Metrics that Matter - Key Performance Indicators (KPIs)
- The BI Metrics Framework is a reference document put together by the MAIS BI Team to help facilitate a metrics discussion in a organization.
The biggest challenge for most units is not the technology or the data but determining what metric's matter (what are the appropriate KPI?). Taking key ratios from various reports that have been used in a organziation over time and displaying them graphically is almost certainly not going to result in the correct Scorecard for your organization. To identify the correct KPI, strategic business discussions need to take place with leadership from across the organization. This will involve assessing the organization's high-level strategy, short and long-term goals, and business drivers impacting the execution of the strategy. See Strategy Mapping [1]
- "Basic Metric Framework Definitions"
- Metric is a measure of something.[2]
- Performance Metric is a measure of some activity related to a company's business performance.
- Key Performance Indicator (KPI) is a measure of something that is strategically important to the business. [3]
- Balanced Scorecard [4]. Examples of scorecards used at UM UM Scorecards
- Dashboards [5]. Examples of Dashboards used at UM ... UM Dashboards
You can’t improve what you can’t (or don’t) measure
You could measure a large number of things in your Unit. You could, in fact, spend more time measuring things than doing the work!
- Focus on the major processes your Unit can control or influence that link to your units’ strategy, priority or values statements (see Strategy Mapping).
- Look for industry/University best practices metrics that may apply.
- Ask yourself questions. How can we do this quicker, How can we save money, How can we reduce errors, etc…
- The Goal Question Metric (GQM) approach
- Include others in developing your metrics. Ask yourself and others ... what decisions will you be able to make with this data? How does it support the business?
Select Appropriate Metrics
After you have identified potential metrics you then need to select the metrics that you will begin to generate and report on.
- Evaluate metrics and select those for further action by using a Prioritization Matrix.
- Focus on the major processes your team/unit can control or influence.
- Don’t take on more metrics than your team can handle. Remember you can always come back to them.
For each possible metric, answer the following questions about the data:
- Is it available already?
- How frequently is it available?
- Is it reliable and accurate?
- How/who collects it?
Develop a Metric Prioritization Matrix
A Metric Prioritization Matrix is used to achieve consensus about a potential metric. The Matrix helps you rank metrics by a particular criterion that is important to your team/unit. Then you can more clearly see which metrics are the most important to work on solving first.
Generate Metrics
Once you have identified and selected which metrics you will focus on, you now need to put together a plan for creating and generating your metrics.
- Identify who is responsible for what?
- What’s the objective of the metric?
- How do we calculate the metric?
- Where is the data coming from?
- What type of reports and dashboards will we generate?
Report & Monitoring KPIs
After you have collected all of the required information, you are now ready to start building your reports, dashboards and scorecards. Your team needs to agree how to display your metrics in a simple combined way.
Lessons Learned and Ideas to Facilitate the Development of KPIs
1. Be prepared for the metric's mountain, there will always be an overwhelming volume of potential metrics, but your job is to identify the few that are important to your business processes that impact unit strategy. (Develop a Metrics Definition Template)
2. Rapid Prototyping of reports/dashboards/Scorecards and reviewing regularly with leadership saves time, money and credibility
3. Document all data sources, queries, and methodologies used to generate reports and dashboards
4. Establish a metrics review committee
5. Agree on definitions, calculations and data sources for all metrics used (whether they are performance metrics, or KPIs)
6. Regulary review existing metrics to ensure they are still worth measuring and reporting on
source:http://webservices.itcs.umich.edu/mediawiki
No comments:
Post a Comment