Key Performance Indicators
KPI Selection
How Many KPIs?
For any business, there should really be no more than 20 KPIs selected to manage
the business by. If there are more then difficulties arise in managing and assimilating
all the pieces of information. If a business wants to manage itself with the "balanced
scorecard" approach, then there should be no more than five KPIs in any one "KPI
group".
Typical KPI groups are: operations, finance, human resources, safety, sales, production,
etc. These KPI groups obviously will be different for each business. This balanced
approach is not necessarily always the best approach to take - it is dependent very
much on the business, the management, the management style and the industry. If
there are too many KPIs in total then it becomes difficult to manage the business.
If there are too many KPIs in one KPI group then the business becomes focused on
just one business aspect, perhaps letting other areas suffer.
Sample KPI measures expressed as a business question
- What is my average sales value in a region vs target?
- Which colour widget
is my best selling in higher income target groups?
- Are my staff above or below
the industry standard sick day targets?
- How many breakages for machine M can
be expected in a year and does this meet target?
- How is my company doing overall
on my 5 most important measures vs target?
Our consultants have had many years of business intelligence consulting
experience including KPI selection and dashboard design. Some industries that we have
have experience in including manufacturing, telecommunications, wholesale foods,
drinks retailing, healthcare and insurance. Our experience continues to broaden
and you may find these links with example KPIs helpful - motor vehicle service KPIs , residential care KPIs ,
retail KPIs.