KPI’s helps in measuring specific goals, which are set for specific purposes. It helps in evaluating the performance of the company in terms of goals. Once the goals are achieved then the company grows. KPI’s help in measuring these goals as they are the standards set by the company managers. 1. Market Leaders KPI’s helps in becoming the market leader. Leading companies set the examples for other companies through their increased market share and through their efficient way of doing things.
1. Desired VS actual results KPI’s helps in evaluating the gap between the desired and actual results. KPI’s set the parameters for evaluation of the goals. Operations can only be improved by analyzing the gaps between the goals experienced. In this way companies enhance the learning culture. 1. Achieving results KPI’s helps in achieving the objectives set for the company. Planning can only be done once the KPI’s are identified by the company managers. They set the patterns on which objectives are evaluated and leads to goal attainment.
1. Adopt good practices KPI’s helps in adopting good practices of the organization. If goals are not achieved then their must be some problem in identifying the KPI’s for that particular organization or department. 1. Improvement KPI’s helps the organization in improvement of its operations due to set of standards identified by the top managers. As I have already described the gap identification which leads to improvement. 1. Reporting procedure KPI’s is used for external reporting procedures. Variables are identified which necessary for external reporting.
1. Management functions KPI’s are monitor progress toward a variety of goals and its helpful for managers to perform their functions as well as make quick and effective decisions. 1. HRM HRM is the organizational function that deals with issues related to people such as compensation,Hiring, training, performance evaluation, Leadership, planning, monitoring and other human resource activities have different KPI’s namely job description analysis, performance chart, recruitment advertisements etc.
1. Product/ service development Innovation matrix, balanced scorecard, mosaic management, prioritization, successes failures/ lessons learnt, trade offs, MBO, succession planning, investment appraisal, TBC, technology audit, SCORE, quality circles, decision making, recruitment appraisal, creativity, product age profile, period of grace, trade offs, halo effect, identification of new product/ service concepts, synergy, cannibalization, protocol, IPLC, certification, cascade investment, technology transfer, first mover advantage, time management have different set of KPI,’ on which product and service development is examined.
For example Product age spread, R&D%, ideas, strategic fit, budget ratio, protocol score, total cycle time, project review, team creation, testing, % outsourcing, NPDER, budget ratio, license fees, IPR%, IPR infringements, IPR maintenance costs, royalty rate %, time, productive hours %, budget, specification, project success, internal service satisfaction levels, effective headcount. 1. Contingency planning Contingency plans are the alternatives in case of variability.
It includes Authority and responsibility, planning and monitoring, budgeting, successes failures/ lessons learnt, creativity, SCORE, investment appraisal, assumptions, high risk/high probability, Black Swan theory, failure points, reducing potential for failure, setting trigger points, action plan, risk profile, stage gate, team building, communication, training, TEWT, simulations, role play, impact analysis and for these activities, KPI’s used by different organizations are Risk score, response times, budget ratio, KFR, % outsourcing, % SOP, % training, % above/below barrier conditions, success rates, % budget. In this way different organizations have different set of KPI’s based on their nature of business.
1. www.electroiq.com , Article named as commercialization of stretchable electronics written by Dr Peter Harrop, Chairman, IDTechEx.
2. McMahon, D. (2006) ‘Measuring treasury’s added value’, available at http://www.gtnews.com/article/6472.cfm (accessed 20 April 2012).
3. Emerald article named as commercialization of new manufacturing processes, written by Vern Simpson.
4. Jstore article named as Leadership and Innovation: Relating to Circumstances and Change written by Jim Selman.
5. Jstore article named as selecting the right key performance indicator, written by Anthony Mcneeny