information delivery kpis

The Organisation As A System

An information management framework

The Performance Organiser

Information Delivery – KPI’s

http://www.jit-software.com/

Key Performance Indicators


Key Performance Indicator (KPI) Definitions

•Key Performance Indicators – Measurements that represent the status of an operational area and progress made to reach operational objectives

•Indicators used to provide measurements of the defined priority and key success factors of a project or system

•KPI measures the quantifiable performance of an activity that is critical to the success of an organization



The Purpose of KPI’s

The primary purpose of a KPI is to detect, monitor and illustrate variance in behaviours in processes, with a view to reducing variance to acceptable limits.

At the point at which variance is reduced or eliminated, then the process that a KPI is monitoring should be running at optimum efficiency.




KPI’s Are Not...

•Performance targets

•Objectives

•Strategy




KPI’s

•Are decision support aids

•Should be evidence based using supporting data where such data exists

•May be related to each other both top down and laterally

•Should be capable of being linked to each other to present perspective based view of organisational performance that are not necessarily based on the organisation management structure




KPI’s •KPI provide objective evidence related to the probability of the achievement of Vision and Mission based objectives. •KPI’s provide one of the most significant links available to an organisation between strategy and process•Part of the descriptive attributes of a KPI should be the means to link a KPI to other information dimensions the organisation may have identified.•KPI Data collection should be as unobtrusive as possible, where data collection does intrude on normal operations, it should require minimum additional effort to complete satisfactorily




KPI’s •KPI provide objective evidence related to the probability of the achievement of Vision and Mission based objectives. •KPI’s provide one of the most significant links available to an organisation between strategy and process•Part of the descriptive attributes of a KPI should be the means to link a KPI to other dimensions the organisation may apply.




KPI Measurement Principles



Principles of Measurement

•Two classes of measurement•Quantitative (the number of things produced)•Qualitative (fitness for purposes)

• For each class of measurement, there is a need to determine the achievable mean value that a process being monitored is expected to deliver.•There will be several types of variance that can be applied to the mean:

•Better than average behaviour•Worse than average behaviour•Because of the impact of “better than” or “worse than” behaviour, changes to the achievable mean over time.

•Measurement will reflect some form of reporting cycle, typically, though not always, articulated in some sort of time based form.




Data collection and integrated coherent and coherent analysis tools






ProcessInputs Outputs

•Data collection for KPI’s occurs at the process level•KPI data should support the identification of changes in the maturity state of goods or services being developed or delivered in the process under review when using the resources allocated to it. •Changes in maturity are the measurable transaction points at which data can be collected.





ProcessInputs Outputs

Input change state at the point of entry into a

process

Output change state at the point of exit from a

process

Internal changes brought about by

work carried out in process related

procedures and tasks

Measurable transaction points





Achievable mean

Best behaviour

Worst behaviour

Time

Qua

litat

ive

or Q

uant

itativ

e S

cale

Triggers best practise investigation

Triggers worst practise investigation

Process optimisation

Moving Range Performance Measurement





Distribution Performance Measurement

Qua

litat

ive

Quantitative

-ve +veAchievable mean

1 sd2 sd3 sd 1 sd 2 sd 3 sd

SD = Standard Deviation

ExtremeFailure

ExtremeSuccess





Rolling averages..

•A kpi date set, with a reporting cycle, will generate a distribution that reflects the cycle in terms of the point in the cycle that data is collected.•Divide the reporting cycle into segments of equal duration in the cycle•Identify a segment grouping parameter•For each segment, calculate the average of the grouping parameter





Reporting Cycle = one year.

J F M A M J J A S O N D

12 36 12 45 23 12 11 36 12 88 23 12

Score for each month

Rolling Averages Example

Current Achievable mean = 22Rolling average cycle = 3 monthsFirst rolling average calculation takes place in MarchAnd consists of the average of the count for January, February and March ((12 + 36 + 12)/3) = 16Carry out similar calculations for each cycle segment


12 36 12 48 23 12 11 36 12 88 23 12

16 32 27 27 15 19 19 45 41 41

Possible achievable mean is the average of the rolling averages which is 28.2

The achievable performance target therefore can be raised based on objective evidence

Quarterly rolling average






12 36 12 48 23 12 11 36 12 88 23 12

16 32 27 27 15 19 19 45 41 41Quarterly rolling average

Attach “Red”, “Amber”, “Green” tolerances to rolling averages to give flag state indicators. The aim is to detect variance in average values.



Dashboard based information delivery





Board

Senior Management

Middle Management

Shop Floor

Strategy

Action

The purpose of dashboards is to provide in context views of organisation performance




Economic(Accounting Measures)

Efficient(Benchmarking etc.,)

Evolution(Legislation,

Modification Programmes)

Effective(Customer Satisfaction)

Identify Perspectives or views of organisation activity




Specify KPI’s so that they support a single perspective

No of widgets Produced

No of widgets unfit for purpose

Qualitative and Quantitative pairs




Identify Cross Perspective Links



Cost of raw materials




Board

Senior Management

Middle Management

Shop Floor

Strategy

Action

Identify top down composition of reporting needs which gives the means to identify the level of detail required at each organisational level




For each indicator provide drill down into single kpi dashboards





Single KPI Dashboard

Key Performance IndicatorsQ

ualit

ativ

e

Quantitative

Achievable mean

Achievable

Best

Worst

Time

Qua

lita

tive

or

Qua

ntit

ativ

e S

cale


12 36 12 48 23 12 11 36 12 88 23 12

16 32 27 27 15 19 19 45 41 41

Current achievable mean = 22Achievable mean = 28Flag state = RED

For each indicator provide additional documentary evidence



To optimise the process, the achievable mean can be moved toward the upper tolerance limit and the lower tolerance can be raised too

Key Performance IndicatorsQ

ualit

ativ

e

Quantitative

Achievable mean

Achievable

Best

Worst

Time

Qua

lita

tive

or

Qua

ntit

ativ

e S

cale


12 36 12 48 23 12 11 36 12 88 23 12

16 32 27 27 15 19 19 45 41 41

For each indicator provide additional documentary evidence




Key performance indicators are the performance monitoring and reporting requirements of an information management framework.

KPI’s should be specified so that they identify where in the organisation data can be sourced, how data once collected is to be manipulated to produce information and how and with what frequency the resulting information is delivered.

KPI’s trigger investigation, but are not normally performance targets.


information delivery kpis

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