The KPI Framework

Vision

Strategic Plan

Mission

Critical Success factors

Operational Plan

CSF 1

KPI 1Performance Indicator 1Performance Indicator 2Performance Indicator 3

CSF 2

KPI 2Performance Indicator 1Performance Indicator 2Performance Indicator 3Performance Indicator 4

CSF 3

KPI 3Performance Indicator 1Performance Indicator 2

Measuring performanceBusinesses - a profit and a return on investment for

shareholders

government agency - quality of service and return on the tax dollar.

How can we measure it?Critical success factors (CSFs) identify those aspects of

the organisation that are critical for its success.

Key performance indicators (KPIs) are those indicators of performance that are seen as being of great importance to the success of the business of the organisation.

Performance indicators (PIs) are measures of different parts of the organisation's performance.

Plans ShouldIndicate what the critical business issues are for that

planning cycle;

List the critical success factors for achieving the plansCritical success factors:Identify those aspects of the organisation that are critical

for its success;few in number; andAssist the organisation in achieving its plan for the cycle.

Examples – CSF’sService/sales (levels of customer service and sales made to customers);

Human resources (necessary to hire the right people and retain them);

Business culture (change the existing culture to one more focused on service delivery);

Risk/financial management (managing the budgets will have high priority);

Communication (both internal and external communications need to improve dramatically);

Systems and technology (systems and technology need to be improved to compete in the marketplace and to make staff more productive);

infrastructure (How should the organisation be structured? What new assets should be purchased to meet the requirements of the strategic plan?).

View your family as a business and look at its focus for the next year. List four CSFs that would help your family achieve its goals in the next year.

Using your current or a previous business environment, list four CSFs for that organisation.

Key Performance IndicatorsThose indicators of performance that are seen as being of

great importance to the success of the business of the organisation

.. Number of staff developed

.. Number of accidents• Employee costs per staff member.. Premises occupancy costs.. Public perception.. Product mix.. Customer mix.. Vacancy fill rate.. Cash flow.. % income by source.. Customer complaints.. Total transactions by type.. Authority delegation levels.. Channels of communication.. Competitor advertising.. Compliance testing.. Responsiveness to change.. Number of new policies introduced

.. Sales growth

.. Profit margin

.. Education levels of new hires

.. Advertising return on investment

.. Number of complaints (EED, JR, Grievances).. Average processing time.. Average sales costs.. Overdue balances.. Employee satisfaction level• Error rates• Changes in customer demographics• Staff turnover by reason• System failure rate• Overlap of functions• Legislation awareness• System architecture adequacy• Systems utilisation rate• Savings from new technology

Examples – Performance Indicators

1. Identify the KPls for your organisation for the current planning cycle.

2. Identify the performance indicators (PIs) for your immediate work area for the current planning cycle.

3. How do the KPls for your organisation and your immediate work area tie in with your own performance objectives for the current planning period? (If you do not have any performance objectives, think about your own plans and ambitions.)