Tuesday, May 12, 2015

KPIs AND THE IMPORTANCE OF MEASUREMENT

DMAIC

There is a great quote somewhere that goes something like - "If you cannot measure it, you cannot manage it!" ... this is so true and especially so in the Customer Service and Operations area. There are great KPI's (Key Performance Indicators) and not so great ones. The key is choosing the right one for your business and you need to choose it from a CUSTOMER point of view. There is no use choosing your KPI from any other area as if you lose your customers, you lose your revenue and obviously you lose your business!!
When defining a set of KPIs to control and measure performance, the most likely debate is probably around measuring KPIs. Another way to think about KPIs is that they are measurements designed to assess performance.
DMAIC is an abbreviation of the five improvement steps: Define, Measure, Analyze, Improve and Control and while it is a key mantra in six-sigma improvements, it is not only used in this methodology.

What KPI’s should I use?

Your choice of KPI’s depends on your intention and target audience. Which problem or issue are you trying to solve, who is it impacting, what is the impact and what outcome would you like to see afterwards are all good questions to ask when building a KPI plan.

The Traditional Mantra is -

As we've already discussed in a previous section, DMAIC stands for
  • Define,
  • Measure,
  • Analyze,
  • Improve and
  • Control
You could shrink this to just “Measure. Analyse. Act” where, KPI’s are the middle stage. While they might be at the middle stage, they are defined by the first and they should drive the third.
Sounds somewhat complicated but really they aren't. You need to measure what is important to your business, the things that impact the bottom line, and your measurements should be repeatable and objective (appropriate to the job) and not just "management speak". Talk to your staff - they are on the front line and can help guide you on what customers are really looking for!

1st Call Resolution & Downtime

Two common KPIs are 1st Call Resolution and Downtime (please note I have not said these are good ones - that is something you will need to determine for yourself depending on your interpration of whats important to your customer ... this is something I shall discuss in greater detail in later posts). Similarly, KPI’sshould be measured over time and you should not expect your initial snapshot to give you the full picture as you will frequently have to 'massage' and/or revise your measurement criteria and focus until you are measuring the correct information.
1st Call Resolution -
Measurement of the %'age of customer issues resolved at the first call.
% Uptime/Downtime -
Measurement of the %'age of time the service is available (or not)
There are literally thousands (if not millions) of KPIs available, so there is bound to be one that actually meets the needs of your organization or business. A great resource to search if you've never used KPIs before is KPI Library. They offer free access to their library of KPIs and they have a very friendly and interactive community.
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