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Welcome to the Business KPI Community

 Business KPIs

Business KPIs (Key Performance Indicators) enable a company to measure and monitor its performance on a strategic and operational level. The KPIs are also known as the "lead indicators" as they help indicate the happenings in advance. Based on the strategic goals of a company, target values for KPIs are set. Comparing actual KPI values to these targets identifies shortcomings immediately and shows improvement potentials for business processes at the same time. This is vital for every company.

 

Common KPI Language

In today's business world benchmarking has become increasingly important. That means that virtually every company wants to compare its performance to the market leaders. As a result you need a common KPI language.

However, when discussing the benchmarking of business KPIs it is very often the same story. You want to compare your company's performance to your peers, but you just don't know whether your peers are using the same KPIs and the same definitions.
Very often the definitions of the KPIs vary, sometimes the KPIs are even named differently but the definitions are the same. In short, you simply don't know if you are comparing apples to apples or apples to oranges.  

Therefore we launched the "Business KPI Wiki" project to create a unique and consistent set of KPIs that are used and accepted by the market and commonly understood. The goal is to establish a common KPI language spanning all areas of an enterprise.

Your Participation

This community based approach is a unique opportunity to influence the emergence of a business KPI standard. The KPIs will eventually be delivered as preconfigured content of our software in the future, hence, everyone can influence the development.
Please feel free to review the KPI definitions and provide us with your valuable input. 

Project Details

KPI perspectives

According to the balanced scorecard the KPIs are divided into the following four perspectives:

Financial
Customer
Process
HR and Innovation

KPI Blog

For more information on KPIs and the KPI Wiki project have a look at the KPI Blog.

KPI Video

Watch our KPI Video at YouTube. 


 

Recently Updated

  
  1. Perfect Order is a SCOR metric  with some directions how to set up a measurement / formular, but not very detailed, therefor this comment tries to describe an idea how to measure perfect order in real business life (source: Edward Frazelle, Georgia Logistics Institute) for the area "Customer" and KPI: Perfect Order.

    Perfect Order Characteristics:

    has the right amount of products; is damage free; arrives on-time; arrives at the right location; is filled completly on the first call; in entered correctly; is communicated via a custoemr-specific medium (e.g. EDI, fax, phone, internet etc); has no invoicing or collection errors

    Perfect Order Calculation:

    Order Fill-Rate * Order Shipping Accuracy * Damage free order percentage *On-Time Order Percentage * claim free Order Percentage * Order Entry Accuracy * Order Comm Accuracy * Order Doc Accuracy

    Example Perfect Order Calculation:

    has the right amount of products; 97%
    is damage free; 98%
    arrives on-time; 93%
    arrives at the right location; 96%
    is filled completly on the first call; 72%
    in entered correctly; 94%
    is communicated via a custoemr-specific medium (e.g. EDI, fax, phone, internet etc); 89%
    has no invoicing or collection errors; 93%
    ===============================
                                               48%

    Perfect Order Data Elements:
    # of orders - ERP (SD)
    # of orders where products were availble w/in lead-time - Available-to-promise (SCM)
    # of orders that were picked w/ right parts and quantities - WM
    # of orders delivered with damaged products - WM
    # of on-time delivered to customer requested ship-date orders - TM, EM
    # of orders with claims - CRM; financial SCM
    # of orders that were captured with incorrect attributes (e.g. part #, qty, request date, delivery address) - CRM / ERP (SD)
    # of orders with messages that were commnuicated in the method the customer requested - ERP
    # of orders that were delivered with the requested documentation - WM, TM

  2. While working with the SCOR and AMR metric model I got the impression that some important metrics are not on your list - e.g.
    Order Fulfillment Cycle Time; Source Cycle Time; Make Source Cycle Time; Deliver Cycle Time
    Inventory total - in pieces; Inventory Raw Material - in pieces; Inventory WIP - in pieces; Inventory FG - in pieces
    Perfect Order Fulfillment for Purchase Order - on header and on item level
    Perfect Order Fulfillment for Sales Order - on item level

    As we start to validate the metrics with customers I will updaet the list in the future.

  3. Guest

    Hi Christine,

    thanks for your valuable input. I agree that our current KPI list is not complete yet. Therefore you are absolutely welcome to propose additional KPIs. To keep better track of the individual KPIs I suggest to create a new page for every ney KPI (button "add page"). I have already done this for the KPI "Perfect Order":

    https://wiki.sdn.sap.com/wiki/display/BPX/Perfect+Order

    It would be perfect if you could add the KPI details there... 

    Regards,
    Nadim

  4. Nadim, Florian,

    I would like to add a section for COmmunity KPI's... The question is: would you add those to Business, Financial, HR or to a new section ?

     Great to see this initiative.

     Marco

  5. Guest

    Hi Marco,

    nice to hear that you like our initiative. Thanks for your comment. I think we should not create a new section on the level of Financial, Customer, Processes etc. I think generally speaking the community KPIs fall into the section Processes. Therefore I think you should include them in the process section. If you want you can create a special sub-group there for these KPIs.

    Regards,
    Nadim

  6. Guest

    First of all, this KPI Wiki is great and I hope everybody is contributing even more KPIs.

     Here are my questions/recommendations:

     1. Are there any plans to populate,link these KPIs with real example performance data from our customers, linked to industry and solution they use? Similar like the VLM (Value Life Cycle Management) Tool from Value Engineering? If so, it would make this tool even more powerfull.

     2. Is there any possibility to integrate external (Internet) information into this Wiki, since I came along other KPI Wikis in the Internet.

     Cheers Christian.

  7. Guest

    Hi Christian,

    I am glad that you like the wiki (smile) Thanks for your recommendations and ideas. Here are my thoughts on this:

    1. Our initial goal is to come up with a common KPI language. Therefore this is really the first step we want to make. We need some time to get the KPI definitions settled. Once we have established this common KPI language we would eventually like to implement these KPIs into our software solutions. Of course it would be great to link to customer values, however, I don't know how much sense it makes at present since we are still in the process of defining the KPIs. Nevertheless some KPI definitions are already quite mature, so if you think it makes sense to link to real customer values, please feel free to do so.

    In the long run the common KPI language will allow for real benchmarking based standardized KPIs.

    2. It would be great to combine the existing information into on central repository. Therefore I really encourage you to look for other related sources (as far as I understood you know already some, some are known to us as well). In case you find a good KPI definition I suggest to link from the respective KPI page inside this wiki to the external web-site (and vice versa if you like).

    Any additional ideas are also welcome. Have you already had the chance to take a look at the related blogs? On the one hand there is my own blog, on the other hand there is also a number of external blogs that relate to our project. They are linked on the KPI Home page

    Regards,

    Nadim 

  8. Direction of Improvement

    As explained in the Business KPI Community Home Page, a new KPI page has to be created based on the KPI Definition Template.

    When inserting the variables, you need to choose a value for the field Direction of Improvement. Three values are available: maximaze, minimize, range.

    What this variable is intended for, and what is the meaning of these values?

    Cheers, Davide

  9. Guest

    Hi Davide,

    the meaning of this variable is as follows:

    Direction of Improvement: Describes in which direction the KPI values get better. Three values are possible here:
    Maximize: it is generally desirable to maximize the value of this KPI (typical examples: profit, customer satisfaction, etc.).
    Minimize: it is generally desirable to minimize the value of this KPI (typical examples: all sorts of cost related KPIs, lead times, etc.).
    Range: For some KPIs it is not clear minimizing or maximizing is optimal. They should be kept in a certain range.  

    Here is the related link:https://www.sdn.sap.com/irj/sdn/wiki?path=/display/BPX/Business+KPIs&focusedCommentId=59859 

    Does this answer your question?

    Regards,

    Nadim

  10. Guest

    sorry, I got the link wrong. Here is the correct one:

    https://wiki.sdn.sap.com/wiki/display/BPX/Information+about+KPIs

  11. Yes Nadim, this thoroughly answers my questions, thank you very much indeed! I'm sorry but I'd missed page you've quoted.

    Cheers, Davide

  12. Guest

    Hi,

     just wanted to congratulate you for this initiative. I find it really useful and I think it is going to make a difference.

    Rafael

  13. Guest

    This is very useful information on KPI's and I am more clear then  earlier.  Thank you.

    Shankar