This document discusses how to reassess KPIs for shared services to better measure performance. It recommends that KPIs not just focus on internal metrics but also include upstream measures outside direct control. KPIs should also consider the end-to-end process and not just outputs. Developing the right KPIs requires involvement from multiple levels of the organization and customers, and is an ongoing process that considers automation and focuses on key metrics rather than a comprehensive set.

1. HOW TO REASSESS YOUR KPIs TO
MEASURE THE SHARED SERVICES
PERFORMANCE THAT COUNTS
© Chazey Partners 2014

2. 2 | Chazey’s Toolkit – KPIs – July 2014
5 steps to Killer KPIs
While most operators prioritize Key Performance Indicators and SLAS when launching Shared Services, a year
into service delivery results are often disappointing – and that, despite these KPIs being met. What’s the
problem? Mainly, that KPIs as they exist now tend to be static measures of the point of exchange between the
SSO and the customer. However, as we all know (or if we don’t know, we are learning) many problems originate
upstream, outside the SSO’s scope, but have a significant impact on the SSO’s output. Here are some pointers
on how to design KPIs that support better client relationships and provide a more realistic measure of success.
1. Don’t rely on inward metrics when developing KPIs. If you only measure your“in scope”activities,
you may draw the wrong conclusions. For example, you may find that your KPI metrics demonstrate failure –
say, in cash collection – whereas an end-to-end process review and root cause analysis would highlight
process faults upstream of the credit control function that are leading to sub-par performance. It’s important
to create metrics that give visibility to areas outside your direct control, and which drive the right behaviors
through the end-to-end process.
2. Don’t rely on output KPIs which measure the success/quality/effectiveness/delivery of the“outputs”
from the processes owned by the SSO. Although these metrics do link directly to meeting customer require-
ments (as agreed in the Service Level/Partnership Agreements) they don’t necessarily measure the most
desirable outputs from an organizational viewpoint. Outputs are only one part of the process. Make sure you
understand the relationship between different output levels and business impact.
3. Don’t focus overly on operational KPIs which measure whether the SSO is operating effectively or
efficiently, whether it’s achieving its objectives and strategic goals, and whether the group is working as a
team. These are often informal measures that don’t necessarily impact the SSO’s customer experience. It’s
important to track your efficiency metrics but they should not in themselves be a target output.
4. Do include upstream measures like input/reverse KPIs These measure required“inputs”that
directly correlate with the quality of SSO outputs. An Input KPI will measure whether the right information is
being received at the right time from another department – in other words whether the SSO is being supplied
with the right quality of information at the right time. These measures provide a foundation for building
expectations, but are not about disciplining or reprimanding. They are an important indicator for the quality
of inputs, and effectively highlight the responsibility of the SSO’s business partners.
5. Do leverage individual KPIs to track whether team members are hitting relevant performance
targets. These should form part of an SSO’s performance management and individual development frame-
work, but they are not about punishing individuals. Rather, these are about creating understanding on how to
appropriately manage the workforce, and they can help you identify areas that need improvement or support,
for example through training.

3. 3 | Chazey’s Toolkit – KPIs – July 2014
How do you identify the right metrics?
There are a few proven approaches to developing a KPI structure. For example:
• Don’t create metrics“top-down”– involve multiple levels in the organization.
• Don’t assume – involve your customers.
• Don’t expect it to be a one-time meeting – developing KPIs is a process that requires thought and
..................consideration. Hold workshops and keep the conversations going.
• Expect your KPIs to change over time – something that is key today may not be important in a year’s
................. time. Be willing to change your metrics on an ongoing basis.
• Do consider automation – don’t create metrics that require weeks of manual effort to compile.
The Word is “Key”
KPIs are about“Key”performance indicators, not a complete measurement of everything that can be tracked.
The goal is not to produce an encyclopedia of metrics every month. If you do so, the important messages will
be lost and discussions around performance will become muddled.
Focus on the key measurements and you will build stronger relationships with your customers and take your
Shared Service Organization to the next level.
(For more details on the types of KPIs, please read “9 Critical Components to Develop a Successful Client
Interaction Framework”)
Types of KPIs

4. Phil Searle
CEO & Founder
+1 408 402 3008
philsearle@chazeypartners.com
Phil Searle
CEO & Founder
Chazey Partners
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philsearle@chazeypartners.com
David O’Sullivan
Co-Founder & Partner
Chazey Partners
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Managing Director, North America (West)
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Christina Exarchou
Head of HR Practice EMEA
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Managing Director, Latin America
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Managing Director, Asia, Middle East and Africa
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4 | Chazey’s Toolkit – KPIs – July 2014
Janey Jux
Head of Public Sector Practice EMEA
Chazey Partners
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Emer O’Kelly
Regional Director, Europe
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Robert Towle
Managing Director, North America (East)
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