Monday, January 12, 2009

Keep Your KPIs Fresh

image One thing that has caught my attention over the past couple of months is the emphasis on new financial metrics in this depressed market. Employment statistics used to be mentioned in passing, and now we breathlessly await the monthly numbers. Clearly the global recession is an entirely new environment, and investors would be wise to not rely on old metrics and approaches to guide them.

This made me think of how a core component of a good performance management system is keeping your metrics relevant to the current business environment they are attempting to measure. There is no such thing as permanent performance indicators. If your metrics don't change, then there is something wrong with your process. It is critical to keep your performance metrics focused on the current objectives and strategies of your business.

If your company is spending money differently, as all companies are doing in some way, then your performance indicators must change to reflect this. In these types of rapid change it is entirely possible that your core business strategy can shift significantly. It is essential that the keepers of corporate performance make it a continuous cycle to review and evaluate the suite of KPIs to ensure they are aligned to today's business reality.

This also speaks to the need for the IT organization to be able to rapidly respond to these changes in direction to provide the necessary data for the new KPIs. The best BI infrastructures are highly adaptable and responsive to change.

Step back and take a look at your metrics. Are they still relevant?

1 comment:

Shahid. said...

You have very nicely elaborated the concept that 'BI is a contineouse process' and not a product. Business people need to realize that as their business moves ahead its KPIs also needs tobe so...


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