KPIs: Class Instead of Mass
From Ulrich Pantow, Product Manager, Compart
Hardly any other topic is subject to as many misunderstandings as KPIs. Many companies are poking their way into the fog in this respect. The reason: Relevant key figures are often difficult to define and often change. As a result, the KPIs can be defined arbitrarily without knowing exactly which ones are relevant today. Mass instead of class then becomes the order of the day. Another typical feature is the one-to-one adoption of seemingly common KPIs ("That's how the others do it, too") - regardless of whether they really benefit the individual company.
The fact is, however, that key figures only make sense if they are clearly oriented towards strategic objectives/specifications (e.g. cost reduction in output management / increase in customer satisfaction). Otherwise you have a lot of data, but in the end you don't know the degree to which the objectives have been achieved. Then the disappointment is great when no viable decisions for the optimization of processes can be derived from the "data chaos". Instead of "collecting information like wildfire" (based on the principle that you first take everything you get and then look later at what you can do with it), you should first take a close look at your IT infrastructure.
KPI: "X-ray image" of document production
Because of their complexity, some are then tempted to simply grasp everything that can be measured - and fall into the "big data trap": what to do with this data jungle? After all, you're not a Google & Co, using sophisticated algorithms to deliver the desired search results in a matter of seconds. Do I need information about the response times for e-mail enquiries, for example, as the head of the printing center, if he has the requirement to optimize the production line in terms of the best possible machine utilization?
So what am I looking for? What do I want to know anyway? Not everything that an IT system is able to deliver in terms of key figures must actually be measured. Some companies are content with just recording the KPIs. But what use is data if it is not evaluated? This would be the case if the doctor sent the patient for an x-ray but did not derive a suitable treatment from the findings, or could not derive it because the cause of the complaints could simply not be identified on the x-ray image. So was x-raying at all the appropriate diagnostic procedure or does it not have to be another method (MRT, computer tomography, etc.) to find out the cause of the pain?
In other words: What is missing is a detailed analysis that reveals the causes of bottlenecks and errors and at the same time uncovers potential for improvement.
In short, it is crucial to first define the KPIs that are relevant for achieving this, then measure them and prepare them in such a way that they can be used to derive concrete instructions for achieving the associated strategic targets. Creating the "X-ray image" alone is not enough.
The following questions need to be answered in this context:
- Which strategic goals are to be achieved and how do I measure their degree of fulfillment?
- Which key figures do the inventory systems provide at all?
- How do these relate to the strategic goals or are they relevant at all?
- Do they really provide information about the degree to which the requirements have been met?
- Which KPIs are important for the operational business and which for the achievement of the strategic goals?
- Can sustainable decisions in terms of corporate strategy be derived from the KPIs?
It is also important to continuously review the defined KPIs and compare them with the current corporate strategy. Are they still relevant or do they need to be redefined? Do other metrics possibly provide more and better information about the degree of fulfillment?
For the systems that supply key figures, this means that they must be flexible enough to deliver the desired information quickly and decisively and to prepare it in such a way that concrete instructions for achieving the targets can be derived from it, even if the strategic goals suddenly change.
In addition, there is another aspect: Before the data is collected, it must be clearly defined where it is collected and stored. Typical error: You leave them in the IT system in which they occur - ergo only the department that works with this application has access to the KPI.
The fact is that most companies now see the creation of a central data repository as a feasible solution. It is accessible to all, but at the same time "acts" independently of the departments and also of the document-generating and document-processing IT systems. It is crucial to store only the really document-relevant data in the repository. Otherwise, it is very difficult to generate meaningful information from the resulting "data chaos" with the aid of expensive tools. The creation of such a central data instance would lay a technological foundation for complete traceability. Instead of storing data decentrally ("silo architecture"), it is managed and consolidated by a central "control center".
Important for document processing: The repository must be able to store data from the entire production chain (e.g. printing/shipping date, document volume, postage costs, shipment bundling) as well as accompanying information (when to receive and read e-mail). When did you click on the link? When letter delivered? When to view archive copy? ). In addition, it should have a high degree of flexibility to pick up information from new media of the future - after all, customer communication is subject to constant change.
But despite all the technology: the decisive factor is the organisation - i.e. the definition of the right key figures. What information is needed to optimize processes according to strategic goals? In other words, it is not just a question of collecting them, but also of using them to control processes. It's about class, not mass.
Read more about the advantages of an IT-supported system for seamless traceability in customer communication
Background: Key Performance Indicator (KPI)
In business administration, KPIs are performance indicators used to measure and/or determine the progress or degree to which strategic and operational goals have been achieved, as well as critical success factors. For example, the KPI "Overall system effectiveness" can be used to determine the actual utilization of a machine in comparison to the theoretical one.
Typical KPI In document and output management are among others:
- Utilization of printing lines under consideration of the necessary maintenance intervals;
- Scrap rate (misprint/false delivery)
- Compliance with Service Level Agreements (e.g. adherence to delivery dates: Are shipments sent error-free on the contractually agreed deadline X? )
- Response times in customer communication
In this context, it is important to define really meaningful KPIs. These must be strictly aligned with the strategic goals set by management and provide meaningful data on their degree of fulfillment. However, measuring and collecting the information alone is not enough: It is important to correlate and evaluate the data in order to achieve the appropriate measures for further optimization of the relevant processes.