In my previous posts I made a case for custom KPIs so let me also state that Industry KPIs shouldn’t be completely ignored. Let me illustrate through a story from my past.
Creating your own KPIs and performance indicators also means being careful in considering the types of behaviour you are going to create with the indicator. As the saying goes, you achieve what you measure. The act of measuring something means that we are placing focus on it and as a result we are pulled towards achieving it. It can be easy to put in a performance indicator thinking it will lead you to what you are trying to achieve but it might have a different effect.
In order to create custom Key Performance Indicators (KPI) and their supporting indicators you have to plan on where you want to take your organization. You need to look at where you have been, what your strategic objectives are and how you measure success of those objectives. AND you have to have a clear understanding of the milestones that you must achieve on the way to those successes.
Should you be using industry standard KPIs to measure your organization’s performance or should you be creating custom KPIs in your Business Intelligence solution?
I was recently speaking with a prospect and was asked the question, “why would a company want or need BI?” In my response I indicated several reasons including the fact that companies looking to improve efficiency would benefit from BI. To this I got a somewhat confused look and the question, “How is a Business Intelligence solution going to make the operation more efficient?”