Definition

Subordinate metrics

A = $ Spend for gaining new subscribers B = # Gross subscriber additions

Calculation formula

A/B

Trend is good when

Decreasing

Variations Related KPIs

Measures the average cost of gaining a new subscriber to the service. The costs to acquire new subscribers refer to the marketing and advertising expenses, as well as to other specific costs, such as the subsidized provision of equipment (e.g. mobile phones), payment of commissions and the employment of sales staff. $ Subscriber acquisition cost $ Average cost per subscriber # Mobile phone web users

Focus Purpose

To assess the process of new customer acquisition, from a cost and profitability perspective.

BSC perspective

Customer

Telecommunications / Call Center Telecommunications cost, telecommunications


Month


Monthly


Customer data base, sales records, financial statements

Limitations

Accurate reporting for this KPI is dependent on a well maintained system for tracking new customer acquisition and expenditure directed towards increasing the base of subscribers. Due to the various sources of data, automation in the integrated performance reporting system is not recommended.










Red: >150

Yellow: 100-150 Green: <100

Targets should be set taking into consideration the industry specifics and the available budget.

Analysis and Resources Overall notes This indicator is widely used in telecommunication industry sectors, especially in the mobile phone networks. Mobile telecommunication companies frequently pay incentives (commissions) to retailers that bring in customers for their networks. In the case of Personal Communication Systems, the subscriber acquisition cost includes the acquisition costs for the handsets offered to subscribers and the commissions

Page 80

paid to retailers, from which are deducted the revenues received from the sale of handsets, for each new customer. Additional resources ÎÎ http://web.ita.doc.gov/ITI/itiHome.nsf/9b2cb14bda 00318585256cc40068ca69/7a19947d610987658 525788c0041ea3d/$FILE/telecom%20market%20 snapshot-china.pdf www.kpiinstitute.org

References 1. Kumar, V. (2008), Customer lifetime value: The path to profitability, available at: http://www.amazon.com/gp/search?index=b ooks&linkCode=qs&keywords=9781601981561 2. Mozer, M. C., Wolniewicz, R., Grimes, D. B., Johnson, E. and Kaushansky, H. (2000), Predicting subscriber dissatisfaction and improving retention in the wireless telecommunications industry, available at: http://dl.acm.org/citation.cfm?id=2326585 3. Urgent Issues Group (2010), Subscriber acquisition costs in the telecommunications industry, available at: http://www.aasb. gov.au/admin/file/content105/c9/INT1042_12-04.pdf


Customer Expand customer reach



Current results

Trend

Target

%Target complete

Results

$ Telecom subscriber acquisition cost

sK270

139



50

35%



M

170

Dashboard Outlook KPI Results $ Telecom subscriber acquisition cost M1 M2

$ Telecom subscriber acquisition cost 208

120 145

170

167

139

208

M4

170

M5 M6

120

167

M3

145

139

M1

M2

M3

M4

M5

M6

In Practice Recommendations Included in the $ Telecom subscriber acquisition cost are the direct and indirect costs associated with acquiring new telecom subscribers: marketing costs, advertising costs, discounts, the costs associated with using various distribution channels to gain new customers. Having that competition is rather intense in the telecommunications industry worldwide, subscriber acquisition costs have to be carefully managed so that new subscribers choose one provider over the other, without turning into unprofitable


customers. Some recommendations on optimizing $ Telecom subscriber acquisition costs include: `` Devising multiple subscriber packages that target different customer groups within the market; `` Personalizing product offering for increased customer loyalty; `` Facilitating unique customer experiences; `` Build a solid technological infrastructure to support industry advancement.

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SEC V APPENDIX A – RELATED REPORTS Fuel your professional growth with the best-of-breed collection of knowledge resources and stay abreast of the latest trends. KEY BENEFITS `` Integration: a collection of the most popular KPIs `` Rigorous standards: thorough analysis of each KPI according to smartKPIs.com documentation form and standards `` Support: a valuable baseline resource for informing and addressing performance management and measurement challenges

Best-selling Top KPIs Reports

BY FUNCTIONAL AREAS ÎÎ

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Top KPI Reports By Functional Area Top 25 Accounting KPIs - 2016 Extended Edition Top 25 Accounts Payable and Receivable KPIs - 2016 Edition Top 25 Cost Analysis KPIs - 2016 Edition Top 25 Planning and Reporting KPIs - 2016 Edition Top 25 Administration / Office Support KPIs - 2016 Edition Top 25 Corporate Travel KPIs - 2016 Edition Top 25 Facilities Management KPIs - 2016 Edition Top 25 Legal Services KPIs - 2016 Edition Top 25 CSR KPIs - 2016 Edition Top 25 Finance KPIs - 2016 Extended Edition Top 25 Asset Management KPIs - 2016 Edition Top 25 Forecasts & Valuation KPIs - 2016 Edition Top 25 Liquidity KPIs - 2016 Edition Top 25 Profitability KPIs - 2016 Edition Top 25 Compliance and Audit Management KPIs - 2016 Edition Top 25 Governance KPIs - 2016 Edition Top 25 Risk Management KPIs - 2016 Extended Edition Top 25 Health, Safety and Security KPIs - 2016 Extended Edition Top 25 Human Resources KPIs - 2016 Extended Edition Top 25 Compensation and Benefits KPIs - 2016 Edition Top 25 Efficiency and Effectiveness KPIs - 2016 Edition Top 25 Recruitment KPI– 2016 Edition Top 25 Retention KPIs - 2016 Edition Top 25 Service Delivery KPIs - 2016 Edition Top 25 Talent Development KPIs - 2016 Edition Top 25 Workforce KPI– 2016 Edition Top 25 Information Technology KPIs - 2016 Extended edition Top 25 Application Development KPIs - 2016 Extended Edition

By Industry Top 25 Crops KPIs - 2016 Edition Top 25 Forestry and Logging KPI– 2016 Edition Top 25 Livestock, Hunting and Fishing KPIs - 2016 Edition Top 25 Event Production and Promotion KPIs - 2016 Edition Top 25 Libraries and Archives KPIs - 2016 Edition Top 25 Museums KPIs - 2016 Edition Top 25 Civil Engineering KPIs - 2016 Edition Top 25 Construction of Buildings KPIs - 2016 Edition Top 25 Customs KPIs - 2016 Extended Edition Top 25 Border Protection and Enforcement KPIs - 2016 Edition Top 25 Immigration and Travel KPIs - 2016 Edition Top 25 Trade Facilitation KPIs - 2016 Edition Top 25 Academic Education KPIs - 2016 Extended Edition Top 25 Colleges and Universities KPIs - 2016 Extended Edition Top 25 Primary and Secondary Schools / K-12 KPIs - 2016 Edition Top 25 Banking and Credit KPIs - 2016 Extended Edition Top 25 Insurance KPIs - 2016 Extended Edition Top 25 Investments KPI – 2016 Extended Edition Top 25 Mortgages KPIs - 2016 Edition Top 25 Pension Funds KPIs - 2016 Edition Top 25 Local Government KPIs - 2016 Extended Edition Top 25 State Government KPIs - 2016 Extended Edition Top 25 Healthcare KPIs - 2016 Extended Edition Top 25 Emergency Response / Ambulance Services KPIs - 2016 Edition Top 25 Hospitals KPIs - 2016 Extended Edition Top 25 Medical Laboratory KPIs - 2016 Edition Top 25 Medical Practice KPIs - 2016 Edition Top 25 Preventive Healthcare KPIs - 2016 Edition Top 25 Restaurant KPIs - 2016 Extended Edition Top 25 Hotel KPIs - 2016 Extended Edition Top 25 Travel Agency KPIs - 2016 Edition Top 25 Airports KPIs - 2016 Extended Edition

Top 25 Data Center KPIs - 2016 Edition Top 25 Enterprise Architecture KPIs - 2016 Edition Top 25 IT Security KPIs - 2016 Extended Edition Top 25 Network Management KPIs - 2016 Edition Top 25 Service Management KPIs - 2016 Edition Top 25 Innovation KPIs - 2016 Edition Top 25 Knowledge Management KPIs - 2016 Edition Top 25 R&D KPIs - 2016 Extended Edition Top 25 Management KPIs - 2016 Edition Top 25 Advertising KPIs - 2016 Edition Top 25 Marketing KPIs - 2016 Extended Edition Top 25 Public Relations KPIs - 2016 Edition Top 25 eCommerce KPIs - 2016 Edition Top 25 Email Marketing KPIs - 2016 Edition Top 25 Online Advertising KPIs - 2016 Edition Top 25 Search Engine Optimization (SEO) KPIs - 2016 Edition Top 25 Web Analytics KPIs - 2016 Edition Top 25 Portfolio Management KPIs - 2016 Extended Edition Top 25 Project Management KPIs - 2016 Extended Edition Top 25 Maintenance KPIs - 2016 Extended Edition Top 25 Production KPIs - 2016 Extended Edition Top 25 Quality Management KPIs - 2016 Extended Edition Top 25 Customer Service KPIs - 2016 Extended Edition Top 25 Sales KPIs - 2016 Extended Edition Top 25 Supply Chain*, Procurement, Distribution KPIs - 2016 Extended Edition Top 25 Contract Management KPIs - 2016 Extended Edition Top 25 Inventory Management KPIs - 2016 Extended Edition Top 25 Logistics / Distribution KPIs - 2016 Extended Edition Top 25 Procurement / Purchasing KPIs - 2016 Extended Edition Top 25 Supply Chain Management KPIs - 2016 Extended Edition Top 25 Ports KPIs - 2016 Edition Top 25 Railways KPIs - 2016 Edition Top 25 Roads KPIs - 2016 Edition Top 25 Broadcasting (TV and Radio) KPIs - 2016 Edition Top 25 Film and Music KPIs - 2016 Edition Top 25 Social Media KPIs - 2016 Edition Top 25 NGO KPIs - 2016 Extended Edition Top 25 Recruitment / Employment Activities KPIs -2016 Edition Top 25 Postal and Courier Services KPIs - 2016 Edition Top 25 Business Consulting KPIs - 2016 Extended Edition Top 25 Accounting Services KPIs - 2016 Edition Top 25 Engineering KPIs - 2016 Edition Top 25 Legal Practice KPIs - 2016 Edition Top 25 Property Management KPIs - 2016 Edition Top 25 Real Estate Development KPIs - 2016 Extended Edition Top 25 Real Estate Transactions KPIs - 2016 Edition Top 25 Coal and Minerals Mining KPIs - 2016 Edition Top 25 Oil and Gas KPIs - 2016 Extended Edition Top 25 Sustainability KPIs - 2016 Edition Top 25 Retail KPIs - 2016 Extended Edition Top 25 Telecommunications KPIs - 2016 Edition Top 25 Call Center KPIs - 2016 Extended Edition Top 25 Coaching / Training KPIs - 2016 Edition Top 25 Sport Club Management KPIs - 2016 Edition Top 25 Sport Event Organization KPIs - 2016 Edition Top 25 Airlines KPIs - 2016 Extended Edition Top 25 Land Transport (Road & Rail) KPIs - 2016 Edition Top 25 Local Public Transport KPIs - 2016 Edition Top 25 Shipping KPIs - 2016 Edition Top 25 Utilities KPIs - 2016 Extended Edition Top 25 Electricity KPIs - 2016 Edition Top 25 Natural Gas KPIs - 2016 Edition Top 25 Water and Sewage KPIs - 2016 Edition

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Page 83

APPENDIX B: REFERENCE COLLECTION OF BOOKS The KPI Dictionary Series Performance excellence is using the right resources, at the right time. Get your own Dictionary and shape your next competitive advantage!

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Examples of documented Key Performance Indicator Definitions for an in depth view on Performance Measurement Newly released publications: ÎÎ 14 Functional Area KPI Dictionaries ÎÎ 18 Industry KPI Dictionaries

KEY COMPONENTS THAT EACH BOOK ENCOMPASSES: `` Explicit KPI definitions, submetrics and calculation formulas `` Precise KPI terminology explanation `` Comprehensive key performance indicators infographic `` Accurate guidelines on how to use the book

Visit store.kpiinstitute.org/publications.html and get The KPI Dictionary specific to your departement or industry Page 84

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Select the KPI Dictionary that suites your needs! Dictionaries by Functional Area

Dictionaries by Industry

`` The Accounting KPI Dictionary

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`` The Health, Safety, Security and Environment KPI Dictionary

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`` The Information Technology KPI Dictionary `` The Knowledge and Innovation KPI Dictionary `` The Marketing and Communications KPI Dictionary `` The Online Presence KPI Dictionary `` The Production and Quality Management KPI Dictionary `` The Project and Portfolio Management KPI Dictionary `` The Sales and Customer Service KPI Dictionary `` The Supply Chain KPI Dictionary

`` The Financial Institutions KPI Dictionary `` The Hospitality and Tourism KPI Dictionary `` The Infrastructure Operations KPI Dictionary `` The Local Government KPI Dictionary `` The Media KPI Dictionary `` The Professional Services KPI Dictionary `` The Real Estate / Property KPI Dictionary `` The Resources KPI Dictionary `` The Sports KPI Dictionary `` The State / Federal Government KPI Dictionary `` The Telecommunications KPI Dictionary `` The Transportation KPI Dictionary `` The Utilities KPI Dictionary

You are now one step away from mastering business excellence

8000 KPIs structured in 2 volumes THE KPI DICTIONARY VOLUME I: FUNCTIONAL AREAS Find out insights about KPIs from 16 Functional areas and 65 subcategories THE KPI DICTIONARY VOLUME II: INDUSTRIES Access KPIs from a variety of 25 Industries and 94 industry specific subcategories

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Page 85

APPENDIX C: PERFORMANCE MANAGEMENT TOOLKITS Get your pre-populated comprehensive selection of tools that enable both planning and monitoring performance! KEY BENEFITS `` Integration: a complete set of tools for implementing a Performance Management System `` Hands-on approach: a ready-to-use toolkit, containing pre-populated templates `` Advice and learning: all templates are filled in with relevant data, requiring limited effort for customization `` Complete documentation: all KPIs are fully documented

Toolkits by Industry Managing and measuring performance is now easier with prepopulated templates

Call Center Performance Management System Toolkit

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APPENDIX D: PERFORMANCE MAGAZINES Keeping professionals updated with the latest performance management trends and developments DISCOVER THE PERFORMANCE MANAGEMENT SERIES `` Perspectives: interviews with specialists from various countries `` Around the World: countries analyzed for legislation in the field. Special country insights `` Education: reputable universities, university degrees and subjects related to the field `` Trends: the Google search popularity and media exposure of performance related keywords `` Resources: best-selling and latest published books. performance-related academic articles `` Career: Most sought-after careers and salary levels in the field in the specific member states

Special Editions The Performance Management in 2014 Special Editions are The KPI Institute’s exclusive publications that provide in-depth analysis on Performance Management within the Gulf Cooperation Council and the Member States of the Association of Southeast Asian Nations. GET ACCESS TO `` Portraits of renown performance experts across the globe `` Interviews with prominent professionals in the field `` Articles offering valuable insights on numerous performance related topics `` Reviews of software and hardware solutions `` Resources and other recommendations

THE KPI INSTITUTE’S MAGAZINE DEDICATED TO PERFORMANCE, NOW IN PRINT!

Browse and download magazines from store.kpiinstitute.org/publications.html


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Page 87

APPENDIX E: MEMBERSHIP OPTIONS Become a member of The KPI Institute and gain first-hand access to our knowledge and expertise! BENEFITS `` Event discounts. Get exclusive discounts to our training courses, conferences and forums scheduled throughout the entire year across 6 continents. `` Networking. Join your peers! Get and share valuable insights on performance related subjects within The KPI Institute Community. `` Professional confirmation. Consolidate your personal brand by using our exclusive badge to demonstrate your professional commitment to performance excellence. `` Research helpdesk. Receive guidance from our research team to identify the best resources according to your needs and explore The KPI Institute knowledge platforms `` Analyst consultation. Benefit from dedicated advisory support from The KPI Institute’s research analysts. Customized secondary research projects can be developed on demand.

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APPENDIX E: SUBSCRIPTION OPTIONS Explore the world of KPIs Whether you want to implement a performance measurement system or you need to improve your current framework, you can choose the best subscription plan to help you inform your KPI Selection. GET ACCESS TO SMARTKPIS.COM - The largest database of properly documented KPIs BENEFITS `` Find relevant KPI examples for your context `` Obtain high quality KPI documentation `` Use the KPI documentation form example to design your own template `` Export documented KPI examples and instantly create your own library `` Receive assistance from experts on matters related to performance measurement

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Page 89

APPENDIX G: THE KPI INSTITUTE TRAINING PROGRAMS Certification Courses

Scheduled Courses in 2016

Find out more at kpiinstitute.org/certification

Page 90

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THE KPI INSTITUTE OFFERS A VARIETY OF CUTTING-EDGE TRAINING PROGRAMS TO MEET YOUR NEEDS

Non-certification Courses Discover practical solutions, expert-vetted content and tools you can immediately use at the workplace.

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Browse programs that focus on the subjects you want to master by visiting store.kpiinstitute.org/training-catalogue


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APPENDIX H: ADVISORY SERVICES Our data-based advisory services focus on our customers’ most challenging issues SEIZE OPPORTUNITIES. ACCELERATE BUSINESS PERFORMANCE. EXPLORE SOLUTIONS

Strategy and Business Planning Maturity Model

Benchmarking

`` Strategy and Business Planning Workshops

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Performance Measurement

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`` KPIs Advice

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`` Projects Performance Improvement

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Should you be interested in benefiting from one of our Advisory Services email us at [email protected] and our analysts will contact you. Page 92

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Employee Performance

Supplier Performance

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Customer Service Performance `` Performance Management System Implementation

Personal Performance `` Personal Performance Essentials

`` Customer Service KPIs Selection `` Customer Service Workshops `` Customer Service Performance Reporting `` Mystery Client Services

OUR APPROACH The KPI Institute has been researching performance measurement for more than 10 years and has developed not only the most comprehensive database of KPI examples, but also its own KPI Management Framework.

Should you be interested in benefiting from one of our Advisory Services email us at [email protected] and our analysts will contact you.


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Page 93

APPENDIX I: SOFTWARE Business Intelligence Software Quickscore is an easy to use, web-based balanced scorecard automation solution that allows an organization to quickly see results from their balanced scorecard investment.

CHARACTERISTICS `` Software specialized in organizational performance measurement `` Intuitive, robust, fully live and interactive `` Reliable in any economic environment `` Offers optimal return on investment

BENEFITS `` Real time access to data `` Information and business intelligence `` Enabled decision-making `` Visualization, alignment and integration

CONFIGURATION `` Simple and intuitive data import `` Data mapping via drag and drop `` Data automation `` Real-time monitoring

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Page 94



Page 95

APPENDIX J: GLOSSARY OF TERMS The following list provides an explanation of several popular terms related to KPIs: Analytics - The process used to discover meaningful patterns in data. It supports better decision making. Best practice - A method that proved to achieve superior results than the ones obtained with other means. Being that effective, it is generally used as a benchmark. Customer Perspective - One of the four perspectives used with the Balanced Scorecard that should bring visibility into who are the target customers and what is the value proposition in serving them. Dashboard - In performance management, a dashboard is a performance management tool used for monitoring data on a daily basis. It is characterized by visual representations of data that enable fast and easy understanding of the performance status. Data capture period - Period for which the results of the performance indicator have been measured. Data custodian - The person responsible for providing data in regards to measuring and monitoring KPIs. Data reporting - The process of compiling and communicating performance results. Data visualization - Refers to the visual representation of data, in order to better illustrate performance results. Documenting KPIs - The process of structuring the most relevant information regarding a KPI, to ensure a standardized approach in working with KPIs and facilitating their measurement and analysis of results. Effectiveness - The extent to which objectives are achieved and targets are met, plans are realized, without considering the resources involved. Efficiency - The comparison of what is actually produced (outputs) with the resources consumed, such as money, time, labor (inputs). Efficiency takes place when the same volume of outputs can be produced with less inputs. Learning and Growth Perspective - One of the four perspectives used by the Balanced Scorecard that monitors human capital, information capital and the organizational climate.

focusses on the key processes the organization must excel at, in order to provide added value for customers, and ultimately, shareholders. Key Performance Indicator (KPI) - A measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s activity. KPI documentation form - A template that structures relevant information regarding a KPI. The most important fields of a documentation form are the KPI name, Definition, Calculation formula and Target. Metric - A generic term referring to everything that can be measured around us, such as: # Air temperature, # River depth or # Employee’s average height. When metrics reflect the achievement of a desired state they become KPIs. Objective - A precise statement of what an organization wants to achieve. Scorecard - A performance management tool used to illustrate performance results and the progress against established targets. It consists of a collection of KPIs correlated with the company’s strategic objectives. Standard reporting frequency - A regular frequency of data reporting for a performance indicator. Target - Reflects the desired level to be achieved for a key performance indicator, providing meaning to measurement results and feedback regarding performance. Taxonomy - A classification of structures, ordered in a system, which indicates natural relationships; distribution into arranged groups or categories. Traffic Light Colors - Refers to using color signals to visualize the difference between the current situation and the desired results. Red means that actual results are below targets, yellow is used to express an acceptable deviation from target, while green is used when the desired results were met. Trend - A pattern of continuous change in a condition, process or output, or an average or general tendency of a series of data points moving in a fixed direction over time, which is represented by a line or curve on a graph.

Financial Perspective - One of the four perspectives used by the Balanced Scorecard, that informs an organization whether strategy implementation is leading to improved financial results. Internal Process Perspective - One of the four perspectives used with the Balanced Scorecard that

Page 96


The KPI Institute is a research institute specialized in business performance. It operates research programs in 12 practice domains ranging from strategy and KPIs to employee performance and from customer service to innovation performance. Insights are disseminated through a variety of publications, subscriptions services and through a knowledge platform available to registered members. Support in deploying these insights in practice is offered globally through training and advisory services. It manages smartKPIs.com, the result of a research program dedicated to documenting and cataloguing how KPIs are used in practice. It is an online portal containing the largest collection of well documented KPI examples, with over 20,600 examples from 16 Functional Areas and 25 Industries. Over the last 12 years, the KPI Institute has assisted over 48,000 organizations in finding solutions to their KPI needs. First published in 2011, the Top KPI Reports have now reached their third and improved edition. The novelty in the new Top KPI reports is an unprecedented design of the KPI Documentation form, as well as, an enriched content of KPIs which can invaluably assist the measurement process of organizations worldwide.

Is an on-line platform dedicated to performance measurement. It contains more than 20,600 KPI examples, with over 7,000 being either published or premium documented. The smartKPIs.com platform joins together examples of KPIs which are specific to the business environment whether at industry or functional area level. A wide range of KPIs found on the platform are of interest at global level, such as macroeconomic indicators, social and health indicators or environment and sustainability related KPIs. Other examples of KPIs can be used by individuals to track productivity, time management, life-work balance, health and budget management.

HUNDREDS OF RESOURCES, ONLY ONE CLICK AWAY The KPI Institute’s Research library is the meeting platform of all professionals interested in accessing first-hand performance related research, from 12 practice domains! This section highlights the most notable Performance Measurement resources available in our Research library.

ÎÎ

Research studies

ÎÎ

Dictionaries

ÎÎ

Books

ÎÎ

Reports

The Top KPIs series of research reports contains a selection of the most visited KPI examples on smartKPIs.com. Each report contains KPI examples, inclusive of 26 fields that are fully documented with organizational specific data. The reports are available in both electronic and paper format.

KPI - Top 20 KPIs Extended Edition 2016

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