TOP 20 KPIS 2016 EXTENDED EDITION
% Brand awareness $ Customer acquisition cost % On-time delivery # Inventory to sales ratio (ISR) % Slow moving stock % All commodity volume (AVC) distribution # Earned man-hours % Cannibalization rate of new product offering % Employee utilization rate $ Telecom subscriber acquisition cost # Units per man hour % Employee turnover % Customer retention % Net promoter score # Time to fill a vacant position % Realization rate # Employee engagement index % Production schedule attainment % Call setup success rate (CSSR) % Hospital bed occupancy rate
Publication date: March 2016 ID number: sK0168001
TOP 20 KPIS 2016 EXTENDED EDITION
% Brand awareness $ Customer acquisition cost % On-time delivery # Inventory to sales ratio (ISR) % Slow moving stock % All commodity volume (AVC) distribution # Earned man-hours % Cannibalization rate of new product offering % Employee utilization rate $ Telecom subscriber acquisition cost # Units per man hour % Employee turnover % Customer retention % Net promoter score # Time to fill a vacant position % Realization rate # Employee engagement index % Production schedule attainment % Call setup success rate (CSSR) % Hospital bed occupancy rate
Publication date: March 2016 ID number: sK0168001
INDEMNITY STATEMENT © 2016 The KPI Institute Ltd. All Rights Reserved. ID number: sK0168001 ISBN-13: 978-1530815319 ISBN-10: 1530815312 This report is the result of primary research conducted by the KPI Institute. It is available in PDF format on the smartKPIs. com website. Terms of use available at: http://www.smartkpis.com/terms-of-use.html (‘Premium content terms’). An appropriate citation for this report is: The KPI Institute (2016), Top 20 KPIs – 2016 Extended Edition, Melbourne, Australia Indemnity statement The KPI Institute has taken due care in preparing the analysis contained in this report. However, noting that some of the data used for the analysis has been provided by third parties, The KPI Institute gives no warranty to the accuracy, reliability, fitness for purpose, or otherwise of the information. The KPI Institute shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice. For the latest version of the documentation, smartKPIs Premium should be consulted. Editorial Coordination: Aurel Brudan Editorial Team: Cristina Tărâță, Marcela Presecan Research Team: Cătălin Stoia, Tudor Modruz Published by: The KPI Institute Life.lab Building 198 Harbour Esplanade, Suite 606 Melbourne Docklands, VIC 3008, Australia Telephone (international): +61 3 9028 2223 E-mail:
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www.kpiinstitute.org
FOREWORD There is a rumor going around about a Fourth Industrial Revolution. A historical synopsis of what has been, shows us that we have successfully transcended the mechanical use of equipment, mass production, electronics, IT and automation to finally enter our next stage of evolution: self-adaptive systems and cyber-physicality. Everything human related has come to a transformation, and that cannot be exclusive of the performance management discipline. The fact of the matter is, that it is becoming of performance management practices today, to have a visionary effect on all that concerns the lucrative corporations of tomorrow. As of recent years, performance management disciples have rendered practices of monitoring past performance obsolete, they have praised the emergence of leading KPIs to push forward all that’s lagging in the performance of our companies, they have condemned organizations for searching performance in financials only, and they have preached the use of performance management tools that oozed Business Intelligence. Perhaps, the time had come for them to fully take on the role of performance management enthusiasts and fully commit to their progressive ways. And so they did. People are talking about seismic changes in the corporate world. They speak of matters never heard before. They speak of the downfall of corporate ladders, they speak of the fragmentation of skill, they speak of connectivity and specialization that dominates the world. They talk Top 20 KPIs - 2016 Edition
of performance no longer driven by competition, but by relentless new talent building on innovation and faced -paced learning. In this new world of unchartered communication possibilities and unimaginable velocity, there will be a paramount need to fill in the current gaps in management, HR, strategy and performance capabilities. The bind between performance and compensation is unfastened, while companies like Adobe, GAP and General Electric have already relinquished annual performance reviews from their repertoire. The performance management of tomorrow will live to see a world where success gets to be built on talent, on human resources strategies that revolve around cultivating and harvesting employee strengths. There will be a need for sophisticated tools that perform real-time, pulse-snatching monitoring, measurement and assessment. Metrics and data will have to be more precise and accurate than ever. Measurement will provide HR with the data to perform people analytics, it will take the heartbeat of all operational systems and processes, it will even intrude on our personal living habits to report on our health for future performances in the office. Hardly believable, but true. Empowered by technology, measurement will sprout out data faster and more efficiently than ever. Because measurement will stand at the bottom of all things and data will be the addiction of the new world.
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TABLE OF CONTENTS Section I
6
How to Use This Report
6
Report Structure
7
Report Highlights
8
Section II
10
About The KPI Institute
10
smartKPIs.com Community Profile
12
2016 smartKPIs.com Functional Areas Taxonomy
14
2016 smartKPIs.com Industries Taxonomy
15
Section III
16
KPI…Naturally
16
About Key Performance Indicators (KPIs)
18
Advice on KPI Selection
20
KPI Documentation Guidelines
22
Target Setting: From Theory to Practice
24
Data Gathering Dimensions
26
Enhancing Performance Data Through Visualization
28
Data Analysis
30
KPI Reporting
32
Section IV
34
Top 20 Countdown Analysis
34
KPI Documentation Form Template
38
% Hospital bed occupancy rate
42
% Production schedule attainment
44
% Call setup success rate (CSSR)
46
# Employee engagement index
48
% Realization rate
50
# Time to fill a vacant position
52
% Employee turnover
54
% Net promoter score
56
% Customer retention
58
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www.kpiinstitute.org
# Units per man-hour
60
% Brand awareness
62
$ Customer acquisition cost
64
% On-time delivery
66
# Inventory to sales ratio (ISR)
68
% Slow moving stock
70
% All commodity volume (ACV) distribution
72
# Earned man-hours
74
% Product cannibalization rate
76
% Employee utilization rate
78
$ Telecom subscriber acquisition cost
80
Section V
82
Appendix A: Related Reports
82
Appendix B: The KPI Dictionary
84
Appendix C: Toolkits
86
Appendix D: Performance Magazine
87
Appendix E: Memberships
88
Appendix F: Subscriptions
89
Appendix G: Training Courses
90
Appendix H: Advisory Services
92
Appendix I: Software
94
Appendix J: Glossary of Terms
96
Top 20 KPIs - 2016 Edition
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SEC I
HOW TO USE THIS REPORT
Purpose of the report The Top 20 KPIs Report – 2016 Edition is aimed at sharing the KPI Institute’s valuable knowledge regarding the use of KPIs in measuring performance. The purpose of the report is to introduce readers to the most popular KPIs all around. Moreover, the goal of this report is to provide readers with a practical step-by-step guide to enhancing performance by simple recognition of the added clarity, focus and improvement KPIs bring to any performance measurement process. As much as it is a valuable resource for harvesting Key Performance Indicators, the Top 20 KPIs Report – 2016 Edition is not designated to supply readers with the ultimate solution to establishing the right KPIs for their organizations. The Top 20 KPIs Report is merely a collection of the most popular 20 KPIs all around. Conveyed from smartKPIs.com, the Top 20 KPIs selected for the report, are a collection of the most viewed KPIs in all functional areas or industries considered, based on site statistics and online community readings.
Readership profile The Top 20 KPIs report – 2016 Edition is intended KPI 7
Industries Sub-categories Tags
Any Any portfolio, customers
Description
Calculation
Definition
Subordinate metrics
A = # Promoters B = # Detractors C = # Customers
Calculation formula
(A/C)*100-(B/C)*100
Trend is good when
Increasing
Measures the net difference between promoters and detractors, of all customers that express an attitude. Note: Net Promoter, Net Promoter Score and NPS are registered trademarks of Fred Reichheld, Bain & Company and Satmetrix.
Variations
% Promoter score % NPS
Related KPIs
% Customer satisfaction with new products and services
Focus Purpose
To monitor the level of customer satisfaction by evaluating the extent at which customers act as brand ambassadors.
BSC perspective
Data Profile Data capture period
Spot
Standard reporting frequency
Monthly
Data collection method
Customer satisfaction surveys
Limitations
Being based on customer surveys, results can be altered by the respondents’ subjectivity or incentives given by the company to stimulate responses.
Customer
Objective measured Increase customer advocacy
Targets
The novelty in the KPI Documentation Form template for the Top 20 KPI reports – 2016 Edition, is its unprecedented design. The first page contains updated fields of the KPI Documentation form as researched and analyzed by The KPI Institute. The second page of the KPI Documentation form includes valuable guidance on KPI Reporting, based on actual exemplification of KPI results and pertinent illustrations of Scorecard and Dashboard designs for each of the KPIs included in the report. Not only that, but the newly developed KPI Documentation Form, invaluably shares “In practice” recommendations for best KPI use, analysis and interpretation, while ultimately distinguishing itself from all other performance measurement resources on the market.
References 1. Bain & Company (2012), Creating a reliable metric, available at: http://www.bain.com/publications/articles/creating-a-reliablemetric-loyalty-insights.aspx 2. Department of Agricultural Leadership, Education and Communications (n.d.), Net Promoter Score, available at: http://agrilife. org/od/evaluation/results-2/net-promoter-score/ 3. Qualtrics Labs (2012), Net Promoter Score (NPS) explained, available at: https://www.qualtrics.com/net-promoter-score-npsexplained
Scorecard Outlook Perspective Strategic Objective
Customer Increase customer advocacy
Key Performance Indicator
SmartKPIs.com Standard Previous reference reporting period number frequency results
Current results
% Net promoter score
sK1303
49%
Target setting notes
Red: 60
Yellow: 40-60
Green: 3,000
Yellow: 1,5003,000
Green: 30%
Yellow: 10-30% Green: 50%
Yellow: 20-50% Green: 150
Yellow: 100-150 Green:
