BusinessManagement

Steps To Implement New Performance Indicators

The  following  steps are necessary  to effectively  implement new performance indicators:

1. Recognize  the need  for enhanced performance indicators by  identifying new critical success factors .
2. Ensure top management support and commitment by underlining the need for change and by  involving  top management  in  steering  committees  to oversee the new system’s development and refinement.
3. Create  an  implementation  team  to  develop  a  common  understanding  of  the firm’s  strategies,  goals,  and  objectives;  identify  obstacles  to  implementation; and structure the approach. Input from all functions and levels of the firm as well as customers  is helpful.
4. Develop a business performance model that can put the goals, strategies, objectives,  critical  success  factors,  and  performance indicators  into  context  by viewing the firm as one stage in a value chain of suppliers, the firm, markets, and customers.

5. Understand  the  firm’s goals and  strategies by  subdividing  them  into environment, markets  and  customers, products  and  lines,  technology, operations,  finance, and organization or management issues.
6. Define the firm’s critical success factors.
7. Assess  the  current  performance indicators measurement  system  relative  to  current needs, the business model, and the firm’s goals, strategies, and critical success factors.
8. Determine which current measures should be eliminated:  those  that are redundant or overlapping and those that do not support the critical success factors.
9. Develop  the performance indicators structure by consulting with different  levels of management  to determine what  information should be  tracked, how  it should be  tracked, how often  it should be  tracked, and how  it will be used.
10. Establish the underlying technology  necessary  for  the performance  indicators  system. Consider  the  information  that  is  to be provided,  its degree of detail,  its  frequency,  its source, and the amount of data manipulation  to occur.
11. Reevaluate the performance indicators and reward systems to ensure that they are consistent with the new measurement system.
12. Ensure  continual  improvement  by  updating  the  system  to  reflect  changes  in the  firm and  in  its external environment.

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