Thursday, November 08, 2007

Key Performance Indicators (KPI)

I was recently asked for my opinions on Key Performance Indicators (KPIs). The entire article can be found here.
KPIs or critical success factors are measures of an organization's overall health and well being. They measure what is done well and what could be done better. There are two important things to remember when working with KPIs. First of all, it’s important to have a strategy in place before implementing a program. The measures should have an actionable component in them. For example if you are measuring manufacturing defects the actionable component would be quality control. The second thing to consider is to not have hundreds of KPIs for any given process. They become unmanageable and create seemingly contradictory results that basically end up as statistical noise.


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