Like all new tools, KPIs can be very useful in helping a business to achieve and maintain improved performance but, like all new tools, adequate time, development, learning and careful use is needed to ensure they produce what is intended of them.
Performance management is not a simple process. Sure, over the long-term, well established processes and performance measures require minimal effort to maintain when compared with managing out-of-control processes, but to get from the out-of-control process to the "well-oiled" version takes a concerted and well reasoned effort. Key performance indicators can help in this regard but care must be taken in their application. This is meant as an introduction to many of the aspects to consider when establishing and using key performance indicators to measure improvement.
· Determine business need · Determine the area of focus and limit scope · Remember the 4 Is - Indicators Ineffective in Isolation · KPIs should be designed and tested · Consider Leading vs. Lagging indicators · Implement in Stages · Establish business tiers in the reporting structure · Set appropriate sampling frequency and trend window · Understand human factors
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