Key performance indicators (KPI) are high-level snapshots of a business or organization based on specific predefined measures. KPIs typically consist of any combination of reports, spreadsheets, or charts. They may include global or regional sales figures and trends over time, personnel stats and trends, real-time supply chain information, or anything else that is deemed critical to a corporation's
The key indicators are agreed upon by an organization and are indicators which can be measured that will reflect success factors. The KPIs selected must reflect the organization's goals, they must be key to its success, and they must be measurable. Key performance indicators usually are longterm
considerations for an organization.
For KPI’s to be most effective, follow these suggestions:
- KPI must be actionable
- Measure against a goal or best practice
- Monitor frequently so that issues can be identified and corrected quickly
- Assign to an owner.
During times of economic uncertainty, it is a competitive necessity to ensure market effectiveness and business efficiency. This requires the continuous improvement of operational performance across all key business processes and value streams. Before improvements can be made, all decision makers need a comprehensive understanding of current performance as well as the leverage points that can be used to positively impact future performance.
By definition, KPI metrics measure aspects of the business process or value stream that directly affect results or outcomes. If KPIs are actionable and monitored in a timely‐enough manner, they can be used to make operational decisions and drive actions that can positively impact business outcomes in the current reporting period.
|Spend Visibility Metrics||Ariba Spend Visibility|
is your first step toward
identifying and eliminating
maverick spending, fraud,
and other noncompliance
factors. Complete, accurate,
and continually up-to-date
spend records help you launch and maintain compliance initiatives with both internal and external parties. Dashboards and reports keep all stakeholders informed about contracts and progress toward
strengthening the bottom line.
|Sourcing Metrics||With Ariba Sourcing, you can make smarter sourcing decisions and drive better results. Manage supply volatility and capacity constraints. Minimize supply risk with better supplier visibility. And build your sourcing pipeline with tools that achieve early ROI|
and long-term cost savings. Ariba Sourcing is embedded with best practices to give your team an edge. Intuitive wizards
guide users through project creation. Built-in tools and intelligence facilitate collaboration and negotiation. Advanced workflow and approval routing streamline project management and compliance initiatives.
|User Related||User Related|
|Spend Related||Project Related|
|Data Processing Related||Spend Related|
|Output Related||Process Related|
Once you have good Key Performance Indicators defined, ones that reflect your organization's goals, one that you can measure, what do you do with them?
You use Key Performance Indicators as a performance management tool, but also as a carrot. KPIs give everyone in the organization a clear picture of what is important, of what they need to make happen. You use that to manage performance. You make sure that everything the people in your organization do is focused on meeting or exceeding those Key Performance Indicators. You also use the KPIs as a carrot. Post the KPIs everywhere: in the lunch room, on the walls of every conference room, on the company intranet, even on the company web site for some of them. Show what the target for each KPI is and show the progress toward that target for each of them. People will be motivated to reach those KPI targets.
|P2P Metrics||Ariba P2P is the only SaaS solution that offers world-wide visibility and complete control to manage both direct and indirect spend, for all goods and services. Optimizing services procurement is one of the quickest ways you can deliver more savings to the bottom line. Along with goods, Ariba customers save on services like contingent labor, consulting, print, creative, legal, direct mail, ATM installations, and more. From source to settle, you can manage it all with an automated and integrated user-friendly system.||Contract Management Metrics||It's the paper that blocks your view. It can be created in countless ways and filed in a myriad of places. But when you make the move to electronic contracts, every contract is housed in a centralized repository and retrieved on demand with powerful search tools. Integrated collaboration, negotiation, and execution tools keep you posted as the agreement takes shape and becomes finalized. And with expiration dates and other milestone events easily flagged, you'll stay alert to renewals and avoid supply chain interruptions.|
|Process Efficiency Related||User Related|
|Process Effectiveness Related||Spend Related|
This has been another Knowledge Nugget post brought to you by Beverly Dunn.
For more information or details please feel free to contact me!