Key Performance Indicators (KPIs)
Key Performance Indicators (KPI’s) are widely considered to provide an excellent mechanism for measuring the effectiveness of a business process. When multiple Key Performance Indicators are presented together to the viewer they form a scorecard of departmental or enterprise performance. A scorecard of KPI’s will provide the viewer with specific quantified values that communicate whether a particular process is performing above or below expectations. An individual will therefore be better informed about areas requiring attention and improvement. The power of the scorecard enables the organisation to monitor its business processes and highlight potential problems and bottlenecks.
Charting a history of a KPI
What is often missing from many score carding software solutions is the ability to view the trend of a KPI over an extended period time, not just since the last time it was updated. Many solutions simply provide a static picture of the current performance of an indicator. The ability to display a complete history will provide a far richer view of the performance of a KPI and its long-term trend.
Annotating and commenting on KPIs
But perhaps an individual with responsibility for a KPI, wants to be able to explain, in plain text, why a particular value is the way it is, there may be a very reasonable answer for an obvious discrepancy. StrategyBlocks provides a free-text comment field against every KPI value in the system. Going a step further, the comments are then added to the KPI chart itself so they available as part of StrategyBlocks’ strategy map views.
Manipulating and Calculating KPIs
New intelligence can often be derived from looking at data in different ways. Many important ratios are a product of taking two or more KPI’s and performing a simple arithmetic function e.g. Earnings per Share (income / number of shares) or Debt to Equity (liabilities / equity). These new values may not be conveniently stored in an underlying source database. Organisations need a simple, intuitive mechanism to enable business people to create these functions on the fly, share them with the wider business community, and integrate them into the strategic monitoring process.
StrategyBlocks calls this functionality calculated KPI’s, where multiple KPI’s with differing time spans can be selected, and an equation can be simply created by any user with appropriate permission. In addition, StrategyBlocks charts this new calculated KPI and treats it independently for linking back into the broader strategic management plan, and therefore provides a more complete view of monitoring total strategic health.
Strategic KPIs versus Housekeeping KPIs
Generally organisations have far too many KPI’s. Large organisations sometimes have hundreds of KPI’s, many of which are seldom used. Often these companies are determined to reduce their volume of KPI’s, to bring in to focus only those “key” performance indicators versus just performance indicators. StrategyBlocks helps in a number of ways:
- Those KPI’s considered to be “strategic” can be flagged and sorted to visually reflect their importance.
- KPI’s are grouped into focus areas, allowing the viewer to collapse those unwanted areas and draw attention to only those relevant measures.
- The primary goal of StrategyBlocks is to align operational activity with organisational vision. The user is encouraged to overlay KPI’s in the relevant locations of the strategic management plan. If a KPI doesn’t fit in the strategy, why are we bothering to monitor it?
Loading KPIs automatically and manually
Nobody wants to reload KPI’s that already exist somewhere in our organisation. StrategyBlocks offers a bridge into existing data sources enabling the automated upload of KPI data. However, sometimes KPI data resides in difficult to access systems, spread sheets, or not at all. For this reason StrategyBlocks has an intuitive KPI data load form for easy input and even allows data in CSV format to be pasted directly into the KPI window.
It's not just about KPIs
Sometimes simply viewing KPI data is just not enough, it needs to be considered alongside a number of other important values, e.g., total progress (effort), financial return, strategic priority, or potential risks. StrategyBlocks takes all this complexity away by rolling it all into a single umbrella measure, Strategic Health.