An enhancement to key performance indicators balanced scorecard reporting is provided through the Integrated Enterprise Excellence (IEE) business management system. Key Performance Indicators (KPIs) with organizational balance is enhanced for KPIs through an enhanced business management system’s value chain.
Key Performance Indicators Balanced Scorecard: KPI Selection
A key performance indicator (KPI) is a type of performance measurement that is commonly used for organizational evaluation of activity success. Success could be defined in terms of making strategic-goal progress but could be the repeated achievement of some level of operational goal.
Choosing the right KPIs is reliant upon having a good understanding of what has organizational importance. What is important often is dependent upon the department that is measuring their performance (e.g., finance KPIs can be quite different than manufacturing KPIs).
For KPI development, it is important to develop a good understanding of what has is important. KPI selection is often closely associated with assessment of the present business state and its key activities, where this effort can lead to the identification of potential improvements.
Key Performance Indicators Balanced Scorecard: An Enhanced Approach for KPI Selection and Tracking
For a given organization, would it be reasonable to expect that there could be a difference of opinion
- Relative to which KPIs are selected?
- How KPI goals are set?
After setting KPI goals:
- How is it known that achievement of the goal will help the business as a whole?
- Whether an apparent improved KPI shift will in the future maintain its current improved level of performance?
These are very important issues that need to be structurally addressed to ensure that decisions and goals are set so that the enterprise as a whole benefits the most. These types of decisions need to be based on the results of structured data analytics; however, this often does not occur.
An approach to address these issues is the Integrated Enterprise Excellence (IEE) business management system. In IEE:
- The business as a whole is assessed when selecting performance measures for functions (KPIs).
- Measures for IEE value-chain functions are determined by asking what good metrics are relative to quality, cost, and time.
- Performance measures are reported using a predictive scorecard system.
- The enterprise value chain as a whole is assessed to determine which performance measures improvement needs would benefit the overall big-picture financials the most.
- These metric improvements needs create a pull for improvement projects by the process owners who own the performance metric.
- Evidence and quantification of the amount of improvement that was made is evidenced by the process’ 30,000-foot-level predictive scorecard transitioning to an enhanced level of performance.
An IEE business management system addresses the traditional KPI and balanced scorecard reporting issues described in a 1-minute video:
Additional Information on Enhanced Methodology for Key Performance Indicators Balanced Scorecard
For additional information about using Integrated Enterprise Excellence (IEE) for an enhanced methodology for key performance indicators with organizational balance, see:
- Enhanced methodology for key performance indicators with organizational balance using IEE: Articles, Videos, Books
- Addressing and resolving executive challenges through enhanced methodology for key performance indicators with organizational balance
- Transitioning historical data scorecards to predictive reports (10 illustrations)
- Enhanced methodology for key performance indicators with organizational balance through IEE system
- Integrating enhanced methodology for key performance indicators with organizational balance