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3. Key Performance Indicators
3.1 What is a KPI?
Key Performance Indicators (KPIs) are agreed to quantifiable measurements that reflect the performance of a group or service in achieving the goals or critical success factors of an organization. All defined KPIs must reflect the organization's goals, they must be key to its success, and they must be quantifiable (measurable). KPIs usually enable the organization to meet the long-term goals, although KPIs may change as the organization's goals change, or as it gets closer to achieving a goal. KPIs need to be reviewed and maintained to insure that they are actually achieving the objectives.
The first step in defining KPIs is to understand the current state of business (services, methods, processes, technology, risk, people etc) to establish a baseline for key measurements. We must understand why the quality of a service is important to Canadians or our organization. Further we must understand what specifically we mean by service improvement. Is service improvement faster service? Is it closing a call or inquiry in one session? How do we close a call and how do we know that we have successfully met the citizen's needs?
KPIs are complex and need to evaluated in light of the objectives that are particular to each program or service grouping.
3.2 Reflecting the Organizations Goals
KPIs will depend on the organization – and will typically be developed at two levels: Organizational and Departmental. For example, the Federal Government has a KPI to Increase Customer Satisfaction however; a Department (or Service Provider) will typically have a more specific KPI that is in line with overall organizational KPIs such as responding faster to customer inquiries. The first step to KPIs is developing and defining the organization improvement goals with an understanding of where we are today. These goals must then be clearly communicated in a meaningful way.
3.3 Quantifiable Measures
If a KPI is going to be of any value, there must be a way to accurately define and measure it. "Improve Customer Satisfaction" is useless as a KPI without some way to measure if the customer is satisfied. We must also be able to define what satisfaction is and establish what a successful level of satisfaction is and set milestones to achieve the final goal.
It is also important to define KPIs and stay with the same definition from year to year so we have a gauge to know that we are improving – it may happen that KPIs will change, however this should be avoided as much as possible. For a KPI of "Improve Customer Satisfaction", one needs to address considerations like whether to measure by each contact or a percentage of contacts. Targets must also be set for each KPI. For a KPI of "Improve Customer Satisfaction" we must identify what our target is – such, as "80% of customers surveyed will be satisfied" and as well, define how we will determine if our target, such as "send customer satisfaction surveys to 10% of all customers interacted with". After the KPI has been defined it will result in a clear target that everyone will understand and be able to take specific action to accomplish.
