CERTIFIED

KEY PERFORMANCE
INDICATORS PROFESSIONAL
Towards the use of a rigorous KPI Measurement Framework
13th – 15th of October 2015 | Khartoum | Republic of Sudan

Ahmed Samy
The KPI Institute

The Fairmont Dubai, 21st floor, Office 2103 – Suite 13

PO Box 119724, Dubai, United Arab Emirates
T: +971 4 311 6556 | M: +971 56 427 9177
E: [email protected] | W: www.kpiinstitute.org
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KEY RESOURCES

ADDITIONAL RESOURCES CONTACT DETAILS

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© The KPI Institute 2015 3
© The KPI Institute 2015 4
RESEARCH

At the core of smartKPIs.com is an An online magazine containing more

online catalogue of over 20,000 KPI than 1,000 articles on topics like
examples from 16 business strategy, Balanced Scorecard, KPI,
functional areas and 25 industries. organizational performance.

An online catalogue A platform for The most

illustrating the use of integrating performance comprehensive online
corporate identity management knowledge resource dedicated to
elements in practice. at all levels. the Balanced Scorecard.

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PUBLICATIONS
Top KPIs Reports by Top KPIs Reports by The KPI Dictionaries
Functional Area Industry 3 Books
54 Reports 57 Reports

Details at: http://kpiinstitute.org/publications/

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EDUCATION
Certified Strategy and Business Certified Data Visualization
Planning Professional Professional

Certified Benchmarking
Certified KPI Professional
Professional

Certified Performance Certified Supplier

Improvement Professional Performance Professional

Certified Employee Certified Personal

Performance Professional Performance Professional

Certified Data Analysis Certified Customer Service

Professional Performance Professional

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EDUCATION

Source: The KPI Institute (2015)

© The KPI Institute 2015 8

EDUCATION

Source: The KPI Institute (2015)

© The KPI Institute 2015 9

OUR CLIENTS
In-house training and advisory services
Telecommunications Chemicals Public Authority

Aviation Utilities Financial Services

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OUR CLIENTS
Open Courses
Manufacturing Chemicals Public Authority

Aviation Healthcare Financial Services

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 CERTIFICATION PROCESS
Needs assessment Action plan Forum discussions
1 week before core-course Within 3 days after the core-course Within 3 weeks after the core-course

After-course stage

Pre-course evaluation quiz Webinar “Performance

1 week before core-course Improvement Essentials”
Within 3 weeks after the core-course

Core-course stage
Certification Exam

Guidance and schedule In-house presentation

Pre-course stage

1 week before core-course Within 3 weeks after the core-course

Participation at on-site
training
Forum introduction Additional reading
1 week before core-course Within 3 weeks after the core-course

Expectations Pre-requisite reading Learning journal

1 week before core-course 1 week before core-course Within 3 weeks after the core-course

The certification process is finalized only when you complete all of the 3 stages of the learning experience. You will receive:
• Certificate of Completion: after completing pre-course activities and passing the Certification Exam;
• Certificate of Attendance: after participating at the 3 days of on-site training course;
• Certified KPI Professional diploma: after you have successfully completed all of the 3 stages of the learning experience.

© The KPI Institute 2015 12

CERTIFICATION PROCESS
Pre-course stage activities:
1. Needs assessment: complete a survey so that we can offer you a relevant and tailored learning experience
2. Pre-course evaluation quiz: take a quiz in order to get an overview of the level of knowledge you have on the course topic
3. Guidance and schedule: analyze a document presenting guidelines on how to maximize your learning experience
4. Forum introduction: introduce yourself on the forum and interact with the rest of participants from the course
5. Expectations: share your expectations regarding the training course on the forum
6. Pre-requisite reading: go through a series of documents to better understand the face to face training content

Core-course stage activities:

7. Participation at on-site training course: attend the 3 days of training course
8. Certification exam: take and pass the exam that contains 75 questions; necessary score to pass is minimum 50

After-course stage activities:

9. Action plan: create a plan for the actions and initiatives you intend to implement after the training-course
10. Forum discussions: initiate a discussion and contribute in a discussion opened by another participant
11. Webinar: watch the Performance Improvement Essentials webinar and share:
• 3 key learning points you got from the webinar

• 1 action you intend to take in order to improve your current activities

12. In-house presentation: create and submit a short PowerPoint presentation to present your colleagues the knowledge you
have accessed during the training course (~30 slides)
13. Additional reading: go through a series of resources to expand your content related knowledge
14. Learning journal: reflect upon your 3 stages learning experience and complete a journal

© The KPI Institute 2015 13

AGENDA
DAY 1 DAY 2 DAY 3

The World of KPIs Data Gathering

Working with Targets

Understanding KPIs KPI Documentation

Data Visualization

KPI Typology KPIs Alignment

Review &
KPI Taxonomy Certification
KPI Selection Exam
© The KPI Institute 2015 14
LEGEND
Key learning points Case study Session review

Exercise Video References

© The KPI Institute 2015 15

LEARNING OBJECTIVES

• Differentiate between objectives, KPIs and initiatives;

• Apply best practice techniques to KPI selection;
• Understand KPI selection in different contexts;
• Document KPIs in a standardized template;
• Learn when and how to use benchmarking in target setting;
• Optimize the KPI activation and data gathering process;
• Enhance the use of data through effective data visualization.

© The KPI Institute 2015 16

LEARNING OBJECTIVES
Learn when
Differentiate Optimize the Enhance the
SESSIONS Apply best Understand Document KPIs and how to
between KPI activation use of data
practice KPI selection in a use
vs objectives,
techniques to in different standardized benchmarking
and data through
KPIs and gathering effective data
OBJECTIVES KPI selection contexts template in target
initiatives process visualization
setting
S1: The World of KPIs
S2: Understanding KPIs
S3: KPI Typology
S4: KPI Taxonomy
S5: KPI Selection
S6: KPIs Alignment
S7: KPI Documentation
S8: Working with
Targets
S9: Data Gathering
S10: Data Visualization

Performance Interpersonal Result

COMPETENCIES Management
Data Analysis
relations
System Thinking
Oriented

© The KPI Institute 2015 17

AGENDA

1 The World of KPIs 1. Challenges in performance measurement

2. The value added by KPIs
3. Organizational levels
4. KPI concept map
5. Governance

Key Learning Points

1. Identify main challenges in performance measurement;

2. Understand the role of business performance measurement systems;
3. Acknowledge 6 arguments to get buy-in for a KPI implementation project.

© The KPI Institute 2015 18

 CHALLENGES IN PERFORMANCE MEASUREMENT

Which are the major challenges:

• You are interested in addressing?

• Your organization/ team is facing?

• Are relevant to the practice overall?

© The KPI Institute 2015 The

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 CHALLENGES IN PERFORMANCE MEASUREMENT
What is the most challenging aspect of working
with KPIs?
60.00%
51.26%
50.00%

40.00%

30.00%

20.00% 14.83% 13.88%

10.09% 9.94%
10.00%

0.00%
Selecting the right Gathering data for Documenting KPIs Root cause analysis Decision making
KPIs KPIs clearly and based on KPI
concisely results

© The KPI Institute 2015 The

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PERFORMANCE MEASUREMENT VS PERFORMANCE
MANAGEMENT
Performance Measurement = Performance Management =
evaluation and assessment of results. taking action based on the results of the
evaluation to ensure targets achieved.

1. Sub-process of performance 1. The overarching discipline that deals

management with performance.
2. Focuses on the 2. Reflects the approach one entity has
identification of KPIs towards performance
tracking of KPIs 3. Includes sub-processes such as:
communication KPIs results The formulation of a plan
Actively monitoring
implementation
Readjusting the plan
Performance measurement
Capability development

© The KPI Institute 2015 The

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KPI Typology KPI Taxonomy KPI Alignment
of KPIs
of KPIs KPIs Selection Documentation Targets Gathering Visualization Review
THE VALUE ADDED BY KPIS
Improvement

Clarity Focus
Communication

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THE VALUE ADDED BY KPIS
CLARITY • Provide a detailed numerical view of which are the desired results aimed to be achieved

• Facilitate line of sight by mapping contribution to success across organisational levels

FOCUS • Convey what matters

• Convey what requires attention

IMPROVEMENT • Objectively evaluate the level of achievement of desired results

• Readily available data which accelerates corrective action initiation

ENGAGEMENT • Lead to a sense of ownership through responsibility and accountability

• Motivate in achieving better results
• Contribute to building a performance culture

COMMUNICATION • Provide common understanding of the numbers that matter

• Enables precise stakeholder communication
• Demonstrate interest and ability to use state of the art management concepts

LEARNING • Enable comparison of results in time, to reflect trends

• Identify opportunities by comparing to others
• Lead to a better understanding of the business

© The KPI Institute 2015 The

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of KPIs KPIs Selection Documentation Targets Gathering Visualization Review
MAIN ROLES OF BPM SYSTEMS

70%
59%
60%
50%
41% 41% 41%
40% 35%
29%
30% 24%
20% 18% 18%
12% 12%
10% 6% 6% 6%
0%

Source: Adapted from Franco-Santos, M., Kennerley, M., Micheli, P. et al (2007)

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of KPIs KPIs Selection Documentation Targets Gathering Visualization Review
MAIN FEATURES OF BPM SYSTEMS

60%
53%
50%

40% 35%
29%
30% 24%
20%
12% 12% 12% 12%
10%

0%

Source: Adapted from Franco-Santos, M., Kennerley, M., Micheli, P. et al (2007)

© The KPI Institute 2015 The

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of KPIs KPIs Selection Documentation Targets Gathering Visualization Review
TERMS & TOOLS LINKED TO “PERFORMANCE”
Budgets
Communications
Dashboards
Discussions
Forums
Goals

KPIs A better structure, alignment, integration

Meetings
Objectives and use of what is already in place is the
Performance reviews answer to improve performance
Plans
Projects
management practices.

Reports
Rewards
Scorecards
Targets
Technology
Training

© The KPI Institute 2015 The

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KPI Typology KPI Taxonomy KPI Alignment
of KPIs
of KPIs KPIs Selection Documentation Targets Gathering Visualization Review
INTEGRATION OF TOOLS WITHIN A PERFORMANCE
MANAGEMENT SYSTEM
Organizational and
Individual Level
Departmental Level

Individual performance
System Map
plans
Desired State of
Evolution Performance
evaluations
Strategy Map
Performance
conversations
Performance Scorecard
Organisational KPI
Catalogue Personal Level
Portfolio of Initiatives
Personal performance
Dashboard plans
Performance review
meetings Performance reviews

Source: http://commons.wikimedia.org/wiki/File:Fleischwolf-zerlegt.jpg
Photo taken by: Kku, Modified by: Rainer Zenz

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SYSTEM INTEGRATION

ORGANIZATIONAL STRATEGY

INTEGRATED PERFORMANCE
OUTCOMES
MANAGEMENT SYSTEM

OUTCOMES

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 IDENTIFY PERFORMANCE MANAGEMENT TOOLS

Match Description No. Tool

80% 1 Goal
# Customers 2 KPI
% Customer satisfaction 3 Initiative
Customer Service Development Program 4 Metric
Complete 50% of the trainings by 30 June 5 Milestone
Identify key competencies to improve for Customer
6 Mission Statement
Service representatives
Integrity 7 Program
Increase customer satisfaction 8 Objective

Growth for the business 9 Target

Quality 10 Task
To be the world’s leading company, focused on
11 Value Driver
maximizing the value we provide to our stakeholders
Customer Service Training 12 Value Statement
To support long-term client partnerships, by delivering
13 Vision Statement
high quality services.

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ORGANIZATIONAL LEVELS
Organizational

• Overall
organizational Departmental
objectives

Team

• Departmental (operational) or sub- Employee

departmental (team) processes, aligned
to organizational strategy
• Performance
expectations aligned to
departmental and
organizational objectives

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SYSTEM INTEGRATION
PERFORMANCE MANAGEMENT SYSTEM ARCHITECTURE

Source: The KPI Institute (2014)

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1. DESIRED STATE OF EVOLUTION

Source: The KPI Institute (2014)

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2. STRATEGY MAP

Source: The KPI Institute (2014)

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3. PERFORMANCE SCORECARD

Source: The KPI Institute (2014)

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4. PERFORMANCE DASHBOARD

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5. KPI DOCUMENTATION FORM

Source: The KPI Institute (2014)

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6. KPI REPORT FORM

Source: The KPI Institute (2014)

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7. PORTFOLIO OF INITIATIVES

Source: The KPI Institute (2014)

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8. INITIATIVE DESCRIPTION FORM

Source: The KPI Institute (2014)

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MAIN PROCESSES OF BPM SYSTEMS
60%
53%
50%

40%
29% 29%
30%

20% 18% 18%

12% 12% 12% 12% 12%
10%

0%

Source: Adapted from Franco-Santos, M., Kennerley, M., Micheli, P. et al (2007)

© The KPI Institute 2015 The

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KPI Typology KPI Taxonomy KPI Alignment
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KPI MANAGEMENT FRAMEWORK CONCEPT MAP

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KPI MEASUREMENT FRAMEWORK GOVERNANCE

Top • Promote
Management • Support

• Design
• Implement
Strategy / • Assume
• Maintain
Performance Office ownership of
targets
• Collect data
• Report data

Department Department Department

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KPI ARCHITECTURE SKILLS
Performance Performance
Data Research Measurement
Architecture Management

Analysis Synthesis Strategy Data visualization

Software MS XLS Coaching Facilitation

Technology MS PPT Communication Interpersonal

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 SESSION REVIEW
1. Most common challenge: KPI selection
2. Why use KPIs?
• Clarity
• Focus
• Improvement
• Engagement
• Communication
• Learning

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 REFERENCES
• Franco-Santos, M., Kennerley, M., Micheli, P., Martinez, V., Mason, S., Marr, B., Gray, D. and Neely, A.
(2007), Towards a definition of a business performance measurement system, International Journal of
Operations and Production Management, 27(8): 784-801. Available at:
https://dspace.lib.cranfield.ac.uk/bitstream/1826/2789/1/Towards%20a%20definition%20of%20busines
s%20performance%20measurement%20system.pdf

Images:
• The KPI Institute (2014), Human Resources Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/hr-performance-management-system-toolkit.html

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AGENDA

2 Understanding KPIs 1. KPI related terminology

2. SMART objectives decomposed
3. KPI lifecycle

Key Learning Points

1. Define objectives, KPIs and initiatives according to terminology standards;
2. Develop SMART objectives;
3. Identify the stage of KPI lifecycle.

© The KPI Institute 2015 46

KPI RELATED TERMINOLOGY
• Key Result Areas KPIs – to evaluate performance
(KRAs); OPTION 1
Metrics – to inform decisions
• Key Performance
Indicators (KPIs);
• Performance
Indicators (PIs);
• Measures;
• Metrics;
• Key Result Indicators OPTION 2 KRAs KPIs PIs Measures
(KRIs);
• Analytics;
• Evaluation criteria.

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METRICS – KPIS- KRIS - ANALYTICS

Metrics
Measurement

KPIs KRIs
Performance Risk
Assessment Assessment

Analytics
Decision Making

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KPIs Selection Documentation Targets Gathering Visualization Review
METRICS
# Air temperature

# Air humidity

# Air purity

# Square meters per room

# Employees

# Highway kilometres

# Employee age

# Working hours per year

$ Budget

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KPIs Selection Documentation Targets Gathering Visualization Review
KEY PERFORMANCE INDICATORS
% Net promoter score

% Budget variance

% Hotel occupancy rate

$ Revenues

$ Operating costs

# Time to process requests

# Orders delivered per vehicle

Source: Spider Strategies (2015)

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KPI Typology KPI Taxonomy KPI Alignment
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KPIs Selection Documentation Targets Gathering Visualization Review
KEY RISK INDICATORS
• Key risk indicators are metrics used by organizations to provide an early
signal of increasing risk exposures in various areas of the enterprise.
Objective: Manage the collection of accounts receivable to reduce loss due to write-offs
Key Performance Indicator (KPI) Key Risk Indicator (KRI)
Analysis of reported financial results for the company’s 25 largest
Data about write-offs of accounts in most recent month, quarter,
customers or general collection challenges throughout the industry
year.
that highlight trends signaling future collection concerns.

$ Write-offs of accounts % Large customers in financial difficulty

Linking Objectives to Strategies to Risks to KRI’s

Strategic Potential Risk KRI

KPI
Initiative #1
Increase
Revenues Potential Risk KRI
Strategic
KPI
Initiative #2
Potential Risk KRI
Profitability
Strategic
KPI
Initiative #3 Potential Risk KRI
Reduce Costs
Strategic Potential Risk KRI
KPI
Initiative #4

Source: Beasley, M. S., Branson, B. C. and Hancock, B. V. (2010)

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ANALYTICS
Refers to extracting key information from large volumes of data in
order to:
• predict future trends
• identify patterns Support decision making

Source: Google (2015)

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KPIs Selection Documentation Targets Gathering Visualization Review
 IDENTIFY THE KPIS
1. % Employee satisfaction
2. $ Turnover
3. Finalise project by 31 December
4. # Clients from referrals
5. # Employees
6. % Projects delivered on time and on budget
7. Quality
8. % Defect rate
9. $ Budget
10. Increase market share to 28%

KPI Definition:
A measurable expression for the achievement of a desired level of results in an area relevant
to the evaluated entity’s activity.
(The KPI Institute)
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SMART OBJECTIVES DECOMPOSED
Option 1: Increase market share to 28% by the end of the financial year
under Marketing Director coordination.
Option 2:

• Increase market share

Objective
• % Market share
KPI
• 28% 2
Target
• By financial year end
Time
• Marketing Director
Owner

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TERMINOLOGY STANDARDS
Objectives KPIs Initiatives
start with start with start with

$ = Value of

Verb # = Number of Noun

% = Percentage of

Increase customer CRM software

$ Revenue per client
satisfaction implementation

# Complaints received

% Customer satisfaction

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 ANALYZE PANAMA CANAL AUTHORITY
CORPORATE GOALS 2009
“Corporate Goal 1 – To obtain profit before interest, taxes, depreciation and amortization (EBITDA) ≥
B/.1,110 million up to September 30, 2009.

Corporate Goal 2 – To establish a new pricing structure up to September 30, 2009 depending on the phases
established in the work plan.

Corporate Goal 3 – To provide a preliminary report of the Technical Cooperation Project up to September
30, 2009.

Corporate Goal 4 – To implement planned activities for the Third Set of Locks Project up to September 30,
2009, in compliance with the milestones of the established schedule.

Corporate Goal 5 – To make optimal use of the existing plant to meet transit demands, ensuring a service
level compliance average ≥ 85 percent.”

“Corporate Goal 6 - To adapt the organization through the improvement of the processes identified up to
September 30, 2009.

Source: Panama Canal Authority (2009)

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 ANALYZE PANAMA CANAL AUTHORITY
CORPORATE GOALS 2009
Corporate Goal 7 – To implement 100.0 percent the activities of the Sustainability and Corporate Social
Responsibility Action Plan scheduled for fiscal year 2009.

Corporate Goal 8 – To develop the Monitoring and Evaluation Plan for Sustainable Development and
Integrated Management of Water Resources for the Panama Canal Watershed up to September 30, 2009.

Corporate Goal 9 – To prepare a talent management plan and to provide a generational shift and to meet
emerging needs in the operation up to September 30, 2009.

Corporate Goal 10 – To improve the working environment ≥ 5.0 percent, measured by a satisfaction,
commitment and work climate survey up to September 30, 2009.

Corporate Goal 11 – To ensure that the Corporate Performance Index (CDI) is ≥ 100, up to September 30,
2009.”

Source: Panama Canal Authority (2009)

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KPIs Selection Documentation Targets Gathering Visualization Review
 ANALYZE PANAMA CANAL AUTHORITY
CORPORATE GOALS 2013
Positive examples:

“Objective 1 - To increase profitability in a sustainable manner for the benefit of the

country.

Objective 2 - To expand the range of services and products.

Objective 3 - To enhance good corporate governance.

Objective 4 - To efficiently manage the volume and quality of the water resources of the
Panama Canal Watershed.

Objective 5 - To increase productivity through excellence in performance and the wellbeing

of human resources”

Source: Panama Canal Authority (2013)

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KPI LIFECYCLE
KPI lifecycle – Stage 1 KPI lifecycle – Stage 2 KPI lifecycle – Stage 3
Establishment Use Evolution

• Needs identification

• Selection

• Documentation

• Visualization

• Activation • Data gathering

• Analysis • Analysis

• Reporting • Reporting • Maintain

• Decision making • Decision making • Refresh

• Communication • Communication • Conserve/Suspend

• Documentation refresh • Documentation refresh • Supercede

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 SESSION REVIEW
1. KPI definition: a measurable expression for the achievement of a desired
level of results in an area relevant to the evaluated entity’s activity.
2. Terminology standards:
• Objectives - Verb
• KPIs - Symbols (#, %, $)
• Initiatives - Noun.
3. KPI lifecycle:
• Establishment
• Use
• Evolution

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 REFERENCES
• Beasley, M. S., Branson, B. C. and Hancock, B. V. (2010.), Developing Key Risk Indicators to
strengthen enterprise risk management: How Key Risk Indicators can sharpen focus on emerging
risks. Available at: http://www.coso.org/documents/COSOKRIPaperFull-
FINALforWebPostingDec110_000.pdf
• Panama Canal Authority (2009), Annual report. Available at:
http://www.pancanal.com/eng/general/reporte-anual/
• Panama Canal Authority (2013), Annual report. Available at:
http://www.pancanal.com/eng/general/reporte-anual/

Images:
• Google (2015), Google Analytics. Available at: http://www.google.com/analytics/
• Spider Strategies (2015), QuickScore. Available at: http://www.integerperform.com/kpi-
dashboard-balanced-scorecard-software/

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AGENDA

3 KPI Typology
1. Leading vs lagging KPIs
2. Qualitative vs quantitative KPIs
3. Efficiency vs effectiveness KPIs

Key Learning Points

1. Differentiate leading and lagging KPIs in different contexts;

2. Define efficiency and effectiveness;
3. Use the variety of KPI typologies to enhance the KPI selection process.

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LEADING VS LAGGING KPIS
Leading indicators = measure
Vs. Lagging indicators = look back at
things that address what can
past performance
create future value

• “outcomes, forward-looking • “measures events / incidents

indicators” and consequences,
retrospective”
Advantage:
Advantage:
• Being predictive allows the
• Easy to identify and to measure
organization to take better / collect results.
decisions to address future
events.
Challenge: Challenge:
• May be difficult to identify • Indicates past performance,
and capture results. does not reflect current
Source: International Association of Oil & Gas Producer (2011) activities.
International Customer Management Institute (n.d)

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 LEADING VS LAGGING KPIS
Task:
• Cluster the following examples into leading and lagging
KPIs.
No. KPI examples
1 % Employee engagement
2 % Customers from referrals
3 % Customer satisfaction
4 % Market share
5 $ Profit
6 % Returning customers
7 # Service lead time
8 % Staff with competencies at desired level

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QUALITATIVE VS QUANTITATIVE KPIS
Qualitative data - descriptive data, narrative
• Interviews
• Focus groups
• Observation sessions

Qualitative Data ≠ Qualitative KPIs

Quantitative data - numbers and statistics

• Calculation
• Surveys

Source: WACOSS (2011)

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QUALITATIVE KPIS?
Provide timely high-quality advice
meeting ministerial expectations
• % Advice provided on time
• # Versions for advice reports
• % Satisfaction with advice

NCOS implementation
NCAT implementation

Ensure timely and smooth

processing of applications

• % Applications processed in
SLA
• % Applications processes
correctly first time
• # Average delay in processing
applications
Source: Australian Federal Government (2011)

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QUALITATIVE VS QUANTITATIVE KPIS
“Quantitative KPIs are likely to be based on system collected statistics
such as number of users whereas qualitative KPIs may be based on more
subjective measurements from user interviews and surveys.”
Public Record Office Victoria, Australia (2010)

All KPIs are quantitative, but they can measure different aspects of an
objective, such as:

• Volume - # Products sold

• Quality - % Products error rate, % Customer satisfaction with
products bought
• Monetary values - $ Sales

Source: Public Record Office Victoria, Australia (2010)

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 IDENTIFY THE KPIS REFLECTING QUALITY
Find in the below list the KPIs that reflect quality as perception.

1. % Employee turnover
2. # Production cycle time
3. # Brand image index
4. # Customer satisfaction score
5. % Projects delivered on time and on budget
6. % Error rates
7. % Employee engagement
8. $ Operating costs
9. % Market share
10. # Service quality rating

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EFFICIENCY VS EFFECTIVENESS KPIS

Effectiveness

Desired
Inputs Processes Outputs Outcomes
output/outcome

Efficiency

Source: Adapted from Australian National Audit Office (1998)

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EFFICIENCY VS EFFECTIVENESS KPIS
Effectiveness = the extent to which Efficiency = extent to which time,
a desired outputs or outcomes is effort or cost are well used for the
achieved. desired results.

KPI examples: KPI examples:

Sales Cost per call
Customer satisfaction index Time to process requests
Compliance with quality Equipment utilization rate
standards

Do the right thing! Do things right!

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 ANALYZE WESTERN AUSTRALIA POLICE KPIS
Key Efficiency KPIs
Maintain lawful Traffic law
Emergency Investigation of
behavior and Judicial process enforcement and
management offences
prevent crime management
Cost
Cost of service ($) Cost of service ($) Cost of service ($) Cost of service ($) Cost of service ($)
Average cost per Average cost per Average cost per Average cost per
Average cost per
hour for providing hour for providing response / hour for providing
guilty plea($)
services ($) services ($) investigation($) services ($)
Timeliness
General calls for Emergency calls for
police assisstance police assistance
answered in 20 answered in 20
seconds seconds
Average time taken
to respond to urgent
calls for police
assistance

Source: Adapted from Western Australia Police (2005)

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 ANALYZE WESTERN AUSTRALIA POLICE KPIS
Key Effectiveness KPIs
Outcome 1: Lawful Outcome 2: Offenders
Outcome 3: Lawful road-user
behavior and community apprehended and dealth with
behavior
safety accordance with the law
Community satisfaction Community satisfaction with police Community satisfaction with
KPI 1 with police services services police services
Community perception of Community perception of level of
KPI 2 level of crime crime
Emergency management
KPI 3 preparedness
KPI 4 Selected offences cleared Selected offences cleared
Support judicial processes Support judicial processes
resulting in successful resulting in successful
KPI 5 prosecutions prosecutions
KPI 6 Road-user behavior Road-user behavior
Community perception of Community perception of
KPI 7 road behavior road behavior

Source: Adapted from Western Australia Police (2005)

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 SESSION REVIEW

1. Leading or lagging ? – depends on the context

2. Qualitative or quantitative? – all KPIs are quantitative

3. Efficiency – do the things right!

Effectiveness – do the right thing!

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 REFERENCES
• Australian Federal Government (2011), Department of Climate Change and Energy Efficiency annual
report 2010–11. Available at: http://www.climatechange.gov.au/about-us/annual-reports/annual-
report-2010-11
• Australian National Audit Office (1998), Better practice principles for performance information,
available at: http://www.anao.gov.au/Publications/Better-Practice-Guides
• Charted Accountants Professionals Canada (2010), Performance indicators. Available at:
http://www.camagazine.com/archives/print-edition/2010/march/regulars/camagazine34812.aspx
• International Association of Oil & Gas Producer (2011), Process safety – recommended practice on
Key Performance Indicators. Available at: http://www.ogp.org.uk/pubs/456.pdf
• International Customer Management Institute (n.d.), Leading and Lagging Indicators. Available at:
http://www.icmi.com/files/ICMILeading_LaggingIndicatorsExplained.pdf
• Public Record Office Victoria, Australia (2010), Strategic management guidelines: Key Performance
Indicators. Available at: http://prov.vic.gov.au/wp-content/uploads/2011/05/1010g3.pdf
• WACOSS (2011), Qualitative vs. quantitative data collection. Available at:
http://www.wacoss.org.au/CommunitySectorFundingReform/Resources/Fundingreformconsidering/
QualitativeQuantitative.aspx
• Western Australia Police (2005), General Audit. Available at:
http://www.police.wa.gov.au/LinkClick.aspx?link=PDFs/AR05_Performance.pdf&tabid=935

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AGENDA

4 KPI Taxonomy 1. Interdisciplinary systemic worldview

2. KPI use case scenarios
3. KPI DNA Map

Key Learning Points

1. Integrate KPIs into the bigger picture;
2. Identify at least 5 different contexts in which KPIs can be used;
3. Understand the multiple facets of measuring objectives.

© The KPI Institute 2015 75

INTERDISCIPLINARY SYSTEMIC WORLDVIEW

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KPI USE CASE SCENARIOS
1 Organizational strategy

2 Organizational operations tracking

Strategy Management
3 Departmental strategy

4 Departmental operations tracking

5 Alliances / Joint ventures relationship scorecard

Interlink Level 6 Portfolio management

7 Project management

8 Quality / process management

Operations Management 9 Service level agreements

10 Supplier performance management

Individual Performance 11 Employee performance management

12 Fitness training
Personal Performance
13 Personal performance management

14 Sustainability performance reporting

15 Benefits realization management

Evaluation 16 General strategic / operations reporting

17 Audit

18 Compliance reporting (micro and macroeconomic level)

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1. ORGANIZATIONAL STRATEGY
Context: Scorecards to monitor the achievement of strategy, through KPIs.

Positive aspects: KPIs are monitored in 5 perspectives: Financial, Customer, Operations and
People. Traffic lights are used to enable immediate understanding of performance data.
Recommendations: Link KPIs to more specific strategic objectives, not only to goals.
Comments: The scorecard contain some of the most important fields to track performance.
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2. ORGANIZATIONAL OPERATIONS STRATEGY
Context: Dashboards to provide a more detailed overview of corporate performance.

Source: KPI Institute (2014)

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3. DEPARTMENTAL STRATEGY
Context: Scorecards to monitor strategy at operational level.

Source: KPI Institute (2014)

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4. DEPARTMENTAL OPERATIONS TRACKING
Context: Dashboards to offer visibility into key processes.

Positive aspects: KPIs

are visualized in both
tables and graphs with
the purpose to enhance
data meaning.

Recommendations:
Cluster KPIs around key
processes or activities.

Comments: The interactivity of the dashboard enables managers to access

different data sets with ease, supporting timely decision making.
Source: Godrejinfotech.com (2010)

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5. ALLIANCES / JOINT VENTURES RELATIONSHIP
SCORECARD
Context: Scorecards to monitor performance of alliances or other business
partnerships.

Positive aspects: KPIs are linked to clear objectives established for the alliance.
Recommendations: Standardize KPI names and allocate a section to comment KPI results.
Comments: Key value drivers for the alliance were identified, such as relationship value or
strength that cluster the scorecard objectives and help managers focus on what matters the
most.
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6. PORTFOLIO AND PROJECT MANAGEMENT
Context: KPIs to monitor the performances in
terms of managing more projects.

Positive aspects: KPI results are displayed

through graphs, in the format of a dashboard.

Recommendations: Replace pie charts, with

more effective data visualization tools;

Comments: Dashboards are very useful in

managing a portfolio of projects as they provide
key information in order to ensure initiatives are
finalized on time, within budget and resources
are used efficiently.

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7. PROJECT MANAGEMENT

Source: SmartKPIs.com (2015)

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8. QUALITY / PROCESS MANAGEMENT
Context: KPIs to measure quality and compliance with standards, as well as to
support process optimization.

Positive aspects: Process

mapping is used to
standardize activities and
to support process
optimization.

Recommendations:
Establish KPIs to assess
the quality of processes.

Source: Adapted from Oak Ride Institute for Science and Education (2005)

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8. QUALITY / PROCESS MANAGEMENT
Process improvement

Wait Time (non

value add)
Before

Work Time (value After

add)

Capacity

Cost Cash flow

Defects Customer satisfaction

Lead time Customer responsiveness

Inventory On time delivery

Space Productivity

Waste! Profit
Quality

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9. SERVICE LEVEL AGREEMENT (SLA)
Context: KPIs to ensure the quality of services delivered – whether is about third
party providers (suppliers) or internal providers (departments, divisions).

Positive aspects: Clear targets

are established for each
performance measure.

Recommendations:
Standardize KPI names for more
clarity.

Comments: Internal SLAs can

be used for both internal and
external providers.

Source: Texas State University (n.d)

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10. SUPPLIER PERFORMANCE MANAGEMENT
Context: KPIs to monitor performance of supplier, for a streamlined supply chain.
a) 3 Perspectives b) 8 Categories c) 24 Indicators
Compliance with client requirements
Outcomes Quality and severity of defects
The objectives of the engagement were achieved
Outcome performance Timely delivery schedule
Schedule Ability to meet interim milestones
Ability to complete work within agreed upon budget
Ability to control costs / Cost improvements over time
Budget
Value for money / Competitiveness of pricing
Provides effective and timely communication
Service and product delivery problems were quickly resolved
Communication
Documentation requirements / Understanding of business requirements
Innovative in helping delivering solutions
Delivery performance
Value add/Innovation Understanding of the client’s business processes and practices
Understanding of the industry and market and how it applies to VG
Technical skills and experience
Delivery capability Personnel quality (i.e. independence and thoroughness)
Overall project management
Reasonable negotiations and contract, ease of doing business
Effective, accurate and efficient billing system
Responsiveness /
Account Management Flexible, accessible and responsive to inquiries
Service excellence
Overall satisfaction with vendor deliverables and services
Professional and cooperative behaviour with the client personnel
Client satisfaction Work ethic, flexibility and responsiveness

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11. EMPLOYEE PERFORMANCE MANAGEMENT
Context: KPIs and scorecards to evaluate performance of each employee in the
organization.

Source: KPI Institute (2015)

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12. FITNESS TRAINING
Context: KPIs to track performance of athletes.

Positive aspects: The

dashboard allows target
setting for KPIs and enables
you to visualize progress in
time.

Comments: A clear
perspective on current fitness
performance contributes to
better planning workouts.

Source: Body Media Fit (2015)

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13. PERSONAL MANAGEMENT
Context: KPIs to monitor personal achievements, to track daily activities, to
improve time management.

Positive aspects: It provides an instant

overview upon the performance achieved in
several personal areas.

Recommendations: Structure the KPIs under

objectives and assign specific targets that
need to be attained.

Comments: Common personal areas to be

monitored are finances, household
management, professional development,
time management, social activity –
interactions with friends and family.

Source: Felton, N. (2013), Annual report

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14. SUSTAINABILITY PERFORMANCE REPORTING
Context: KPIs to assess the environmental impact of
activities. Results are presented in sustainability scorecards
or in dedicated performance reports.

Positive aspects: there is a trend in representing

performance data in annual reports through infographics.

Recommendations: Structure the KPIs under

sustainability objectives and outline specific targets that
are desired.

Comments:
Transparency in KPI
results can positively
contribute to brand
image.

Source: Apple (2011)

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15. BENEFITS REALIZATION MANAGEMENT
Context: Benefits realization is an important part of project management and
should rely on KPIs that clearly outline expected benefits.

Positive aspects:
KPIs are accompanied by
target values.

Recommendations: KPI
names should be
standardized.

Comments: benefits
realization management
through KPIs provides the
necessary visibility in
assessing investment
projects.
Source: Western Australia Department of Treasury and Finance (2005)

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16. GENERAL OPERATIONAL REPORTING
Context: KPIs are commonly used by departments or teams to report the
performance of their activities.
Positive aspects: KPI results are accompanied by comments to facilitate
understanding of current performance level.

Recommendations:
Structure the KPIs under
sustainability objectives
and outline specific
targets that are desired.

Comments:
Operational reporting
must be focused on
providing essential data
for decision making.

Source: Clebsch, B., Dougherty, J. D., and Anderson, G. (2004)

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17. AUDIT
Context: KPIs can be used to assess the quality of the audit department, but also to
analyze how an organization is coordinated.

• The checklist from the

example is used to
evaluates the KPIs used
by a set of organizations
to track if their projects
deliver the expected
outputs.

• The audit aims to

identify the mix
between qualitative and
quantitative KPIs and
whether they had clear
targets assigned.
Source: Australian National Audit Office (2011)

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18. COMPLIANCE REPORTING
Context: KPIs are commonly used to report
compliance with regulations.

Positive aspects: KPIs are clustered on

different perspectives.

Recommendations: KPI names should be

standardized.

Comments: Reporting to governmental

institution can also serve for organizations
as a benchmarking technique if results are
published.

Source: Ontario Buys (2010)

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 KPI DNA MAP
Scenario:
• You are part of the management team of a manufacturing
company. Based on the context provided you have to
recreate the KPI taxonomy of two division in the
organization: production and customer service.

Task:
• Read carefully the report provided and identify examples
of KPIs that you can use to populate the taxonomy given.

• You can also come up with your own examples of KPIs or

clusters as well.

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 KPI DNA MAP
PRODUCTION
Costs Timeliness
Expenses Planning Duration Schedule adherence

Quality Quantity
Scrap Meeting standards Volume Productivity

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 KPI DNA MAP
CUSTOMER SERVICE
Costs Timeliness
Expenses Planning Duration Schedule adherence

Quality Quantity
Meeting standards Satisfaction Volume Productivity

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KPI DNA MAP
The KPI taxonomy can be consolidated into a matrix, integrating
also the concepts of efficiency and effectiveness.

Customer Service (CS) example:

Efficiency Effectiveness

Costs $ Cost per call $ Customer Service costs

Timeliness # Time to solve customer tickets % Customer tickets solved on time

# Errors in processing tickets per

Quality % Customer satisfaction with CS
agent

Quantity % Customer tickets solved per hour # Customer tickets solved

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 SESSION REVIEW
1. 18 different scenarios / contexts to use KPIs

2. Building a KPI taxonomy can be a useful pre-requisite

before starting the KPI selection process.

3. The KPI taxonomy can be consolidated into a matrix -

Efficiency and effectiveness:
• Costs
• Timeliness
• Quantity
• Quality

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 REVIEW DAY 1 – CROSSWORD
Scenario
• You are split in teams, with the objective of finding out the
crosswords from the next slide.

Tasks
• Identify the 15 words hidden behind letters from the next
slide;
• All words connect to the previous day key concepts.

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 REVIEW DAY 1 – CROSSWORD

A S L E A D I N G E N T G G V D E R A C K B E K K G
Q T I L O S Z Q L I M N D E C Q B C Q P P M K Q E D
A F O B J E C T I V E L I A Q D M H R O I L R D Y C
Z U I A D G A M I E F F E C T I V E N E S S Q C R Y
A B O N A S O A R S F N B B M D F N Q A S C V B I S
Q E Y P V B N M L Q I H C G I L A A A L L H U J S C
W B H O A A S S G T C Y S T N O L E Z C A X S C K D
X E N I C D V B M D I P E R F O R M A N C E U I I F
C R M K O C V B K A E U V E X S W E D X R T Y U N L
D V J M D A N M I O N I I E V R Y T E O E G H J D O
Q E R T Y U I O P C C Y N R E W Q R A S W V E R I U
D A S H B O A R D R Y N N R T C Y I Z X I V B N C T
A S C V B N M J H K D D I X A A A C G H E K L O A R
I U Y T R E W Q S D F G T J L F L F J H W F D S T E
A S C O R E C A R D O I I P O C E T S R T D N G O W
C M N B V C U P O L I U A T R A Q Y E L H G F S R Q
Q W E R T Y U I O P L K T H T I M E L I N E S S D D
G F L A G G I N G W Y U I O P E L T J H G F D S A F
A S D F G L H Q A Z X E V W C R V B N H G F D E W G
V B N M P L O I U Y T R E W Q U A L I T A T I V E H

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 REFERENCES
• Apple (2011), Environmental responsibility. Available at: http://www.apple.com/environment/
• Australian National Audit Office (2011), Development and implementation of Key Performance
Indicators to support the outcomes and programs framework. Available at:
http://www.anao.gov.au/~/media/Uploads/Audit%20Reports/2011%2012/201112%20Audit%20Report%20
No%205.pdf
• Body Media Fit (2015), Activity Manager. Available at: http://www.bodymedia.com/?whence=
• Clebsch, B., Dougherty, J. D., and Anderson, G. (2004), Management by fact: Benchmarking university
IT services. Available at: http://www.educause.edu/ero/article/management-fact-benchmarking-
university-it-services
• Felton, N. (2013), Annual report. Available at http://feltron.com/FAR13_11.html
• Godrejinfotech.com (2010), Products. Available at:
http://www.godrejinfotech.com/godrej/godrejinfotech/offerings/products/sap/pro_sap_busiObj.html
• KPI Institute (2014), Human Resources Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html
• KPI Institute (2015), Individual Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/individual-performance-management-toolkit.html
• Oak Ride Institute for Science and Education (2005), Performance measurement process. Available at:
http://www.orau.gov/pbm/handbook/1-1.pdf
• Texas State University (n.d.), Global service level objectives. Available at:
http://www.tr.txstate.edu/ser-cat/sc-object.html
• Western Australia Department of Treasury and Finance (2005), 2004-05 Procurement Reform benefits
realisation report

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AGENDA

5 KPI Selection
1. KPI selection for organizational scorecard
2. KPI selection sources
3. KPI selection techniques

Key Learning Points

1. Design a well structured KPI selection process;

2. Recognize useful KPI selection sources;
3. Deploy KPI selection techniques.

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 ALLOCATE KPIS FOR EACH OBJECTIVE
Financial No. KPIs list
Increase profitability
1 $ Operating expenses
% Employees meeting professional development
Maintain financial discipline 2 requirements
3 # Complaints from customers
4 % Profitable customers
Customer
Maintain high levels of customer satisfaction 5 % Budget variance
6 # Innovation ideas
Serve new market segments profitability 7 # Employee engagement index
8 # Training hours per full time equivalent (FTE)
Internal Processes 9 % Market share
Ensure quality services 10 % Net profit margin
11 # Procedures reviewed
Improve process management capability 12 $ Net cash flow
13 % On time delivery of orders
People, Learning & Growth 14 # Positions filled
Nurture engagement, creativity and innovation
15 % Customer satisfaction
16 % Orders error rate
Develop workforce skills and competences
17 % Critical positions with succession plans in place
18 % Processes improved
Ensure talent availability
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KPI SELECTION PROCESS AND TEHNIQUES
Scope clarifications
1
Prepare for KPI selection KPI expo
1
KPI clustering

KPI selection workshop

2 Facilitate the KPI selection Relevant questions framing
2
Value flow analysis
2 KPI balancing

KPI documentation
Follow up on KPI selection First performance review
33 meeting

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SCOPE CLARIFICATIONS
WHAT
1
Defining what needs to be measured:
2

Objectives Scorecard
3

Processes Dashboard

WHY
Channels the selection process on a clear path with
specified scope and outputs expected.

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KPI SELECTION SOURCES

Workshop Industry
KPI standards
2
Sources

3
Board Benchmarking

Management Competitors

Historical External
data Compliance lists
Workshop

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KPI SELECTION SOURCES

1
• Competitor review reports
• Strategic development plan
• Printed catalogues
(3-5 years)

SECONDARY
2 • Online catalogues
• Annual business / strategic
(http://www.smartkpis.com/)
plan
3 • Annual reports of other
• Annual reports
organizations (KPIs in
• Internal operational reports
Practice)

• Suppliers input
• Front-line employees input

PRIMARY
• Customers input
• Managers input
• Expert advice
• Board input
• Questions in discussion forums

INTERNAL EXTERNAL

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 KPI EXPO
WHAT
1 • Collection, curation and presentation of relevant KPI
examples.
2

WHY
3

Informs Educates Inspires

HOW
• Consolidating lists from external sources, like smartKPIs.com.
• Using internal sources to identify KPIs, like operational
reports.
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KPI CLUSTERING
WHAT
1
Grouping KPIs in different categories:
2 • Balanced Scorecard perspectives;
• Objectives;
3 • Dashboard sections;
• Value Flow Analysis stages;
• Process steps.

WHY
• Enables alignment and identification of possible gaps.

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 KPI CLUSTERING
Scenario:
1
• You are part of the management
team operating in a niche
2
industry.
• The board asks you to present 5
3
KPIs you will be using to track the
performance of the organization.

Task:
• Write down 5 KPIs you would
recommend.
• Use one single post-it note for
each KPI (5 post-it notes per
team).

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RELEVANT QUESTIONS FRAMING
WHY?
1
• Focus on the importance and relevancy of context

2
Examples:
• What numbers will demonstrate the objectives
3 achievement?

• What process are we going through and how long will it

take?

• What will we learn from the data?

• What matters?

• So what?
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RELEVANT QUESTIONS FRAMING
During the KPI selection Questions to prepare in
FAQs
workshop case they are asked
1
What will we do with KPI
What are the most relevant How many KPIs should we
results?
sources for KPI selection? select?
2
What is the order of
What efforts are required for
importance in which the KPI What is the procedure for
data gathering for each KPI?
3 selection sources should be validating the KPIs selected?
analyzed?
What process are we going
4 Who should participate in What will we learn from the
through and how long will it
the KPI selection process? data?
take?
What figures will reflect the
What is the ideal format for How do we link KPI results
achievement of company
KPI selection process? with bonuses?
objectives?
What sort of data we need to
What are the most relevant
keep track of to ensure
criteria for the KPI selection?
informed decision making?
What are we trying to What matters?
achieve by setting up KPIs?

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VALUE FLOW ANALYSIS
WHAT?
1
• Logical model to indicate the value generation
2
from inputs, process outputs and outcomes.

3 WHY?
• Gain insight into how the objective can be measured
from different perspectives.

• Provides an overview of the process involved by

achieving the objective.

• Enables the selection of the most relevant KPIs for the

objective.
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VALUE FLOW ANALYSIS

OBJECTIVES INPUTS PROCESSES OUTPUTS OUTCOMES

# Customer # Time to % Solved

# New clients
service answer an inquiries
from referrals
representatives inquiry
Improve
customer
satisfaction with
service levels
% Customer
$ Customer % Returning
# Meetings with satisfaction
engagement customers
key customer index
budget

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INPUT METRICS
• Measure the quantity/quality of input resources to organizational
activities.
• Generally include: human resources, financial resources
infrastructure.

• Examples:
 Human Resources: # Employees, # Consultants, # Project team
 Financial Resources: $ Budget, # Grants, $ Bank loans
 Infrastructure: # Production lines available, # Plants available

INPUTS PROCESSES OUTPUTS OUTCOMES

Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334

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PROCESS METRICS
• Measure the quantity/quality of the activities required to provide
certain expected outputs.
• Generally include: transformation in terms of time and utilization
rates.

• Examples:
 Time: % On time delivery vaccination, # Time to finalize task
 Utilization: % Equipment utilization rate, % Transportation
capacity used

INPUTS PROCESSES OUTPUTS OUTCOMES

Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334

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OUTPUT METRICS
• Measure the quantity/quality of the goods or services created or
provided through the use of inputs;
• They generally include quantifiable results.

• Examples:
 # Patients vaccinated
 # Items produced
 # Scrap generated
 # Facilities built

INPUTS PROCESSES OUTPUTS OUTCOMES

Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334

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OUTCOME / IMPACT METRICS
• Measure the quantity/quality of the results achieved through the
provision of goods and services.
• They generally include: added value, impact.

• Examples:
 Impact: % Incidence of disease, % Mortality rate, % Graduates
employment rate
 Added value: $ Savings generated by innovation ideas,
# Customer satisfaction index, % Net promoter score

INPUTS PROCESSES OUTPUTS OUTCOMES

Source: Adapted from Performance monitoring indicators handbook - World Bank Technical Paper, No 334

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VALUE FLOW ANALYSIS
Objective INPUT PROCESS OUTPUT OUTCOMES
Ensure population $ Budget % On time # Population % Incidence of
immunization # Doctors delivery of vaccinated disease
vaccination % Mortality rate
programs

Build a safety $ Budget # Time to # Incidents # Time lost due to

working # HSSE team remediate HSSE recorded safety incidents
environment audit findings
Expand $ Budget # Time to build a # New % Production
production # Contractors new production facilities capacity growth
capacity # Equipment facility built
available

Provide access to $ Budget # Time to install # Electricity # Supply (or

electricity # Power plants an electricity transmission consumption) of
services # Electricians facility facilities electricity
installed

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 VALUE FLOW ANALYSIS
Objective: Operate in an environment that fosters creativity and
1 innovation

# Innovation # Staff in the

$ Value generated by % Innovation ideas
2 1 champions in 4 innovation program 7 10
innovation ideas funded
each area team

3 # Innovation # Time to evaluate % Ideas evaluated within % Innovation ideas

2 5 8 11
focus groups an idea the SLA target of 2 weeks implemented

% Innovation ideas % Innovation ideas

3 # Patents 6 $ Budget 9 12
evaluated that generated value

Input Process Output Outcome

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 VALUE FLOW ANALYSIS
Scenario:
1 • Select one objective of your
choice.
2
Tasks:
• Write at least 2 input, 2
3
process, 2 output and 2
outcome metrics.

• Select from these metrics 2-3

KPIs to measure the
achievement of the objective.

• Propose 1-2 initiatives to

address the implementation of
the objectives.

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KPI BALANCING
WHAT
1
• Quality assurance technique consisting in
2
selecting at least 2 KPIs for the same objective.

WHY?
3
• To avoid focusing on certain KPIs at the expense of
others.
• To provide a wider perspective upon actual
performance.

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 KPI BALANCING
Write the correct KPI number under each objective, in order
1 to assure a balanced approach.

2 FAs Objectives No. KPIs

R&D A. Ensure R&D efficiency 1 $ R&D costs
2 % IT software updated within SLA
3 % Core areas of expertise
3 covered at desired level
Investments B. Improve investments activity 4 # Complaints logged
5 # New products developed
6 % Profitable investments
Information
C. Maintain updated systems 7 # Training hours per FTE
Technology
8
# Investment initiatives proposed
# IT software updates 9
6 Human % Customer satisfaction with
D. Develop workforce skills and competencies 10
Resources service level

Marketing E. Increase customer satisfaction levels

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KPI BALANCING
Leading Lagging Industry

1 # Incidents of non-
# Fatal accidents Oil & Gas
compliance
% Employees with competencies at
2 # Training hours per FTE Consulting
desired level
Efficiency Effectiveness Industry
3 $ New customers acquisition
# New customers Retail
cost
# Call duration % First call resolution rate Call Centre

Quantity Quality Industry

# Maintenance requests % Maintenance requests resolved
Manufacturing
resolved within SLA

# Ideas expressed % Ideas implemented Education

Subjectivity Objectivity Industry

# Customer satisfaction # Customer complaints received Financial institutions

% Net promoter score # Clients from referrals Professional Services

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KPI BALANCING

Source: Heinrich, H.W. (1931)

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KPI SELECTION WORKSHOP
WHY WHO
1
• Collective intelligence • Clients
insights
2 • Suppliers
• Learning
• Employees
• Buy-in
3 • Board
• Management
• Facilitators

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KPI SELECTION WORKSHOP
Agenda
1
Topics
Context (60 minutes)
2
5 Agenda and meeting scope review
5 Needs review
3 10 Terminology and KPI format clarification
20 Selection process and tool review
20 Sample Value Flow Analysis (VFA) as a model
Selection activities (140 minutes) 240 minutes
60 Interactive VFA team exercises
60 Consolidation of KPI wall
20 List revision based on filtering criteria
Review and closing (40 minutes)
20 Review of draft
10 Answering questions
10 Clarifying next steps

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FOLLOW UP ON KPI SELECTION
KPI documentation
1
• KPI measurement limitations

2 • Cost benefit analysis

3
First performance review
meeting
• Review and reconsider
some KPIs that may prove
inefficient to measure and
report in practice.

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KPI SELECTION CRITERIA
Performance criteria Performance criteria
found in practice: recommended:
• Attainable
• Complete
• Direct Relevant

• Incentivized
• Practical Clearly
• Reliable defined
• Specific
• Tested
Balanced
• Time bound
• Useful for management

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 SESSION REVIEW
1. KPI selection sources: internal and external, primary and
secondary.

2. Main KPI selection techniques:

• KPI expo;
• KPI clustering;
• Value Flow Analysis;
• KPI balancing;
• KPI selection workshop.

3. KPI selection criteria: clearly defined, balanced, relevant.

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 REFERENCES
• SmartKPIs.com (2015), KPI examples. Available at:
http://www.smartkpis.com/kpi_examples/dashboard/
• Heinrich, H.W. (1931), Industrial accident prevention: A scientific approach. Available at:
http://www.worldcat.org/title/industrial-accident-prevention-a-scientific-approach/oclc/3493629

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AGENDA

6 KPI Alignment
1. KPI alignment approaches
2. Select KPIs for corporate scorecard
3. Cascaded KPIs to functional area

Key Learning Points

1. Identify different approaches to align KPI within the organization;
2. Select KPIs for corporate scorecard;
3. Cascade KPIs from organizational level to departmental level.

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KPI ALIGNMENT
Approaches WHEN
• activities are homogeneous and allow
aggregation of strategy and KPIs (for
Organization example retail, banking);

Business Business Business The corporate scorecards is transmitted

to business units and few transformations
Unit 1 Unit 2 Unit 3 are made to customized it at lower
hierarchical levels.

WHEN
• strategy is more clear at business unit
Organization level (for example diversified
companies, holding corporations);

Business Business Business The corporate scorecard is developed

Unit 1 Unit 2 Unit 3 based on the scorecards from business
units and contains the common KPIs
(usually financial and human capital
related KPIs);
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KPI ALIGNMENT
Approaches

Bottom-up
• In practice, many companies find
themselves between the two
extreme approaches and recur to a
combination of tactics.

Top-down

• The process can start from business units and have an alignment:
 bottom-up for corporate scorecard;
 top-down for departments within that business unit.

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KPI CASCADING
Business Unit Department A Team A1

O1: Same objective O1: Same objective O1:

KPI1a KPI1a KPI1a
Same KPs 1 KPIs cascaded
KPI1b KPI1b 1 specific KPI KPIA1a

O2: O2:
Team A2
KPI2a Specific KPIs KPI2Aa
KPI2b KPI2Ab
O1:
KPI1b
1 KPIs cascaded
1 specific KPI KPIA1b
Supports the
O3: achievement of O3 OA3:
KPI3a KPI3Aa
KPI3b KPI3Ab
OA2:
KPIA2a Team specific
Specific objective objective
KPIA2b
Specific KPIs Specific KPIs

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KPI CASCADING
1. Business unit objectives can be cascaded at departmental level as
they are, with the same or different KPIs:

• Same objectives – same KPIs

• Same objective – same KPI + specific KPI
• Same objective – specific KPIs

2. The same objective can be cascaded to more departments, each of

them measuring it through different KPIs.

3. Some organizational objectives may not be cascaded to lower levels.

4. Organizational objectives are supported by specific objectives

established at departmental level, selected based on a contribution
analysis.

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 SELECT KPIS FOR CORPORATE SCORECARD
• Scenario:
As the new management team of a hotel you have reviewed the strategy
and reflected it in the organizational balanced scorecard. Given the
significant changes adopted in terms of objectives, a new KPI selection
process is necessary.

• Task:
Based on the list of KPIs specific for the hospitality industry you are
required to choose the most relevant KPIs for the organizational scorecard.

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 SELECT KPIS FOR CORPORATE SCORECARD
Financial
Achieve profit growth

Optimize costs structure

Customer
Maintain high levels of customer satisfaction

Increase customer base

Internal processes
Maximize capacity utilization

Minimizing our waste, energy and water usage

People, Learning & Growth

Build an environment that fosters creativity and innovation

Develop workforce skills and competences

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 SELECT KPIS FOR CORPORATE SCORECARD

• Examples of KPIs for Hotel

% Bookings conversion rate from # Innovation ideas received from
1 11
website employees
2 % Canceled reservations 12 # Length of stay in hotel
3 # Customer satisfaction index 13 $ Net cash flow
4 # Energy consumption 14 # New guest
5 % Employees certified in hospitality 15 $ Operating costs per room
6 # Employee engagement index 16 $ Revenue per guest
7 $ Gross profit 17 $ Revenue per available square meter
8 # Guests per employee 18 # Rooms available
9 % Hotel occupancy 19 # Room order serving mistakes
10 # Hotel waste generated # Training hours per full time
20
equivalent

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 CASCADE KPIS TO FUNCTIONAL AREA
Scenario:
• You are part of a hotel’s Human Resources team. Given the strategy
review that took place at organizational level, you will have to align the
departmental strategy to the new changes.

Task 1:
• Cascade the objectives and KPIs from the Hotel balanced scorecard
to Human Resources department.

Task 2:
• Add new relevant objectives and KPIs for the department, based on the
lists with examples provided.

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 CASCADE KPIS TO FUNCTIONAL AREA
Customer

Internal Processes

People, Learning & Growth

Financial

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 CASCADE KPIS TO FUNCTIONAL AREA
• Examples of objectives
No. List
O1 Ensure high service delivery standards
O2 Ensure timely order deliveries
O3 Expand customer base
O4 Improve HR service delivery capability
O5 Increase revenues
O6 Maintain high levels of internal customer satisfaction
O7 Optimize recruitment
O8 Optimize call response time
O9 Provide good value for money to the organization
O10 Seek efficiencies to minimize departmental costs

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 CASCADE KPIS TO FUNCTIONAL AREA
• Examples of KPIs for Human Resources
1 # Certifications per HR employee % HR projects on time, on budget
11
2 # Complaints with HR services and according to specifications
3 $ Cost avoidance savings 12 % HR operating expense rate
4 $ Cost per hire # Innovation ideas received from HR
13
# Employee complaints resolution employees
5
timeliness % On-time delivery of HR service
14
6 # Employee engagement index requests
7 % Employee retention rate 15 # Open requisitions
8 # FTEs per HR department FTE 16 # Time to fill a vacant position
% HR customer satisfaction with # Training hours per HR full time
9 17
service levels equivalent (FTE)
10 % HR processes optimized 18 % Turnover
19 % Succession plans in place
20 % Voluntary separation rate

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AGENDA

7 KPI 1. KPI documentation form functions

Documentation 2. KPI documentation form design
3. KPI documentation process
4. Organizational KPI library development

Key Learning Points

1. Design a KPI documentation form;

2. Identify sources of information to document a KPI;
3. Create and maintain an organizational KPI library.

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KPI DOCUMENTATION FORM FUNCTIONS
Ensure understanding of KPI measurement

Facilitates communication through standardisation

Activation prerequisite

Automation enabler

Knowledge management

Educates stakeholders (KPI owners, data custodians)

Contributes to buy-in by involving the stakeholders

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KPI DOCUMENTATION
WHAT
• Identify metadata fields
• Fill in the required fields for each KPI

WHY
• Simplify communication
• Alignment
• “Setting the rules”

HOW
• Standardized KPI documentation form

Benefits of the organizational KPI Library

• Top performers are 53% more likely than the industry
average to maintain a library of KPI examples and
39% promote the use of performance management to
their employees.
Source: SmartKPIs.com (2015)
Source: Aberdeen (2011)

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KPI DOCUMENTATION FORM DESIGN
Form sections Fields
Identification Name, number, functional area
Definition Link to strategic objective
Calculation Sub-measures, formula, trend
Orientation Meaning, impact, implementation level,
indicator type
Purpose Link to strategic objective
Data profile Automation, frequency, time-lag,
integrity, limitations
Targets Intervals, benchmarking fit
Administration Owner, custodian, source

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KPI DOCUMENTATION FORM (1)

Source: The KPI Institute (2014)

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KPI DOCUMENTATION FORM (2)
Positive aspects: A comprehensive 2-3 pages
documentation form;

Recommendations: A table format for the

document is recommended.

Comments: Other fields, besides the ones

present in the right image are:
• Rational (the need for this KPI);
• Benefits;
• Underlying leading practices;
• Relevancy;
• Target considerations (establishment and impact
with other metrics);
• Related metrics and standards;
• Implementation (calculation parameters, formula,
what to include and exclude )
• Data accessibility;
• Data source;
• Implementation challenges.
Source: Ontario Buys (2009)

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KPI DOCUMENTATION FORM (3)
Positive aspects: Proper display of
information – using a 1 page table, while
providing the critical information for KPI
measurement.

Recommendations: Standardize KPI

names.

Comments:
• The use of predefined checklist, to
standardize response options;

• The insert of hyperlinks in the

documents to redirect the reader to
additional information;

• Provides direct contact details, such

email addresses.
Source: HSE (2012)

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KPI DOCUMENTATION FORM
• Organizations use on average 12 different fields to
document a KPI

• The most popular fields are:

25 21 19
20 18
15 13 12 11
10 8 7 7 6
5
0
Name Definition Calculation Data source KPI ID Purpose Targets/ Subordinate Limitations Standard
formula record Thresholds measures reporting
used for frequency
calculation

Source: The KPI Institute (2014)

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KPI DOCUMENTATION PROCESS
Review internal literature
1

Review external resources

2
Consult with staff collecting or using the data
3
Present to KPI owner for approval
4
Review and approve by KPI architect / SME / Strategy Manager
5

Approve by management team

6
Add to organizational KPI library
7

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THE ORGANIZATIONAL KPI LIBRARY
Process Governance
Design the initial KPI Strategy Office / KPI
documentation form implementation team
1

Update KPI documentation forms Data custodians

2
Review, update and sign-off KPI KPI data owners
documentation forms
3

Approve Top management

4
Centralize all KPI documentation Strategy Office / KPI
5 forms in a KPI library implementation team

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 PRACTICE KPI DOCUMENTATION

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 SESSION REVIEW
1. KPI documentation form functions are to:
• Provide an easier understanding of KPIs;
• Facilitate communication;
• Prepare KPIs activation;
• Enable automation;
• Ensure knowledge management;
• Educate stakeholders;
• Contribute to buy-in;

2. Most important fields in a KPI documentation form: name, definition,

calculation formula, target, data source, data owner, data custodian.

3. Weights are not recommended as they bring subjectivity to KPI

measurement.

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 REFERENCES
• Aberdeen Group (2011), Enterprise performance management. Available at:
http://www.aberdeen.com/Aberdeen-Library/6659/RA-enterprise-performance-management.aspx,
• The KPI Institute (2014), KPI documentation forms research study

Images:
• HSE (2012), KPI guidelines. Available at:
http://www.hse.ie/eng/services/Publications/corporate/performancereports/kpiguidelines2012.pdf
• Khaled, A., Sanjoy, K. P., Ripon, K. and Salahuddin A. (2011), Selection of suppliers through different
multi-criteria decision making techniques. Available at:
journalofbusiness.org/index.php/GJMBR/article/download/479/426
• KPI Institute (2014), Human Resources Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html
• Ontario Buys (2009), Performance measurement. Phase II - User guide. Available at:
http://www.doingbusiness.mgs.gov.on.ca/mbs/psb/psb.nsf/Attachments/BPSPerformMeasurePhaseII-
UserGuide-pdf-eng/$FILE/perf_meas_userguide-eng.pdf
• SmartKPIs.com (2015), Net promoter score. Available at: http://www.smartkpis.com/kpi-key-
performance-indicator/net-promoter-score-1303.html

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AGENDA

8 Working with 1. Target setting process

targets 2. Challenges in working with targets
3. Weights and Indexes
4. Negative behaviors cause by target setting

Key Learning Points

1. Locate KPI target sources;

2. Experiment target setting for a KPI;
3. Address negative behaviors caused by target setting.

© The KPI Institute 2015 160

WORKING WITH TARGETS

• Show the desired result level for KPIs

• Represent the starting point in the

measuring and analysis process
(comparing to actual / desired level)

• Impact behavior

WHY The Goal Setting Theory (Ed Locke, Gary Latham)

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TARGET SETTING PROCESS

Consultations in target
setting should start with
the top management. As KPIs are active and data
is gathered, targets may be
reviewed and recalibrated Targets need to be
adjusted periodically as
the internal and external
environment of the
company is in a
permanent change.

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TARGET SETTING SOURCES
Contextual External analysis
Analysis (market trends)

External
Benchmarking

Internal
Benchmarking
Historical
records

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TARGET SETTING APPROACHES
Top-down

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TARGET SETTING APPROACHES
Bottom-up
# Turn time
15 min

Cargo loading and Passenger

Pre-flight check
unloading boarding and
5 min.
10 min. deplaning 10 min.

Meal & beverage

Cabin grooming Fuelling
provisioning
3 min. 5 min.
5 min.

• Some activities can take place in the same time like cabin grooming and cargo
loading or unloading, allowing the process to be more efficient

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TARGET SETTING APPROACHES
Establishing thresholds

Set target
value

• Increasing
Determine • Decreasing
trend • Within range

• Above target
Establish • In tolerance range
thresholds • Below target

Define each
threshold

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KPIS TREND

Increasing

Within range

Decreasing

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KPI THRESHOLDS
Popular methodologies to express thresholds

Traffic light:
• 2 points scale • 4 points scale
 Meets or exceeds target  Above target
 Below target
 Meets target
 Acceptable range
• 3 points scale
 Far below target
 Meets or exceeds target
 Acceptable range
 Far below target

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Targets
 KPI THRESHOLDS
Perspective / Strategic Objectives / KPIs SRF Actual result Target Thresholds Status
Financial
Ensure financial stability
>10,000
$ Revenue M 10,500 10,000 9,000-10,000
<9,000
Customers
Maintain high level of customer satisfaction
>80%
% Customer satisfaction Q 65% 80% 70-80%
<70%
Internal Processes
Ensure efficient production
<30
# Production cycle time M 20 30 30-35
>35
People, Learning and Growth
Develop staff competencies
24-28
# Training hours per employee Y 30 24 20-24; 28-32
<20; >32

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 ESTABLISH TARGETS
Scenario 1:
• You are the Marketing Manager of a company that sells bicycles on the
national and international market. The company is an average player in
the industry in terms of turnover and company size.

• After the annual strategic planning session, the Board has decided that
the target of 5 % for % National market share should be revised.

Task:
• Based on the 4 sources of information provided you are requested to
propose a new target for % National market share.

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 ESTABLISH TARGETS
Historical data
% National market share performance results
2010 2011 2012 2013 2014
Q1 5.5% 7% 7.3% 6% 6%
Q2 5.6% 7% 7.2% 6.1% 6.5%
Current target: 5%
Q3 5% 6% 7% 5.7% 6.8%
Q4 5% 4.5% 7% 5.7% 5.5%
Average 5.3% 6.1% 7.1% 5.9% 6.2%
Total average 6.1%

Internal benchmarking
The international Marketing division that operates on a similar market size
registered the following results for % International market share:
2014
Q1 7.5%
Q2 8%
Q3 9%
Current target: 8%
Q4 9%
Average 8.4%

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 ESTABLISH TARGETS
External benchmarking
% Market share at national level % Market share at international level
Market leader 20% Market leader 30.0%
2nd 18% 2nd 25%
3rd 17% 3rd 24%
Average players 8% Average players 10%

Market analysis
• The governmental initiative to build bicycle tracks in all major cities is progressing
according to schedule and the budget for 2015 has increased compared to 2014.

• In the last years, this sport has become more and more popular not only among young
people, but also among adults. It is estimated that in the following 3 years each family
will posses at least 2 bicycles and they will not be used exclusively for leisure, but also
as means of transportation.

• This will definitely reflect in a more fluent traffic and a lower environmental foot
print.

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 ESTABLISH TARGETS
Scenario 2:
• You are the Call Center Manager of a company operating in IT business.

• You are responsible for managing the inbound Call Center Division A and
in the last quarters, performance results indicate that the current target
of 10% for % Call abandon rate should be reconsidered.

Task:
• Based on the 2 sources of information provided, you are requested to
propose a new target for % Call abandon rate.

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 ESTABLISH TARGETS
Historical data
% Call abandon rate
2010 2011 2012 2013 2014
Q1 10% 11% 12.3% 13% 10%
Q2 9% 12% 13.2% 12% 8%
Current target: 10%
Q3 9.5% 11.5% 12% 10% 8%
Q4 10% 11.9% 11% 11% 7%
Average 9.6% 11.6% 12.1% 11.5% 8.3%
Total average 10.6%

External benchmarking
Inbound Call Center 1 2%
Inbound Call Center 2 3%
Inbound Call Center 3 5%
Outbound Call Center 1 3%
Outbound Call Center 2 5%
Outbound Call Center 3 7%
Average inbound 3.3%
Average outbound 5.0%

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 ESTABLISH TARGETS
Scenario 3:
• You are the Marketing Manager of a distribution company that provides
delivery services nationally and internationally.

• Following the strategic planning for 2015, you are requested to activate
the objective under your ownership: Increase customer advocacy. The KPI
used to measure this objective is % Net promoter score (NPS).

• This KPI needs to be activated until the next month and all the KPI
documentation is prepared except one field: the target.

Task:
• There is no historical data for this KPI and no reliable benchmarking data.
Under these circumstances you are requested to propose a target for %
NPS.

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CHALLENGES IN WORKING WITH TARGETS
Technical Social
• Historical data does not • Targets are perceived
exist; either too high or too low;

• Accuracy of forecasts or • Targets are imposed, not

analysis on which targets established collaboratively;
are set;

• The use of benchmarking • Negative behaviors driven

data; by target setting.

• Assigning weights.
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WEIGHTS AND INDEXES
Weights Indexes
• Emphasizing the importance of • A set of items that aggregate
reaching targets, by distributing multiple, but distinctly related
100 points amongst all KPIs in the aspects under a single indicator;
scorecard / dashboard.
• They are an accumulation of
scores from a variety of individual
Weight X Actual Result items.

=
Score

Source: Arcan, A. (2011)

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WEIGHTS
PROs CONs
• Keep focus on what • Establishing weights can be
matters by correlating subjective;
importance with weight
value; • Aggregating KPI results into
a performance score/index
• Enable an overall brings no value for the
performance score; decision making process;

• Changing weights from one

• Weights can be changed –
flexibility. period to another leads to
inconsistency of data in
time.
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WEIGHTS – EMPLOYEE ASSESSMENT
Context: Example of instructions on how to assign weights for employees

Positive aspects: Weighting focused on impact of outcomes and importance.

Assigning weights during the employee performance planning stage.

Recommendations: Ensure balance and alignment between of weights

across different positions.

Comments: Assigning
weights can be subjective
– try to reduce this to the
minimum.

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KPI Documentation Targets
WEIGHTS – EMPLOYEE ASSESSMENT
Positive aspects:
Weights are assigned
for special projects,
outlining on what
should the employee
focus with priority.

Recommendations:
Include KPIs to
measure the
fulfillment of key
accountabilities.

Comments: Ensure a
proper aggregation of
weights with scores.

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WEIGHTS – EMPLOYEE ASSESSMENT
Positive aspects: Weights
are assigned to objective
measures of performance
such as KPIs.

Recommendations:
If used, weights should
cover all elements of
assessing employee
performance.

Comments: Thresholds are

also used to break down
results in 3 intervals: poor,
fair, excellent.

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WEIGHTS – SUPPLIER ASSESSMENT
Context: Weight are also used in supplier assessment to outline the
importance of reaching certain targets of the service level agreement.

Positive aspects:
Weights are included
in the supplier
evaluation sheet /
scorecard.

Recommendations:
Ensure the weights
assigning system
contributes to
improving the quality
of the service.

Source: Lindsey, M. (n.d.)

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INDEXES - # EMPLOYEE ENGAGEMENT INDEX
The Global Employee Engagement Index
• Applied in 47 different countries;
• More than 100 questions survey.

6.7 6.1
5.8

6.7

6.9
6.0

Source: Effectory International (2014)

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INDEXES - # LEADERSHIP CONFIDENCE INDEX
The National Leadership Index
• 1,000 Americans

• 13 of the country’s major sectors.

Source: Harvard Kennedy School, Center for Public Leadership (2012)

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 CHALLENGES IN WORKING WITH TARGETS
Which negative behaviors are associated with performance
based pay? Allocate the correct number in front of each
statement.
Match Description No. Behavior
Establishing lower targets than the realistic
1 Gaming
level estimated as possible.
Looking after the achievement of own
targets, without consideration of the
2 Sandbagging
implications for other areas in the
organization.
Disregarding environmental and safety
considerations in the process of meeting 3 Tunnel behavior
targets.
Influencing results through unapproved means Unethical
4
to ensure target achievement. behavior
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 SESSION REVIEW
1. Checklist for working with targets:

• Based on data (historical, internal and external

benchmarking, market analysis);
• Ambitious, but achievable standards;
• Clear and specific;
• No delta targets;
• No conflictual targets;
• Thresholds;
• Discussed, not imposed.

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 REVIEW DAY 2 – RELAY RACE FOR CROSSWORDS
Scenario
• You are split in teams, with the objective of recalling as many
key concepts as possible, connected to today’s sessions, starting
from the central theme of the crossword game.

Tasks
• The rally race lasts for 3 minutes and team members take turns
to run to the board and write down a key term starting from the
letters provided by the central theme;
• Words can be written as well based on the letters provided by
other team members, both vertically and horizontally.
• The team who generates as many relevant concepts in the
limited timeframe wins the game.

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 REVIEW DAY 2 – RELAY RACE FOR CROSSWORDS
Example
• Consider the following example to understand how key
concepts can be build around the central theme (SUMMER)
and around other team members ideas.

S U N
H U
O M
L M
I C E C R E A M
D R
A
Y
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 REVIEW DAY 2 – RELAY RACE FOR CROSSWORDS

K
P
I
S
E
L
C
T
I
O
N

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 REFERENCES
• Philips Hotel (2011), Net promoter score at Philips. Available at:
https://www.youtube.com/watch?v=lckcJeae5Ds
• Bain & Company, Satmetrix Systems (2013), Measuring your Net Promoter Score. Available at:
http://www.netpromotersystem.com/about/measuring-your-net-promoter-score.aspx

Images:
• Arcan, A. (2011), Performance measurements and metrics: An analysis of supplier evaluation. Available
at: http://scm.ncsu.edu/scm-articles/article/performance-measurements-and-metrics-an-analysis-of-
supplier-evaluation
• Effectory International (2014), Global Employee Engagement Index. Avaliable at:
http://www.employee-engagement-index.com/
• Eneco (2013), Performance report 2012. Available at:
http://annualreport2012.eneco.com/progress/strategic-kpis
• Harvard Kennedy School, Center for Public Leadership (2012), A national study on confidence in
leadership. Available at: http://www.centerforpublicleadership.org/images/pdf/NLI/cpl_nli_2012.pdf
• Lindsey, M. (n.d.), Supplier performance ratings - Scorecards, rankings, and awarding business.
Available at: http://www.asq-qm.org/resourcesmodule/download_resource/id/348/

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AGENDA

9 Data gathering 1. Data quality dimensions

2. KPI reporting data sources
3. KPI activation tools
4. KPI activation techniques
5. Working with data custodians
6. Data collection methods

Key Learning Points

1. Identify data quality dimensions;

2. Use KPI activation techniques and tools;
3. Address challenges in data gathering.

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 IDENTIFY DATA QUALITY ISSUES
You have received the following data to compile a report. You a requested to
perform a quick data audit and identify possible issues.
Actual Submission Submission
KPI Name Department Data Custodian Position
Result date deadline

# Time to fill a vacant position 35 HR Allan Smith Finance Manager 20-05-14 01-06-14

% Employee satisfaction 89% HR Allan Smith Finance Manager 18-04-14 01-06-14

% Return on capital employed
5% Finance Allan Smith Finance Manager 05-05-14 01-06-14
(ROCE)
# Units per man-hour 55 Production Dan McKenny Production Manager 20-05-14 01-06-14
% Net promoter score Marketing Joe Linch Marketing Manager 25-05-14 01-06-14
% Customer retention 10% Marketing Joe Linch Marketing Manager 18-05-14 01-06-14

% Deals closed 234 Sales Julien Harrison Sales Manager 18-06-14 01-06-14

# Production plants functional 4 Production Dan McKenny Production Manager 25-05-14 01-06-14

$ Time to produce 1 item 30 Production Dan McKenny Production Manager 21-05-14 01-06-14

% Brand awareness 50% Marketing Joe Linch Marketing Manager 17-05-14 01-06-14

% Production uptime 10% Production Dan McKenny Production Manager 17-05-14 01-06-14

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DATA QUALITY DIMENSIONS
Is the data available
at the time needed?
Does data Timeliness
reflect the
real world
Accuracy Is all the necessary
objects or
Completeness data present?
a verifiable
source?
Data
quality
Are there Is the data
no presenting the same
Uniqueness Consistency values in different
duplicate
records for systems?
the same
data? Conformity
Is the data compliant with the
format, type and range
requested?

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DATA QUALITY DIMENSIONS
Most common challenges:

Completeness
Availability

Timeliness Accuracy

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THE KPI ACTIVATION / DATA GATHERING PROCESS

1
• Meet with data custodians

• Secure activation budget KPI

2
activation
3
• Design the data gathering template

4
• Communicate the template to data custodians

5
• Send KPI data gathering notification On-going
data
• Send reminder email
6 gathering
7
• Receive data process

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DATA GATHERING GOVERNANCE

KPI Owner Data Custodian

• Responsible to • Responsible to
reach KPI targets gather data for
KPIs

Report Generator

This role can be taken by:

• Data custodian
• KPI owner
• A third party within the organization (e.g.
data analyst, strategy/performance
manager)

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 DISCOVER DATA CUSTODIAN ROLES
1. Analyze KPI measurement options
2. Reach the targets for the KPIs
3. Document KPIs
4. Select KPIs
5. Activate KPIs
6. Take decisions based on KPI results
7. Cascade KPIs to lower organizational levels
8. Find solutions for inactive KPIs
9. Ensure quality of data gathered: compliance with
measurement methodology, accuracy and timeliness of
submission
10. Update KPI documentation forms

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KPI DATA GATHERING SOURCES
Internal
Operations

Production reports
HSSE observation sheets
ERP Benchmarking
reports
SAP
External
Oracle
benchmarking reports

External entities
Surveys Sources (accreditations,
ratings)

# Customer satisfaction Universities

# Employee engagement Hospitals

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KPI ACTIVATION TOOLS
Data gathering process map
1

Data gathering template

2

KPI documentation form

3

Source: The KPI Institute (2015)

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KPI ACTIVATION TOOLS
Data gathering process map
1
1

Source: The KPI Institute (2015)

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KPI ACTIVATION TOOLS
Data gathering template
1

Source: The KPI Institute (2015)

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KPI ACTIVATION TOOLS
KPI Documentation form
1

Source: The KPI Institute (2015)

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KPI ACTIVATION / GATHERING TECHNIQUES
Meeting KPI data custodians in
1 person

Involving data custodians in a

2
community of practice

Sending reminder email

3

After KPI activation, involving data custodians in a

community of practice and sending a reminder email
become part of an on-going process to gather data.

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KPI ACTIVATION TECHNIQUES
Meeting KPI data custodians in person
1
Maritz Institute - 3 main benefits for conducting face
to face meetings:
2

Captures Inspires a Strengthens

attention positive human networks
attitude and business
relationships

Source: EQAVET (n.d.)

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KPI ACTIVATION TECHNIQUES
Involving data custodians in a community of
1 practice
• Provides a common platform for data custodians to
2 communicate and share work related experience;

3 • Stimulates learning by supplying a medium for

sharing best practices and tutoring;

• Creates collaborative processes that add value and

maximize data custodian efficiency.

Source: EQAVET (n.d.)

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KPI ACTIVATION TECHNIQUES
Sending reminder email
1
# KPIs to # KPIs already
Custodian name KPIs not reported on yet Due date Status Comment
report reported on

2 John Doe 8 8 none 13-Jan-15 Submitted

% IT budget out of total

Ann Smith 9 8 13-Jun-15 Outstanding
operational budget
% Profit rate, $ Revenue
Emory Lafayette 5 3 13-Jun-15 Outstanding
3 seat per kilometer

Carlos Mendoza 6 5 % Profitable routes 13-Jun-15 Outstanding

# Staff per passengers,

Ahmed Alsaudi 5 3 13-Jun-15 Outstanding
# Staff per flight
# Fuel consumption per
Luis Ramirez 4 3 13-Jun-15 Outstanding
flight
# Service quality rating,
Not
Anthony Gleason 2 0 % Ticket price variance from 13-Jun-15
submitted
market average
Not
Mike Myers 1 0 % Market share 13-Jun-15
submitted

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 WORKING WITH DATA CUSTODIANS
Scenario:
• As a part of the KPI implementation project team, following the
strategic planning session, your have to deal with a list of currently
inactive KPIs for the organization.

Task:
• You are required to meet with all data custodians and discuss the
inactive KPIs. To guide your discussion use the agenda provided and
make sure each topic is debated and solutions are found.

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 WORKING WITH DATA CUSTODIANS
Agenda
No. Topics No. KPIs to discuss
1 Present the scope of the meeting # Complaints registered from
1
Explain each KPI (definition, customers
2 calculation formula, data collection 2 % Project on time
frequency) 3 # Employee engagement index
Identify resources needed to activate
3
each KPI (infrastructure, people, costs)
Propose solutions to gather data for
4
each KPI
5 Establish activation dates for each KPI
6 Next steps and closing the meeting

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DATA COLLECTION METHODS

• Manual - Microsoft Excel

• Automated:
 Off-the shelf software;
 Custom-designed software.

Source: Gartner (2015)

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DATA COLLECTION METHODS
• During the last years, companies have oriented their IT investments
towards BI tools and analytics in order to facillitate data gathering and
provide accurate and timely information for decision making.
IT Investment Priority
60%

50%
50%

41%
40% 37% 36%
34%
31% 32%
30% 27% 26%
24%

20%

10%

0%
BI/analytics Infrastructure and data Cloud ERP Mobile
center

2014 2015

Source: Gartner (2015)

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SPIDER STRATEGIES

Source: Spider Strategies (2015)

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SOFTWARE SPOTLIGHT

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 SESSION REVIEW
1. Data quality dimensions: completeness, validity, accuracy,
consistency, integrity, timeliness.

2. KPI activation tools:

• Data gathering process map;
• KPI documentation form;
• Data gathering template.

3. KPI activation techniques

• Meeting KPI data custodians in person;
• Involving data custodians in a community of practice;
• Sending reminder email.
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 REFERENCES
• EQAVET (n.d.), Mission. Available at: http://www.eqavet.eu/gns/about-eqavet/mission.aspx
• Gartner (2015), CIO Agenda insights. Available at:
http://www.gartner.com/imagesrv/cio/pdf/cio_agenda_insights2015.pdf
• Spider Strategies (2015), QuickScore. Available at: http://www.integerperform.com/kpi-dashboard-
balanced-scorecard-software

Images:
• KPI Institute (2014), Call Center Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/call-center-scorecard.html
• Gartner (2015), Magic Quadrant. Available at: http://www.gartner.com/technology/reprints.do?id=1-
2AEDBU3&ct=150223&st=sb

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AGENDA

10 Data visualization
1. Guidelines to design efficient templates
2. Usability in terms of visual design
3. Scorecard and dashboard design

Key Learning Points

1. Identify good practices in data visualization;

2. Design appealing and efficient data visualization elements;
3. Choose the right visual representations for the performance
scorecard and dashboard.

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 DESIGN GRAPHS TO ILLUSTRATE KPI RESULTS

Estimate the value of A, B, C and D.

B D

A
C

Biscotti Capuccino Espresso Mug

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 DESIGN GRAPHS TO ILLUSTRATE KPI RESULTS

Conclusion: Pie charts are not ideal for graphical

representation of data.

28% 33%

24%
15%

Biscotti Capuccino Espresso Mug

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 9.13% 5.17% 11.40% 5.16%
9.80% 5.06%
5.31%

23.71% 16.79%

8.46%

Biscotti Capuccino
Coffee Grinder Coffee Pot Biscotti Capuccino
Croissant Espresso Coffee Grinder Coffee Pot
Latte Mug Croissant Espresso
Scone Thermos Latte Mug
Scone Thermos

Product Share
Latte
Latte 23,71% Croissant
Croissant 16,79% Biscotti
Biscotti 11,40% Mug
Mug 9,80% Scone

Scone 9,13% Espresso

Coffee Pot
Espresso 8,46%
Thermos
Coffee Pot 5,31%
Cappuccino
Thermos 5,17%
Coffee…
Cappuccino 5,16%
0% 5% 10% 15% 20% 25%
Coffee Grinder 5,06%

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TRENDS IN DATA VISUALIZATION
Data visualization is important, not
only data in itself. (Image of New
York City Mayor, Michael Bloomberg,
at a press conference).

March 2010 – USA President, Barack

Obama named Edward Tufte (Yale
university emeritus professor in
political sciences, statistics and
information technology at Yale
University), as a representative in
“Recovery Independent Advisory
Panel” (responsible for monitoring
the $787 billions allocated to the
economic recovery efforts).
Source: Tufte, E. (1983)
Source: Tufte, E. (2001)

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DATA VISUALIZATION GUIDELINES (1)

Source: Digital Inspiration (2012)

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DATA VISUALIZATION GUIDELINES (2)
Graphical Representation Checklist:

Is it necessary that the viewer makes his own

calculations?
Is data missing?
Are the axes visible enough?
Do lines intersect the data?
Is there an informative title?
Are all tags correctly associated with the graph
elements?
Are there too many dimensions in the graph?
Are there scales for all axes included?
Is 0 included in all line graphs?

Source: Hichert (2006)

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DATA VISUALIZATION GUIDELINES (3)

Source: The KPI Institute (2014)

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COMMONLY USED GRAPHS IN PRACTICE

Bar charts
1
Bullet graphs
2

3 Dial charts

4 Line charts

5 Pie charts
6
Sparkline

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BAR CHARTS
For comparing individual values
Column chart Bar chart
2013 Revenue split by segment (%)
1 25
Revenues (EUR billions)

France
20

2
2 15
10
North America

Emerging markets
5
UK & Ireland
3
0
3 2009 2010 2011 2012 2013
Germany & Austria

Japan
4
4 Stacked-bar chart
Benelux
Gender distribution in 2013 (%)
Italy

5
5 All managers Nordics

Senior managers Iberia

6 Branch managers
LHH

Switzerland
0% 20% 40% 60% 80% 100%

Female Male Australia & New Zealand

0% 5% 10% 15% 20% 25% 30%

Source: Adapted from Adecco (2013)

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BULLET GRAPH
To compare actual results with targets
Thresholds (Under target, within tolerance limits, above targets)

1 % Community Target

satisfaction
2 0% 20% 40% 60% 80% 100%
Actual performance

3 % Medical practitioner
satisfaction
4 0% 20% 40% 60% 80% 100%

% Practice manager
5 satisfaction
0% 20% 40% 60% 80% 100%
6
% Pharmacist satisfaction

0% 20% 40% 60% 80% 100%

Source: Adapted from Centrelink (2010)

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DIAL CHARTS
Useful for signalling threshold values

Source: Adapted from http://dashboard.virginiadot.org/default.aspx

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LINE CHART
Useful for tracking trends
Net profit margin (%)
1 14.0%
12.0%
10.0%
2 8.0%
6.0%
4.0%
3 2.0%
0.0%

4
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Net profit (EUR million)
6,000

5,000
5 4,000

3,000

6 2,000

1,000

0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Adapted from Unilever (2013)

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PIE CHART
Useful for comparing different parts of a whole
% Net sales by segment
1 Banking (1,497 € m) Retail (742 € m)

2 33%

3 67%

4 % Net sales by segment % Net sales by segment

Hardware (1,140 € m) Software (1,099 € m) Asia / Pacific / Africa (332 € m) Americas (304 € m)
Germany (644 € m) Europe (959 € m)
5 15%

43%
6 49%
13%
51%

29%

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SPARKLINE
Useful for showing data trends in a condensed manner

Source: Adapted from United States Office of Personnel (2012),

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SPARKLINES & BULLET GRAPHS DASHBOARD

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USABILITY IN TERMS OF VISUAL DESIGN

1 3D

2 Pie chart

3 Donut chart

4 Crowded graphs

5 Scales from 0

6
Background

Source: Equinox Center (2014)

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USABILITY IN TERMS OF VISUAL DESIGN
3D or not?

1 90

80
2
70

60
3
50

4 40

30
5
20

10
6
0
1 2 3 4 5

Source: Adapted from Adecco (2014)

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USABILITY IN TERMS OF VISUAL DESIGN
3D or not?

1 90 82
77
80 71
2
70 62

60
3 51

50

4 40

30
5
20

10
6
0
1 2 3 4 5

Source: Adapted from Adecco (2014)

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USABILITY IN TERMS OF VISUAL DESIGN
Avoid 3D graphics
Canada Singapore Canada Singapore
1 30% 30%
30%
25%
30%
25%
25% 19.4% 19.3% 18.6% 17.9% 25% 19.4% 19.3% 18.6% 17.9%
20% 20%
20% 20% 14.7%
14.7%
12.8% 13.4% 13.2% 15% 15% 12.8% 13.4% 13.2%
15% 15%
2 10% 10% 10% 10%
5% 5% 5% 5%
0% 0% 0% 0%
2009 2010 2011 2012 2009 2010 2011 2012
3 % Health expenditure % Health
2009 2010 2011
% Health expenditure
2012 2009 2010 2011
% Health expenditure
2012

expenditure

India
4 United States India
30%
United States
25.6% 25.9% 30% 25.6% 25.9% 25.1%
25.1% 23.9% 23.9%
30% 25.6% 25.9% 25.1% 23.9% 30% 25%
25%
25% 25%
20% 20%
16.6% 16.2%
5 20% 20% 15.9%
14.0% 15%
15% 15%
15%
10% 10% 10% 10%
5% 5% 5% 5%
0%
6 2009 2010 2011 2012
0%
2009 2010 2011 2012
0%
2009 2010 2011 2012
0%
2009 2010 2011 2012

% Health expenditure % Health % Health expenditure % Health expenditure

expenditure

Source: Adapted from Word Bank (2014)

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USABILITY IN TERMS OF VISUAL DESIGN
Pie charts: Inefficient use of space
Federal Spending for United States (2014) Federal Spending for United States
(2014)
1 Transportation, 3%
Protection, 1%
General
Government , 1%Other spending,
1% Other spending 1%
Education, 3%
2 Interest, 6%
General Government 1%

Protection 1%
Healthcare, 27%
Transportation 3%
3 Wefare, 11% Education 3%

Interest 6%

4 Wefare 11%

Defense 22%

5 Defense, 22%
Pensions 25%

Healthcare 27%

Pensions, 25% 0% 5% 10% 15% 20% 25% 30%

6

Source: Adapted from US Government (2014)

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USABILITY IN TERMS OF VISUAL DESIGN
Doughnut charts = an ink saving version of pie-charts
2009 2010 2011
1
Fixed
18% 19% Fixed 12%
20%
13%
21% Fixed
2 Base salary
Variable
Base salary

Variable
Base salary

Variable
Bonus Bonus
Bonus
36% PSP 39%
3 29%
34% PSP 32% AZIP
27% PSP
AZIP
AZIP

4 2010
2009 2011

5 Fixed 10% Fixed 11% Fixed

16% 24%
23% Base salary Base salary 26% Base salary
Variable Variable
6 Bonus
30%
Bonus
31%
Variable
Bonus
26% PSP
PSP PSP
AZIP 36% AZIP
35% 32% AZIP

Source: Adapted from Astra Zeneca (2012)

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USABILITY IN TERMS OF VISUAL DESIGN
Avoid crowded graphs
Sales by product
¥300.0
1
¥250.0

2 Too much information

¥200.0

on one graph creates

3 ¥150.0
confusion and relevant
4 ¥100.0 data is no longer
¥50.0
visible.
5
¥0.0

2010 2011 2012 2013 2014

Source: Adapted from MuRata (2014)

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USABILITY IN TERMS OF VISUAL DESIGN
Avoid crowded graphs
2010 2011
¥300.0 ¥300.0

1 ¥250.0 ¥250.0
*The black line represents the average ¥200.0 ¥200.0
value of the 5 analyzed years
2 *The green column represents the average
¥150.0 ¥150.0

sales value of all products ¥100.0 ¥100.0

¥50.0 ¥50.0
3
¥0.0 ¥0.0

4 2012 2013 2014

¥300.0 ¥300.0 ¥300.0
5 ¥250.0 ¥250.0 ¥250.0
¥200.0 ¥200.0 ¥200.0

6 ¥150.0 ¥150.0 ¥150.0

¥100.0 ¥100.0 ¥100.0
¥50.0 ¥50.0 ¥50.0
¥0.0 ¥0.0 ¥0.0

Source: MuRata (2014)

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USABILITY IN TERMS OF VISUAL DESIGN
“Simplicity is the ultimate sophistication” – Leonardo DaVinci

Source: Hichert (2006)

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USABILITY IN TERMS OF VISUAL DESIGN
Scales should start from 0
Capital expenditure and cash flow form operating activities
(EUR million)
1 3,500 3,290
2,992
3,000 2,842
2,566
2 2,500
2,405
2,273 2,356 2,359
2,499

1,991
2,000

3 1,500

1,000 Capital expenditure and cash flow form operating

2009 2010 2011 2012 2013 activities (EUR million)
4 Capital expenditure Cash flow from operating activities 3,500

3,000

5 2,500

2,000

1,500
6 1,000

500

0
2009 2010 2011 2012 2013

Capital expenditure Cash flow from operating activities

Source: Adapted from Luftansa (2014)

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USABILITY IN TERMS OF VISUAL DESIGN
Background
Strong colors are not Avoid using strong gridlines, as they
1 recommended for backgrounds. hinder visibility of data.
Homeownership Rates by Region Homeownership Rates by Region
80%
70.0% 69.3%
80% 70.0%69.3%
65.0% 66.5% 66.5% 65.0%64.8% 66.5%66.5%

2
70% 64.8% 62.5% 62.4% 70% 62.5%62.4%
59.4% 59.4% 59.4%59.4%
60% 60%
50% 50%
40%
40%
30%
30%
3 20%

10%
20%
10%
0%
United States Northeast Midwest South West 0%
United States Northeast Midwest South West

4 First quarter 2013 First quarter 2014

First quarter 2013 First quarter 2014

Homeownership Rates by Region

5 80%
65.0% 70.0% 69.3% 66.5%
70% 64.8% 62.5% 66.5% 59.4%
62.4%
60% 59.4%

Recommended visual 50%

6 40%
representation 30%
20%
10%
0%
United States Northeast Midwest South West

First quarter 2013 First quarter 2014

Source: Adapted from United Stated Census Bureau (2008)

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KPI TOOLKIT SPOTLIGHT: BALANCED SCORECARD

Source: The KPI Institute (2014)

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IN PRACTICE: SCORECARD
Medicare Australia BSC
• The BSC perspectives can be
adapted;

• 6 perspectives identified:
Financial, Services, Internal
Business Processes, Growth and
Development, People, Social and
Environment;

• For more consistency, the target

field should be the last one, not
inserted between actual results.

Source: Medicare Australia (2009)

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IN PRACTICE: SCORECARD
Department of Treasury and Finance, Victoria Government Procurement

• Fields like KPI definition, formula and purpose are not necessary on a scorecard, however data fields
(acceptable score, score this month, variance, trend) are important for understanding performance
results.
Source: Victoria Government (n.d.)

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IN PRACTICE: SCORECARD
World Bank Group
• The information is
crowded;

• Table design does

not help identifying
important
information;

• Objectives are not

clearly identified.

Source: World Bank (2014)

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IN PRACTICE: SCORECARD
World Bank Group
• The table is easy
to read;

• No gridlines, no
strong colors;

• No indication if
the actual
results
compared with
expected results
(targets) are
positive or not.
Source: World Bank (2014)

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IN PRACTICE: SCORECARD
Hospital Medicine Faculty, University of California
• The use of a 2 points scale may be too narrow: green - at and above
target; pink - below target;
• Given the lack
of objectives
or goals it can
be seen more
as an
operational
tool.

Source: University of California (2012)

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SCORECARD DESIGN
Checklist:
• Numerical guide (to show if data has been shrink, if this is the
case);
• Legend;
• Eliminate and minimize grids;
• Delineate and group data (strategic themes, perspectives,
objectives);
• Outline status of results ( ≥target, acceptable range,<target);
• Provide essential data (not nice to know information);
• Align characters appropriately;
• Use optimal size font for easy reading.
Source: CLIMB (n.d.)

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KPI TOOLKIT SPOTLIGHT: DASHBOARD

Source: The KPI Institute (2014)

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IN PRACTICE: DASHBOARD
Department of Treasury and Finance, Australia
• Traffic lights point out
areas with problems,
outlining where
actions must be taken.

• Colors used have a

meaning.

• Combines a variety of
visual representations
that are well
positioned in one
page.

Source: Department of Treasury and Finance (2013)

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IN PRACTICE: DASHBOARD
Franklin Lakes Police Department, USA
• No contrast
background, no
strong grids;

• Contrast colors for

bar charts to outline
different data sets;

• Interactive charts,
providing more
details for each set
of data.

Source: Franklin Lakes (2014)

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IN PRACTICE: DASHBOARD
Equinox Center

• Appropriate use of colors,

diversity of graphs used.

• A positive example of using a

pie chart.

Source: Equinox Center (2014)

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IN PRACTICE: DASHBOARD
The KPI Institute, Quickscore - SpiderStrategies
• Background
designed based on
thresholds to
provide instant
understanding of
performance
results;

• Monthly evolution
trends.

Source: Spider Strategies (2015)

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 DEVELOP THE HR DASHBOARD
Scenario:
• As Human Resources manager, you realized that the departmental
scorecard does not provide sufficient data to inform your decisions. In
this context, you decide to develop HR dashboard to have more insights
into everyday operations.

Tasks:
• Select the most relevant KPIs for the clusters already identified.

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 DEVELOP THE HR DASHBOARD
Working environment No.KPIs
1 # Applicant ratio
2 $ Average hourly compensation rate
3 # Compensation satisfaction index
4 # Entry level wage to local minimum wage
Talent development 5 # Employee engagement index
6 # Employee tenure
7 % Employees satisfied with compensation
% Employees that leave the organization in 6
8
month after hire
Recruitment 9 # Employment brand strength
10 # Employment offer acceptance rate
11 % Internal promotion rate
12 % Involuntary termination rate
13 % Performance appraisals completed on time
Retention 14 % Positions with succession plans completed
15 % New hire retention
16 # Sick leave days
17 # Time lost per health & safety incident
Compensation 18 $ Training cost per full time equivalent (FTE)
19 % Training return on investment
20 % Unscheduled absence rate

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KPI TOOLKIT SPOTLIGHT: PERFORMANCE HEALTHOGRAM

Source: The KPI

Institute (2014)

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 MANAGING PERFORMANCE THROUGH KPI
REPORTING

Source: Domo (2011)

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 SESSION REVIEW
1. Scorecards use tables to visualize data, therefore:
• It keeps tables simple;
• No grids, no strong color combination;
• Clusters data based on strategic themes, perspectives or objectives.

2. Dashboards:
• Bar charts: to compare individual values;
• Bullet graphs: to compare actual results to targets;
• Dial charts: to indicate threshold values;
• Line charts: to track trends;
• Pie charts: to compare different parts of a whole;
• Sparklines: to show trends in a condensed manner.

3. Avoid using:
• 3D graphs: distort data
• Pie and donut charts: inefficient use of space;
• Crowded graphs: data is no longer visible;
• Strong colors for backgrounds: hinder visibility.

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 REFERENCES
• Adecco Group (2013), Annual report 2013. Available at:
http://annualreport2013.adecco.com/fileadmin/user_upload/redakteure/ar2013/pdf/Adecco_Group_A
R2013.pdf
• Astra Zeneca (2012), Annual report 2011. Available at: http://www.astrazeneca-
annualreports.com/2011/documents/pdfs/annual_report_pdf_entire.pdf
• Centrelink (2010), Annual report 2009-10, available at:
http://www.humanservices.gov.au/spw/corporate/publications-and-resources/annual-
report/resources/0910/centrelink-annual-report-0910-full-report.pdf
• Digital Inspiration (2012), Choose the right chart type for your data, available at:
http://www.labnol.org/software/find-right-chart-type-for-your-data/6523/
• Domo (2011), How Fort Worth Police Department uses domo. Available at:
https://www.youtube.com/watch?v=pKbakXit9H4
• Equinox Center (2014), Quality of life dashboard. Available at:
http://www.equinoxcenter.org/assets/files/2014%20Final%20Dashboard%281%29.pdf
• Fusion Charts (2013), Line & area charts, available at:
http://www.fusioncharts.com/demos/gallery/#line-and-area
• Hichert (2006), Skalen ud deren manipulation, available at:
http://www.hichert.com/downloads/success/check/Skalenmanipulation_2006-11.pdf
• MuRata (2014), Investor relations. Available at:
http://www.murata.com/ir/information/sales_product/index.html

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 REFERENCES
• SA Health (2013), Emergency department dashboard. Available at:
http://www.sahealth.sa.gov.au/wps/wcm/connect/public+content/sa+health+internet/about+us/our+p
erformance/our+hospital+dashboards/about+the+emergency+department+dashboard/emergency+depar
tment+dashboard
• Spider Strategies (2015), QuickScore. Available at: http://www.integerperform.com/kpi-dashboard-
balanced-scorecard-software
• The KPI Institute (2014), KPIs Infographic. Available at: http://store.kpiinstitute.org/key-performance-
indicators-infographic.html
• Tufte, E. (1983), The visual display of quantitative information. Cheshire, CT: Graphics Press
• Tufte, E. (2001), Presenting data and information, One-day course, September 17, 2001. New York
• Unilever (2013), Making sustainable living commonplace, available at:
http://www.unilever.com/images/ir_UNI_10-Year_Charts_2013_030314_tcm13-384260.pdf
• United Stated Census Bureau (2008), Housing vacancies and homeownership, available at:
http://www.census.gov/hhes/www/housing/hvs/qtr407/graph407.html
• United States Government (2014), US Federal Budget Pie. Available at:
http://www.usgovernmentspending.com/federal_budget_pie
• United States Office of Personnel (2012), Annual performance report 2011. Available at:
• World Bank (2014), Data. Available at:
http://data.worldbank.org/indicator/GC.XPN.TOTL.GD.ZS/countries/1W-DE?display=default

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 REFERENCES
Images:
• CLIMB (n.d.), Best practices in designing tables. Available at:
http://www.northwestern.edu/climb/resources/written-communication/Best-Practices-Tables.html
• Equinox Center (2014), Quality of life dashboard. Available at:
http://www.equinoxcenter.org/assets/files/2014%20Final%20Dashboard%281%29.pdf
• Franklin Lakes (2014), Performance dashboards. Available at: http://dashboard.revelstonelabs.net/entities/281
• Medicare Australia (2010), Annual report 2009-10. Available at:
http://www.humanservices.gov.au/spw/corporate/publications-and-resources/annual-
report/resources/0910/centrelink-annual-report-0910-full-report.pdf
• The KPI Institute (2014), Human Resources Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html
• The KPI Institute (2014), Medical Center Performance Management Toolkit. Available at:
http://store.kpiinstitute.org/medical-practice-performance-management-system-toolkit.html
• The KPI Institute (2014), Performance Healthogram. Available at: http://kpiinstitute.org/research/about-
performance-management/performance-healthogram/
• Victoria Government Procurement (n.d.), Supplier performance scorecard. Available at:
http://www.procurement.vic.gov.au/CA2575BA0001417C/WebObj/KPIandSupplierPerformanceScorecardTool(Ap
pendix6)/$File/KPI%20and%20Supplier%20Performance%20Scorecard%20Tool%20(Appendix%206).XLS
• World Bank (2014), World Bank global scorecard. Available at:
http://siteresources.worldbank.org/CSCARDEXT/Resources/2014_WBG_corporate_scorecard_e-version.pdf
• University of California (2013), Division of Hospital Medicine Faculty Balanced Scorecard FY 2012. Available at:
http://hospitalmedicine.ucsf.edu/bsc/fy2012.html

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 COURSE REVIEW
10 takeaways to implement in your organization:

1. Connect your KPIs to strategy.

2. Articulate the KPI selection process – apply techniques like
KPI selection workshop, KPI clustering, VFA and KPI
balancing.
3. Avoid measuring what is easy to measure or familiar for the
organization.
4. Use a balanced approached of performance measurement –
Balanced Scorecard.
5. Use both scorecards and dashboards.

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 COURSE REVIEW
10 takeaways to implement in your organization:

6. Cascade the performance measurement framework down to

employee level.
7. Develop the performance measurement capability in the
organization.
8. Involve stakeholders in the KPI implementation project.
9. Avoid making irrelevant comparisons through flawed
benchmarking.
10. Analyze objectives and KPIs in correlation, not as isolated
elements.

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