Tuesday, 8 March 2016

Decision Making based on KPIs


The other day, I was brainstorming on quantifying data driven reports and determining performance areas, typically in an ordeal to find the touch points to understand and project strategic direction. While doing so, I Just penned down few aspects which I thought was appropriate as a starting point for strategic decision making. Hence, just thought of sharing some foundational insight on the same.

Decision Making based on KPIs

Performance tangibility is a root that can help one to branch out their effort spread. It is key to unlock prospective opportunity doors. A clairvoyance at times in itself can be unworkable and would not be enough until there is a strong visibility/insight to the performance pointers. Everything has to be backed up by data, right!


The paradoxical nature of analysis and exceptions can limit and affect decision making. - At least, as far as the right one is concerned. To the matter of fact, decisions have tendencies of eventuality, it simply means – what meant right today might not be appropriate based on the timing and contingent effects that it has to walk through. But obviously we are not talking about a wild goose chase here, but attempting to get the organics of decision making and what triggers and factors impact it, or the backdrop for the same that determines sound decision making.

A set of measures that we can use to understand/gauge performance as per the predetermined strategic goal or estimation. These are the varying factors that oscillate, and parameters which often need a fine tune.

    KPIs are linked to business goals:
  • Business Strategy
  • Objectives
  • Business Drivers
  • USP along with strategic positioning
  • Insight 

Ideally, once these parameters or aspects have been identified, it’s time to add vigilance on the execution and tracking the progress. Measuring of success factors against success quotients. Success factors, might not change much, until there is basic shift. Once the objectives are fulfilled then the performance indicators would change.

Reliable monitoring is directly linked to performance effectiveness. Insight into process and delivery efficacy are related to the outcome. These shifts are well projected via KPIs, relevance between decision, actions and outcome. A consistent improvement will be based on these reflections.

There are always wide array of performance areas those need monitoring more or less. But to dissect the ones which directly linked to either short time or long term strategy, is significant for decision making. Primarily, the parameters or business aspects which are most important, which would rather answer vital questions. Understandably, it starts by identifying performance areas and then gathering relevant information.

    Let’s try to list down factors at a high level: 
  • Regulated and non-regulated areas
  • Factors which are linked directly to strategic outcome
  • Qualitative and Quantitative factors
  • Benchmarks
  • Internal Functional areas
  • Performance indicators and target mapping



    Advantages of KPIs at a high level:

  • Allows a measurable aspect to performance areas
  • Vigilance to performance road map, which in turns allow fine tuning to strategic goals
  • More efficient decision making
  • Adds a control factor along with management
  • Visibility towards costs and operational aspects


Now having said that, KPIs can be a significant device provided it becomes regular process. At times or initially it can be a tedium until one starts to get the data points and database right. It can also become a little cumbersome but if limited to relevancy it can provide effective intended outcome. Its definitely an effective tool nevertheless.