No such thing as a poor KPI, just poor data and poor deployment.

Key Performance Indicators (KPIs) are the crucial barometers of business measurement & improvement. KPIs help us learn, they provide actionable empowerment, they enable informed decision-making, which helps us to improve organisational performance.

However, KPIs are only as useful as the data they are based on. If the data is not accurate or relevant, the KPIs will not be reliable indicators of performance. Therefore, it’s important to ensure that the data used to calculate KPIs is of high quality and relevant to the organisation’s goals.

There are several ways to improve the quality of data used for KPIs:

• Use multiple sources: By gathering data from multiple sources, you can verify the accuracy of the data and reduce the risk of bias.
• Clean and validate the data: Make sure that the data is free of errors and inconsistencies, and that it’s relevant to the KPI being measured.
• Regularly update the data: To ensure that the KPIs reflect current performance, it’s important to regularly update or ensure the integrity of the data.
• Use appropriate data collection methods: Choose data collection methods that are appropriate for the KPI being measured. For example, if you’re measuring customer satisfaction, it may be more appropriate to use a survey rather than sales data.
• Get ready to adjust or re-baseline: Make sure the KPI is, and stays relevant to the goal you are trying to achieve: It’s important to select KPIs that are directly related, as they will help you measure progress and identify areas of improvement.
• Deploy balancing indicators: For example, lagging indicators measure past performance, while leading indicators predict future performance. It’s important to use a mix of both types of indicators to get a complete picture of your organisation or your suppliers performance.
• Set achievable targets: Setting achievable targets for your KPIs will help you measure realistically achievable progress and identify areas of improvement.
• Benchmark. What does good look like: It’s sometimes also helpful to benchmark your performance or findings against industry standards or competitors to see how things compare.
• Regularly review and adjust your KPIs: It’s important to regularly review your KPIs to ensure they are still relevant and effective in helping you achieve your goals. If necessary, adjust your KPIs to better align with your current business objectives.
• Socialise and collaborate: Communicate your KPIs to all stakeholders: Make sure all relevant stakeholders are aware of your KPIs and how they are being tracked. This will help everyone understand the goals and objectives of the organisation and work towards achieving them.

It’s important for an organisation to have adequate operational structures and processes in place in order to create a reliable foundation for the dataset, whether the data itself be good bad or indifferent. These operational structures and processes refer to the systems and procedures that an organisation uses to carry out its day-to-day operations, such as processes for collecting and storing data, managing resources, and communicating with stakeholders etc.

By following these best practices, you can ensure that the data used to calculate your KPIs is reliable and representative of your organisation’s as well as your suppliers’ performance.

Unlocking hidden relationship-based value

It’s also important to note that business relationships themselves, much like our personal relationships thrive on boundaries and structure – otherwise they become dysfunctional. Similarly, KPIs deployed in an unstructured environment are also likely to be ineffective. And whilst typically this is the area of any engagement that tends to lack the sophistication of baselined measurability, it also happens to be the area that holds the most value.

Effective KPIs really can mean the difference between business success and failure. The good news, is that Suppeco is already doing the heavy lifting here; creating baseline and structure within the relationship space through its 4 Pillars dynamic infrastructure, specifically geared towards effective KPI deployment, service measurement and improvement.

Innovation and collaboration, these critical areas, and many others quite literally depend on one thing – a great relationship. The key to any great relationship is meaningful collaborative structure and reciprocity. This is where 4 Pillars dynamic infrastructure simply excels.

Want to find out more?

Arrange a tour of Suppeco and our best in class KPI creation suite.