Friday, March 26, 2010

Am I taking the best decision ?? How can KPI indicators help ?

In a large company, when decisions are badly difficult to take (large amount of constraints, various ideas,), here is a simple solution: The KPI.

KPI stands for Key Performance Indicator and you can refer to lots of books. However, here are the 5 rules of thumbs:
  • First, you cannot choose any indicators; they are based on specific objectives to accomplish
  • Second, it must be driven by important decision to make (otherwise it means that the choice of the indicator is not proper)
  • Third: Always analyze the results
  • Forth: KISS !! Keep It Simple Silly: A good indicator must be simple to create and people can understand it easily. Often, complicated calculation leads to obscure indicators, that you cannot make any decision from.
  • Finally, after carefully having chosen the indicators, you must trust them to determine the best action to undertake.

Here is an example in EXCEL, using the Radar graph :
 * Let us consider 2 solutions to analyse,
 * Below is represented the graph created with EXEL for one of the two solution (each major criteria below would be composed of sub-criteria - not represented)

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