Defining Your Key Performance Indicators
Your key performance indicators follow the goals of your organization. Because KPIs are very popular for managing business objectives, they can definitely be overused so that you see a myriad of green, yellow, and red lights on every site you traverse. The planning process will help you identify the appropriate indicators for your goals and define an action for each of those indicators. Finally, you can determine where and how these indicators will appear on your sites.
Defining indicators
Each indicator that you define for your portal should reflect the scope and goals of your organization. If your organization has a detailed planning process that results in yearly and quarterly goals for each department, the exercise of discovering the indicators for your portal should be a cake-walk. If your organization has a five-year business plan where the only goal is to make profit, defining indicators will be a more time-consuming process.
Here’s how we recommend defining the indicators for your organization or division:
Work with business unit managers to discover their yearly and quarterly goals. If you are supporting a centralized organization, you may want to start with the top organizational goals and then work through each of the departments that support those goals. As you discover each goal, document the group that it applies to and the timeframe in which the organization will work to achieve the goal.
Translate each goal into a sentence that describes the formula that will measure success. This description is easier to write for some goals than for others, but it will help you determine whether the goal is appropriate for measurement and, therefore, a good candidate for a KPI. It is important to share these translations with the business managers to make sure that you have described the goal and measurement accurately.
Determine the systems that support measurement of each goal. For each variable in your formula, there should be a source of the data that provides that variable, even if it’s just a notepad.
Identify the audience(s) for each goal. The audience may simply follow the business unit that you worked with to identify the goals, but they also may cut across the organization by role. For example, an administrator in the sales division may want to see the same indicator as an administrator in the customer service division.
Once you have gathered your goals and therefore your potential indicators, narrow down the indicators that you will implement. There are a few rules of thumb that you can use while determining the appropriate goals to map to key indicators:
Do not inundate your users with indicators: If users start seeing every item in their work life as red, yellow, or green, they will start to tune them out. Keep the indicators appropriate for each user set, and generally keep the KPI list to five or less items that they can affect or that affect them.
Make sure the indicators change: If you have an indicator that tracks a 10-point change over five years, you probably don’t need a pretty icon to track its slow progress. The indicators should drive change, and to do so, need to track a measurement that does change. If necessary, divide the goal into smaller time segments or measurement factors so that the indicator reflects something pertinent today.
Keep it simple: If you can’t explain how to measure the success of a goal in a sentence or two, or if any part of the formula involves an actuarial table, it is probably too complicated to drive action. The message behind the indicators should read like exclamations – Sales are down! Our customers hate us! This component of our product sucks! All employees are happy!
Go for quick wins: When initially deploying KPIs on SharePoint, make sure the first few are fairly straightforward to implement and integrate to demonstrate the capability. If any requires a six month development plan to integrate five systems, shelve it until you have validated that indicators are valuable to and appreciated by your organization.
Table 16.1 shows some sample business goals and their associated planning factors:
| Business Goal and Timeframe | How to Measure | Systems Involved | Targeted Audience(s) |
|---|---|---|---|
| Grow profit by 150 percent over last year by meeting quarterly targets | Compare revenue less expenses for each quarter to target | Order processing | Management, sales division |
| Keep expenses at reasonable level | Manage expense to revenue ratio to be 25 percent | Accounting software | Management, HR |
| Improve customer satisfaction by reducing bugs in software (yearly goal) | Compare number of bugs reported for each product against previous quarter | Issues tracking list | Software development |
| Improve customer satisfaction by reducing resolution time on issues | Measure elapsed time between open date and closed date for issues | Issues tracking list | Customer service |
| Deliver projects on time | Measure percentage of tasks that are delivered after the due date | Tasks list | Management |
| Reduce employee attrition by improving employee satisfaction | Measure average employee satisfaction rating provided by training | Employee survey | HR, management |
| Improve customer and employee experience through employee training | Measure attendance of training sessions and rating of training sessions | Attendance worksheet, session feedback survey | HR, customer service |
| Improve process for expense reimbursement | Measure number of expense reports waiting for approval | Expense report library | HR, management, accounting |
| Improve sales reach | Measure expansion of customer list | Customer Relationship Management database | Sales |
| Q3 Sales | Sum of sales from all regions for Q3 | Excel workbook | Sales, management |
Based on this compilation of business rules, a couple of KPI lists look viable—one for customer service and one for management. The details of the HR KPI list are shown in Table 16.2.
| Indicator Name | Indicator Formula | Type of Indicator |
|---|---|---|
| Expense to Revenue Ratio | Amount of expenses divided by amount of revenue | Indicator using data from Analysis Services |
| Expense Reports Awaiting Approval | Percentage of expense reports with status waiting for approval | Indicator using data from a SharePoint list |
| Training Attendance | Count of attendees at latest training session | Indicator using data from Excel |
| Employee Satisfaction | Average of survey responses to question about employee satisfaction | Indicator using data from a SharePoint list |
| Softball Games Wins | Number of games the HR softball team has won | Manual indicator |
After these indicators are implemented, the KPI list looks as shown in Figure 16.1.
The details of the Management KPI list are shown in Table 16.3.
| Indicator Name | Indicator Formula | Type of Indicator |
|---|---|---|
| Operating Profit | Amount of revenue less amount of expenses | Indicator using data from Analysis Services |
| Expense to Revenue Ratio | Amount of expenses divided by amount of revenue | Indicator using data from Analysis Services |
| On-time project delivery | Percentage of active tasks that are not complete and are past due | Indicator using data from a SharePoint list |
| Employee Satisfaction | Average of survey responses to question about employee satisfaction | Indicator using data from a SharePoint list |
| Q3 Actual Sales | Sum of Q3 sales for all regions | Indicator using data from Excel |
After these indicators are implemented, the KPI list looks as shown in Figure 16.2.
Driving users to action
Each KPI that you have defined for your organization should have an associated action so that users can affect the value that is being reported. Actions are easier to define for some indicators than others, and members of your front-line team may more directly affect the indicators whereas management might be charged with motivating others to affect the indicators; but, regardless, it is important to take advantage of the focus of your users.
Each SharePoint indicator allows you to configure the details link for that indicator. This is the link that users are directed to if they click the indicator. Configuring the details link to direct the user to the appropriate action makes it easy for users to affect the indicator. Some suggested actions are shown in Table 16.4.
| Indicator List | Indicator Name | Details Link to: |
|---|---|---|
| HR, Management | Expense to Revenue Ratio | Link to report that shows sales and expenses by division |
| HR | Expense Reports Awaiting Approval | View of expense report library that shows items that are waiting for approval |
| HR | Training Attendance | Excel workbook that shows all the employees that signed up and which ones attended |
| HR | Employee Satisfaction | View of summary of all responses to questions in survey |
| HR | Softball Game Wins | Web site that discusses softball strategy |
| Management | Operating Profit | Child indicators that show revenue and expenses |
| Management | On-time Project Delivery | SharePoint view of active, past-due tasks grouped by owner for project |
| Management | Q3 Actual Sales | Excel workbook where sales numbers are tracked for each region |
Designing KPI Web Parts for your sites
After you have gone through the effort to find the appropriate indicators for your organization, you need to design an effective way to display them. You should display them in a prominent location on your sites, like the top right, and keep the KPI location fairly consistent between sites so that users start to expect them.
SharePoint provides two Web Parts that you can add to your site pages; they display KPIs from anywhere on your site collection. The first is the Key Performance Indicator Web Part that shows values from your indicator list. You can configure the icons that are shown to vary the KPIs throughout your sites. The second is the KPI Details Web Part, which allows you to display all the information for that KPI on site. This Web Part is effective for driving attention to a particular KPI and maybe changing the focus for your site or team on a regular basis.
Note
Both Web Parts can be configured for target audiences so only the members of the audience that you select for the Web Part see the KPI information. This allows you to tune the user experience for KPIs to only the appropriate users.
Showing data using the Key Performance Indicator Web Part
The Key Performance Indicator Web Part displays the KPI list to which it is pointed, and that KPI list can be located anywhere on the site collection. You can then tune the Web Part to optimize the viewing experience for your users.
One of the most noticed configuration options is the ability to change the KPI icons. The following icons are available:
Default: Green circle, yellow triangle, red diamond.
Checkmarks: Green circle with a check mark, yellow circle with an exclamation point, and red circle with an X.
Flat: Green, yellow, and red circles.
Traffic lights: Green, yellow, and red circles encased in a square traffic light box.
Smileys: Yellow circles with happy, neutral, and sad faces. Because the visual cues in the smileys are so subtle, it is difficult to see the difference.
In addition, you can configure the Web Part to show only icons. This is helpful when you do not want to display the values or if the values are not meaningful in and of themselves. You can also configure whether the Web Part will show only problems (indicators that are red and yellow) or show all indicators. Because some of the value of indicators is to encourage and motivate users and to advertise accomplishments, showing only the problems seems like short-circuiting that value, but you can select that option if the full list takes up too much vertical space. To minimize the vertical and horizontal real estate, the Web Part allows you to hide the toolbar or to display the edit toolbar in View mode.
The option to display multiple indicator columns is interesting because it adds another column for the KPI to consider and show status for. You can pick a KPI that has this column, and then select from the available columns to create the additional column that you want to display, as shown in Figure 16.3. However, this column appears at the top of the list and so appears relevant to all of the indicators, even though it’s likely that the same column is not applicable to the other indicators.
Figure 16.3. Configuring the KPI Web Part to display multiple indicator columns
After you have configured the Web Part as appropriate for your organization, it should display your indicators as shown in Figure 16.4. Each indicator is clickable and links to its link detail action, if configured, or to a detail view of the KPI if the link detail is not configured.
Showing data using the KPI Details Web Part
The KPI Details Web Part is used for showing the values and status of just one indicator. You configure this Web Part to point at the appropriate KPI list, and it lets you select the KPI that you want to detail and the icon style that you would like, as shown in Figure 16.5.
Figure 16.5. Configuration options for the KPI Details Web Part
Once configured, the KPI Details Web Part displays an indicator as shown in Figure 16.6. In this view, you can see the importance of a good description and good comments to help users really understand what the KPI is and how it is measured. In addition, this Web Part shows the source of the KPI data and links to that source.
