Using KPIs to Keep Performance Improving

Key Performance Indicators (KPIs) are used by organizations both to measure individual detailed performance and to measure overall organization performance.

The Importance of Being SMART

• The acronym of SMART frequently appears when commentators discuss KPIs. It means that KPIs need to be:
  • Specific
  • Measurable
  • Agreed to
  • Realistic
  • Timely

• Specific

  KPIs need to be specific to individual information and if possible expressed as statements of actual on-the-job behaviors or quality terms.

• Measurable

  KPIs must be quantifiable to a large extent that is based on information that can be observed and historized. They should also provide ongoing feedback on standard of performance.

• Agreed to

  Always remember that performance management needs to be an open, two-way communication process. KPIs that are imposed without genuine prior consultation are risking failure, the best you can usually hope for is some level of 'compliance'.

• Realistic

  Each KPI needs to provide feasible deviations from an optimum. It does not make sense to impose unreachable targets.

• Timely

  For each KPI it has to be defined how frequent it is to be measured. Depending on the content of the KPI this can vary from minutes to months. It is important to understand which period delivers best results.

BeauTec Indicators

• Taking the right decision is a difficult job and requires enough and valid information. Knowing pro-active in which domains decisions have to be taken is even more difficult. Having indicators in place, automatically monitoring key information and providing instant notification in case of problems dramatically reduces this work.
  Building hierarchical structures of KPIs to aggregate status information for complex domains provide high-level alerts on a central screen to indicate an issue. Intuitive navigation through the hierarchy of indicators is used to identify the concrete issue with a few mouse clicks.
  To define indicators, it is important to know how the tracked information is defined. Knowing absolute scales, potential optima and warning or error limits, as well as unit of measure or whether the value is linear or not is important. Defining an indicator and its respective limits can be in absolute units, relative to the optimum or other values and even complex dynamic formulae.
  The BeauTec Indicators provide a wide range of different KPI classes to allow the customer to select the type, which fits best to the related information.
  As an open object oriented standard is used, even KPIs with unlimited numbers of valid, warning or error ranges can be defined. New KPI classes can easily be defined and derived from existing base functionality.
  Providing a normalized and weighted result for each indicator, KPI aggregations can either be calculated on KPI state or severity by these normalized results, making all KPIs comparable.
  Having KPIs set up, individual limits might be adapted over time to adjust and optimize correct treatment. As all parameters are time based, changes done by the KPI administrator are stored at a given point in time still providing the correct former results for the past.
  As certain KPIs might be very important, one wants to be instantly informed about problems. Each KPI can be configured and automatically checked on over- or under-runs within a certain period. If a problem occurs, automatic alerts and notification is launched for certain users or user groups by email, SMS, on pagers, etc.
  Providing escalation features is also supported, sending e.g. an email to additional people only if the problem persists for a certain time frame or occurs n-times in a row.
  BeauTec strictly separates business integration and information visualization. Therefore results from KPIs can presented to the user in any shape and environment. Using the BeauTec solution, standard presentations are provided within the BeauTec Explorer, WebParts, Web-Plug-Ins or Applets. Results from KPIs can also natively be reported in Excel and are generally accessible from the BeauTec Integration Platform.