Top 20 KPIs 2016 - Extended Edition

TOP 20 KPIS 2016 EXTENDED EDITION

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REPORT HIGHLIGHTS Given the economic context and the methodological advancements of today, organizations increasingly focus on managing and measuring performance as a key component in achieving the desired performance results for generating business value. Key Performance Indicators (KPIs) embody the critical component of modern performance management and measurement systems. As such, there are many organizations today that have diverse performance management initiatives, which entail the measurement of results against targets by using KPIs. To provide a glimpse into the use of KPIs in practice, The KPI Institute has launched its first edition of Top KPI reports in March 2011. The reports were dedicated to analyzing the most popular KPIs across major functional areas and industries. The Top KPIs report series, have

now reached their third and most comprehensive edition, while reflecting on the enriched experience of the editorial team in publishing such reports.

The Top 20 KPIs Report - 2016 Edition compiles the most popular KPIs used by global organizations throughout the 2009-2015 period. The methodology used to advance this report consists in ranking the KPI examples documented and published on smartkpis.com, based on the number of views collected from 2009, until 2015. The hundreds of thousands of visits on smartkpis.com and the thousands of KPIs visited, bookmarked and rated by members of the online community in these six years provided a rich data set, which combined with further analysis from the KPI Institute’s editorial team, formed a basis for the hereby presented research report.

“One of the most important benefits that this report brings is an international perspective on the most popular 20 KPIs in the smartKPIs.com database.”

Value added by Top KPIs Reports to practice

REPORT CONTENT Best practices

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PURPOSE

RESULT

Enable learning

Improved Performance Measurement Competencies

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SMARTKPIS.COM COMMUNITY PROFILE Since its launch in 2009, smartKPIs.com established itself as the favorite destination for professionals around the world interested in high quality documented examples of metrics. With hundreds of thousands of page views and more than 79,000 members from 250 countries, smartKPIs.com is one of the most used performance measurement resources online.

What sets the smartKPIs.com community apart is the profile of its members, as it is a truly global community, with relatively uniformly spread representation in terms of membership around the world. While the highest number of members come from English speaking countries, no single country dominates in terms of representation. The same applies in terms of organizational size, as smartKPIs.com memberships are popular among small size companies (11-100 employees), but also across medium and large organizations (+10,000 employees).

 United States - 15.24%

 United Arab Emirates - 3.53%

 Malaysia - 3.72%

 Canada - 2.88%

 Saudi Arabia - 3.45%

 Australia - 6.69%

 United Kingdom - 5.29%

 India - 12.28%

 Other - 44.29%

 South Africa - 2.32%

 Indonesia - 2.43%

5

4 1

2

3

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Throughout 2013 and 2015, the smartKPIs.com.com community has experienced a growth of more than 30%. The increase discloses a rising demand for performance measurement tools. The fascination with KPIs is also reflected in the increasing number of views recorded by the site in the period afore-mentioned.

In terms of industry affiliation, the majority of smartKPIs.com community members operate in the Consulting industry. The Information Technology and Manufacturing industries closely follow in the hierarchy, which reflects on the steadfast interest for

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ABOUT KEY PERFORMANCE INDICATORS (KPIS) In many domains of human activity, the usage of tools is essential for achieving the desired results. Measurement and evaluation make no exception, being equipped with both conceptual and physical tools. Of the first category, at the core of any performance measurement and management system are the Key Performance Indicators (KPIs) used. They provide the important data that is monitored and reported within an organization, by using scorecards or dashboards.





METRICS FOR MEASUREMENT

KEY PERFORMANCE INDICATORS



FOR PERFORMANCE ASSESSMENT





In practice, the terminology used to express them is diverse. The most common expressions are: performance indicators, metrics, key performance indicators or key result areas. Both academic and practitioner literature use these terms interchangeably, oftentimes even within the same organization. This can cause confusion among stakeholders, and it can also affect the way these tools are used in practice. Establishing a common terminology at organizational level brings everyone on the same page and facilitates a consistent approach to KPIs. To bring more clarity in working with KPIs, The KPI Institute recommends the following approach:

KEY RISK INDICATORS FOR RISK ASSESSMENT

ANALYTICS FOR DECISION MAKING

METRIC It has its roots in the word “metron”, used in ancient Greece to reflect measurement. Metrics refer to something we can measure, a value, or a quantity. Examples of metrics are: # Air temperature, # Air quality, # Water depth, # Height, # Weight or # Employees. When metrics reflect the achievement of a desired state, they become Key Performance Indicators. Oftentimes, metrics represent the subordinated measures used for calculating a KPI.

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KEY PERFORMANCE INDICATOR (KPI) A measurable expression for the achievement of a desired level of results, in an area relevant to the evaluated entity’s activity. KPIs make objectives quantifiable, providing visibility into the performance of individuals, teams, departments and organizations and enabling decision makers to take action in achieving the desired outcomes.

Typically, KPIs are monitored and communicated through dashboards, scorecards and other forms of performance reports.

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TARGET SETTING: FROM THEORY TO PRACTICE Ask any retail consultant or sales agent about targets, and you will be bombarded with all the information they know about them. Each of their daily routines revolves around target achievement. With such positions, performance reviews are executed on a monthly basis, and targets are designed to motivate and increase performance levels.

However, strenuous targets that aim for the stars can often be the cause for stress and self-devaluation, when they are repeatedly under-achieved. Setting targets might be easy when you’re at the top, but does it make sense to the ones at the bottom?

The implications of inadequate target-setting are immeasurable. Easy targets cannot be incentivizing enough to motivate performance. Stretch targets, otherwise known as the targets pushing the boundaries on what can realistically be achieved, can reach such a high level of demotivation that they negatively impact employee retention. Targets for control in many instances result in a dangerous combination of human greed and mechanistic behavior. Inappropriate targets can ultimately harm customers and generate risks.

In order to avoid tunnel behavior, lack of ethics, or risky decisions, it is important to conduct an efficient target setting process:

 Target setting

 Using thresholds

Based on the company’s historical data, on benchmarking studies, and on market analysis can provide valuable information and reference points in determining the appropriate level of targets.

Instead of targets provides a more detailed image in regards to performance. By replacing inflexible digits with intervals, thresholds can relieve the pressures of unilateral results.

 Decomposing

 Cascading targets

Long-term targets into short-term targets ensures a step by step approach that guarantees a sustainable development path for the organization.

Gives employees accountability for growth both within, and together with the organization. Organizational alignment is paramount to the achievement of ambitious company goals.

TARGET SETTING

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DATA ANALYSIS The digitalization of global information systems, has spawned large volumes of data that have gradually become more difficult to manage. Having understood the characteristics of big data, the corporate world has been seen trying to contain it and build on the opportunities of its inductive abilities. In practice, many organizations are facing challenges like: `` Too much data, losing sight of what is important; `` Lack of expertise in processing the data; `` Lack of insight into the true meaning of data; `` Data gaming in presenting the data; `` Resilient focus on past performance.

 Too much data There is this common expression used to reflect on the overwhelming effect of big data. “Drowning in data” is a phrase that many of today’s managers have become acquainted with. One of the challenges in handling large volumes of data is related to the right database management systems and business intelligence tools needed to compute big data. There are few companies that own the right infrastructure to deal with big data issues, and the ones that do, should not forget about a well-articulated strategy to go with their technologies.

Just because one has the infrastructure to measure everything, it does not mean one should actually do so.

A consistent strategy will assist management with making use of only what’s essential and making use of the data that really makes a difference.

 Lack of expertise in processing the data Working with numbers is not a job for everyone and, like with any other practice domain, organizations need subject matter experts such as data analysts, or statisticians, to provide quality data. Key quality dimensions of data are related to accuracy, completeness, timeliness, consistency and uniqueness. Specialists who can provide quality data may be difficult to find and expensive to hire, but they can turn into a valuable investment for the organization.

 Insufficient insight into the true meaning of data One can agree that numbers have the ability to reflect on the objective reality of our business, but the way one chooses to interpret and use those figures can widely

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TEMPLATE DESCRIPTION: PAGE 1 KPI 7

% Net promoter score

2 Functional Areas Marketing & Communications 3 Sub-categories Marketing sK1303 4 KPI Record

1

5 Industries Sub-categories Tags

Any Any portfolio, customers

Calculation

Description 6 Definition

9 Subordinate metrics Measures the net difference between promoters and detractors, of all customers .

7 Variations

% Promoter score % NPS

8 Related KPIs

% Customer satisfaction with new products and services

A = # Promoters B = # Detractors C = # Customers

10 Calculation formula

(A/C)*100-(B/C)*100

11 Trend is good when

Increasing

Data Profile

Focus 12 Purpose

To monitor the level of customer satisfaction by evaluating the extent at which customers act as brand ambassadors.

13 BSC perspective

Customer

14 Objective measured Increase customer advocacy

15 Data capture period

Spot

16 Standard reporting frequency

Monthly

17 Data collection method

Customer satisfaction surveys

18 Limitations

Being based on customer surveys, results can be altered by the respondents’ subjectivity.

Targets 19 Threshold examples

20 Target setting notes

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

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Red: <50%

Yellow: 50-70% Green: >70%

Benchmarking is promoted by Satmetrix, a co-developer of net promoter, benchmark figures being available on their online community.

Analysis and Resources 21 Overall notes 23 References NPS is used nowadays by many large companies as a 1. Bain & Company (2012), Creating a reliable metric, available customer feedback tool. It gives an unambiguous number at: http://www.bain.com/publications/articles/creating-athat is easy to understand for all employees and useful as reliable-metric-loyalty-insights.aspx input for managers to steer the company.

2. Department of Agricultural Leadership, Education and Communications (n.d.), Net Promoter Score, available at: http://agrilife.org/od/evaluation/results-2/net-promoter22 Additional resources score/ ÎÎ http://www.callcentrehelper.com/top-tips-forimproving-netpromoter-scores-nps-42754.htm

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TEMPLATE DESCRIPTION: PAGE 2 Scorecard Outlook 24 Perspective Strategic Objective

Customer Increase customer advocacy

Key Performance Indicator

SmartKPIs.com Standard Previous reference reporting period number frequency results

Current results

Trend

Target

%Target complete

Results

% Net promoter score

sK1303

49%



75%

51%



M

51%

Dashboard Outlook 25 KPI Results % Net promoter score

% Net promoter score 74%

M1

72%

69%

72%

M3

51%

69%

M4

M6

76%

76%

M2

M5

74%

49%

51% 49%

M1

M2

M3

M4

M5

M6

In Practice Recommendations 26 Customer satisfaction is no longer the ultimate goal of companies in their relationship with clients. Going beyond the satisfaction level, the % Net promoter score outlines the percentage of clients who would further recommend the company’s products and services. NPS divides customers into 3 categories:  “Promoters” – are considered loyal clients that will keep on buying the company’s products and services and will recommend other people to do the same.  “Passives” – are satisfied clients, but would not further recommend the company’s products and services.

“Passives” can easily be convinced by similar products and services on the market.

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 “Detractors” – are unsatisfied customers, who most certainly would not further recommend the company’s products and services.

The KPI is measured by subtracting the percentage of detractors from the percentage of promoters. A survey consisting in one question - “How likely is it that you would recommend us to a friend?” – is used to capture the data. One of the challenges in measuring this KPI is to distinguish between the customer’s satisfaction with one service, like Customer Care and his loyalty to the company, or brand. This is why companies additionally use bottomup and top-down surveys, for further inquiries that help generate a more precise diagnostic.

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APPENDIX E: SUBSCRIPTION OPTIONS Explore the world of KPIs Whether you want to implement a performance measurement system or you need to improve your current framework, you can choose the best subscription plan to help you inform your KPI Selection.

Get access to smartkpis.com - The largest database of properly documented KPIs BENEFITS `` Find relevant KPI examples for your context `` Obtain high quality KPI documentation `` Use the KPI documentation form example to design your own template `` Export documented KPI examples and instantly create your own library `` Receive assistance from experts on matters related to performance measurement

SELECT THE RIGHT PLAN FOR YOU!

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$0/year

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$249/year

100 KPI names displayed

200 KPI names viewed

300 KPIs names and definitions viewed

500 documented KPIs viewed

Basic access to KPI Dashboard

Basic documentation level access

Detailed documentation level access

Premium documentation level access

200 KPI names

300 documented KPIs - 13 fields

500 fully documented KPIs - 24 fields

Access to the Top 10 and Top 20 KPIs Report series

Access to the Top 10 and Top 20 KPIs Report series

100 KPI names Access to the Top 10 KPIs

Access to the Top 10 KPIs Report series

1 Top 25 KPIs Report at your choice

Top 20 KPIs - 2016 Edition

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