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KPI mahsa sharifi 2012

  1. . What is KPI Provided by : Mahsa Sharifi. Why is it good for you Email Address:
  2. Measuring performance • Measuring something is the best way to make it improve, • if you don't measure, you don't really know what's going on. • To Evaluate • To Control • To Budget • To Motivate • To Promote
  3. KPI Examples and Templates. • KPIs, metrics, and ratios for any department in your organization. Key performance indicators (KPIs) do exactly what their name suggests: they provide an indication of your performance by measuring key processes. By monitoring the right KPIs, you can gain valuable insight into your performance and make the adjustments needed to optimize your performance. • they provide an indication of your performance by measuring key processes • The challenge is knowing which KPIs are most important to monitor to get the results you want. That's why we've put together this list of KPIs for each department in your organization. Each KPI should come with a definition, calculation, and example. • The challenge
  4. Categorization of indicators • Quantitative indicators which can be presented as a number. • Practical indicators that interface with existing company processes. • Directional indicators specifying whether an organization is getting better or not. • Actionable indicators are sufficiently in an organization's control to affect change. • Financial indicators used in performance measurement and when looking at an operating index.
  5. Managers should know the answers…
  6. Why are KPIs important? • Managers are overwhelmed and distracted with day to day activities and tasks. • Managers must make important decisions, quickly, with greater consequences, and often with limited information on hand • Managers concentrate on the tactical decisions and neglect the strategic ones
  7. KPI Row # Progress Change EX # of new 95% Complete % change increase in sale customers Sources Database Project Plan Database Frequency Monthly Quarterly Monthly Target
  8. Problems
  9. Still Not convinced ?Why KPI ? • Say ‘Yes’ to Key Performance Indicators (KPIs) Because Guess Work is for D! KPIs give you a complete picture of plan vs. actual results. KPIs give you a complete picture of plan vs. actual results.
  10. KPIs should focus on a single strategy • KPIs should all be linked to the strategy • • KPIs should be consistent • • KPIs should be mutually reinforcing
  11. Measuring performance !
  12. How should KPIs be used? • Communication • • Informing • • Diagnostic • • Learning • • NOT controlling
  13. Some Generic KPI Measures to warm up with Strategy Goal Drivers Measurement customer Improve customer Decrease lead time Average Lead Time satisfaction Deliver on time % deliveries on time Internal Business Continuously improve Decrease Cycle Time Average Cycle Time business processes Increase Quality # of Defects; % Increase Productivity Rework Output per employee Financial Continuously Improve Decrease Costs Average Unit costs Financial Increase Sales growth Growth Rate in Sales Performance Increase Market Market Share Share Innovation and Deliver new Products Increase sales of new learning and Services products and services Reduce development time
  14. You are what you measure. • Measure. Find insights. Take action. OR die trying
  15. You Are What You Measure, So Choose Your KPIs Wisely! • 1. Page Views vs. Visitor Loyalty. It forces a focus on the long term and on the right entity
  16. • 2. Revenue vs. Economic Value Economic Value is the sum of Revenue plus the Business Value created by the macro- plus micro-conversions on your website Pick Economic Value, your parents will be proud of you !!!!
  17. • 3. Time on Site vs. Task Completion Rate
  18. • # of Installs vs. 30 Day Actives Use 30 Day Actives as your KPI. Build a stronger profitable business
  19. Are we on the same page ? • It is important to point out that I'm not advocating that you stop measuring page views, revenue, time on site or # of installs. They are all fine metrics. You'll most likely use them as diagnostic measures when you analyze the metrics I do recommend you shift to. • I'm advocating that you not make them KPIs, don't crown them God, don't allow your employees to solve just for the primitive six. Because none of these six metrics incentivize optimal behavior or business outcomes. • You become what you measure, so why not solve for what actually matters? • Let me close with a quote on incentives, from the inimitable Steve Jobs… • "Incentive structures work. So you have to be very careful of what you incent people to do, because various incentive structures create all sorts of consequences that you can't anticipate. Everybody at Pixar is incented to build the company: whether they're working on the film; whether they're working on a potential direct-to-video product; whether they're working on a CD-ROM. Whatever their combination of creative and technical talent may be, we want them incented to make the whole company successful." • No one could have framed it better than Steve. • Incentive structures are not a web analytics problem. They are an organization design problem. But in choosing the optimal metrics to crown as heroes we can use data to incentivize the right behavior, value creation for a company, and deliver happiness to customer
  20. How to implement KPIs Step 1: Define Strategic Specifics • • Define Your Strategy • • Vision, Mission and Values reflect strategy • • Set Goals • • Most important business objectives • • What “drivers” are critical to success • • What impacts driver results (leadership, training)
  21. How to implement KPIs Step 2: Audit Existing Measures • • Assess strategic fit • • Identify what data is available • • Review Measurement Processes • • Accuracy • • Timeliness • • Identify Gaps
  22. How to implement KPIs Step 3: Develop New Measures • • Bridge the gaps, examples of strategic data • often missing: • • Employee Satisfaction Survey • • Customer Satisfaction Survey • • Rework % • • On-time Delivery %
  23. How to implement KPIs Step 3: Develop New Measures • • Measures must reflect performance and • progress of the business • • Must be quantifiable • • Must be compared to another number • • last year • • budget/goal • • trend • • Can be acted upon
  24. How to implement KPIs Step 3: Develop New Measures • • KPI title: Employee Turnover • • Defined: number of employees who resign or are • terminated for any reason divided by the number of • employees at the beginning of the year. Reductions • in force excluded • • Measured: Payroll termination report by reason • • Goal: Reduce turnover by 10%; FY 2009 objective is • 15 %.
  25. How to implement KPIs Step 4: Analyze and Report • • Easy to Read • • One Page Summary • • Graphs
  26. How to implement KPIs Step 5: Continuous Improvement • • Set Priorities base a stragegy • • SMART Goals • • Assign Accountability • • Track Improvement • • Set New Goals
  27. Sample KPI Measures: Marketing and Sales • • Market Share • • Leads by Source • • Number of Prospects • • Conversion Ratio • • Average Dollar Sale • • Profit Per Customer • • Sales by Product Line • • Number of • Transactions/Customer • • Customer Satisfaction
  28. Sample KPI Measures: Marketing and Sales • • Number of new • customers • • Brand Awareness • • Value of Brand • • Number of Customers • • Referrals • • Sales Mix • • Customer Profitability • • Number of Orders • • Customer Retention • • Reasons for losses • • Lifetime
  29. Sample KPI Measure: Financial • • Dividends • • Current Ratio • • Quick Ratio • • Credit rating • • Days Sales Outstanding • • Revenue • • Profit Margin • • Gross margin • • Revenue/Expense Ratio • • Variable vs non-variable • expenses • • Credit rating • • Return on Investment
  30. Sample KPI Measures: People • • Number of Employees • • # of mangers • • Manager/employee ratio • • Absenteeism • • # new employees • • Hours or $ of training • per employee • • Ratio direct to overhead • employees • • Cost per new hire • • % employees fully • trained
  31. Things Every Owner Should Know • The profitability of the business depends on how well the employees consistently perform critical activities. • Employees perform best when they understand how their performance affects the bottom line, and how their performance is measured.
  32. Things Every Owner Should Know • Small changes in critical areas can have a great impact on the bottom line. • What gets measured gets done, and what gets rewarded gets done again.
  33. Problems of experts. • In practice, overseeing key performance indicators can prove expensive or difficult for organizations. Some indicators such as staff morale may be impossible to quantify. As such dubious KPIs can be adopted that can be used as a rough guide rather than a precise benchmark. • Another serious issue in practice is that once a measure is created, it becomes difficult to adjust to changing needs as historical comparisons will be lost. As such measures are kept even if of dubious relevance, because history does exist. • Comparisons between different organizations are often difficult as they depend on specific in-house practices and policies.
  34. Sample KPI Trend Report
  35. Sample KPI Report Template
  36. NOW please prepare KPI of your own department.