Implementing Key Performance Indicators

Implementing Key Performance Indicators is a logical exercise, but the practice depends on changing the culture of the organisation.

This is the high level task list for the implementation of KPIs:

  • Review strategy and business plans and interview key stakeholders.
  • Review profitability measures and provide recommendations.
  • Develop balanced performance management framework that maps back to driving business objectives and business case.
  • Design a balanced tracking mechanism/benefits scoreboard and related tracking processes.
  • Develop a data dictionary for key performance measures and set performance targets.
  • Develop a system to collect and report the KPIs.

The tangible deliverables would normally include:

  • Balanced performance management framework and scorecard design
  • Performance measurement definitions, formulas, benchmarks, and targets
  • Performance monitoring process.

The problem is not in the tangible deliverables but in gaining acceptance to the targets and monitoring process throughout the organisation. Where KPIs are being defined for the first time, this can be a significant change in the performance management culture of the company and will need careful change management to ensure that it is used.

It will help to improve the speed of implementation if the system is seen to be fair, independent and understandable and if it is linked to rewards for favourable performance.

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