OPERATIONAL KPIs – THE IMPORTANCE TO THE SUCCESS OF THE BUSINESS(PART 1 OF 3)

Whether you are using dashboard, scorecards (balanced scorecard, etc), business intelligence tools or query tool reporting, there is an urgent need for management  to understand the importance to identify, define, track, and act upon operational key performance metrics / indicators. 

[ Earlier article on kpa & kpi has shown to management the importance of creating, maintaining and monitoring such company’s kpa/kpi to meet company goals.]

In brief, Management need to understand the key operational business drivers that affect company performance ;establish a corporate and / or departmental set of operational KPIs ;align operational KPIs with line-of-business goals and incentives; provide a method for making KPI-based performance visible to the enterprise; create an on-going process for internal and external KPI review, evaluation, and re-alignment.

Executives and line-of-business management are feeling the pressure to enable timelier and more accurate decisions in order to improve operational efficiencies. The faster and more accurately KPIs can be accessed, reviewed, analyzed, and acted upon, the better an organization can manage day-to-day operations and customer interactions.

In the Abeerdeen report conducted in December 2007,  improvement of operational efficiencies ranked the top amongst the concern of management:

1. Improvement of operational efficiencies
2. Accuracy of business decisions
3. Timeliness of business decisions
4. Improve management view to operation
5. Meet profitability objectives

Very often, management find its difficult to get the correct operational kpi for a business due to perhaps the need to integrate data from a variety of disparate sources ; the need to have a host of infrastructure requirements to deliver the information in a meaningful format  like reports / dashboards, scorecards, alerts and via an effective medium (desktop, web, remote access, email, PDAs, mobile devices) and others.

[ See Part 2 on some of the best in class practise operational key performance operational kpi ]

• EXAMPLES OF SOME OF BEST-IN-CLASS PERFORMANCE METRICS USED FOR OPERATIONAL KPI ( Part 2 of 3)
• AN EXAMPLE OF USING OPERATIONAL KPI TO GAIN COMPETITIVE ADVANTAGES ( PART 3 OF 3)
• Targeted Performance Management (TPM) – An Overview
• Credit Management: An Overview, its Importance and Characteristic of a Company having a well run credit management department
• Issues Or Challenges In Managing Working Capital
• The Changing Role of Finance: Business Partnering- A Small Example ( Part 5)
• Operational Headquarter: Diagonal’s Shift from Singapore To KL