Consider Solutions: What’s So Key About Your KPIs And 5 Must-Dos
Posted: 1 October 2014 | Source: Consider Solutions
KPIs are in wide scale used to measure performance and progress for organizations in general and shared services specifically. As lagging indicators, KPIs are after the fact measures of average performance of a process. KPIs lack the context to provide insight into what factors cause or influence the outcome or, indeed, where the average masks a high distribution of results.
This study was conducted with over 70 shared services executives from North America, Asia and Europe. The results shows that, while KPIs are the dominant tool for performance measurement, a large percentage of organizations are struggling to translate this into performance management.
The key problem seems to be a disconnect between what KPIs measure and how to interpret them to improve performance. To identify actions for improvement, leading indicators are required. These leading indicators comprehend 'what might go wrong' in individual process execution and are the basis of root cause analysis and process improvement activity.