Try this simplified toolkit approach based on standards defined by the Federal Enterprise Architecture (FEA) board, along with NASCIO:
Performance Reference Model (PRM) •Inputs, outputs, and outcomes •Uniquely tailored performance indicators
In this category, you should immediately think Scorecard (Balanced Scorecard and otherwise),:
–Each scorecard have 4-6 perspectives which are logical / categorical groupings of key indicators, or what I like to call ‘affinitized’ KPIs.
–Each perspective has < 6-7 KPIs (Key Performance Indicators) (if you receive pushback, and you will, as people would define a KPI for the percent of time the Express Grocery queue contains purchasers with more than the specified limit of 12 – 15 items, doll it up for the BBB as a complaint, and deliver it with such ferver one almost winces when they realize said complaint is recycled faster than their next trip to the grocery store
–Remember the 3 keys to success with defining KPIs: are they actionable, are they measureable (not in a future state, but today can you measure it) and will they drive a performance based behavior change (think incentives, as they represent a perfect example of a performance based behavior changer).
– So, ask the question now… "That’s a long list, John or Jane Exec…First, what are you going to do with that information [the so-what question distinguishing actionable from interesting]…can you really drive performance improvements in your business with more than 5 indicators in the case where all 5 go red at the same time or if you don’t want to be direct, you can ask "how do those KPIs link to your performance objectives personally – Any leader worth their title will take the time to align the activities and work tasks that they personally, or through delegation, list in their performance reviews.
–This process can be started at any layer in an organizational hierarchy and is called Goals / Objectives Alignment or Cascaded KPIs
–Most leaders you ask have no more than a few KPIs that they ACTUALLY care about – just over the hurt feelings now, or feeling that you have wasted x number of hours measuring and reporting on metrics that top leadership doesn’t care about; if you have been in BI long enough, you will have experienced this at least once in your career.
Business Reference Model (SRM) • Lines of Business (functions and sub-functions) • Agencies, customers, partners
How will the performance KPIs cascade down to the individual contributor from the CEO’s goals? Easy – take this example:
CEO sets a goal of wanting to increase revenue by growing the Sales line of business, specifically new customer sales. He sets a goal of 35% growth of new sales revenue, which the VP of Sales is tasked to drive. They , in turn, assign the goal to the account managers in charge of new customer accounts who then add the same goal to their salesforce in the field. The KPI becomes New Sales Growth >= 35%, frequency is set to weekly with hierarchical rollups to monthly and quarterly aggregations.
–Now, you may ask yourself, what about the Operations department where Customer Sales and Service (aka Telesales) lives, and bingo! You’re getting it now…Even though it was tasked to the VP of Sales, they, or that same CEO, should have realized that the Telesales department can also generate revenue from new sales, just those that come through a different channel. Instead of the typical route of calculating in field sales and measuring the sales department for a goal of this nature, the Operations VP should have the same goal on their performance review as the VP of Sales, which they, in turn, delegate to their Telesales Center Managers, who delegate to the Supervisors who delegate it to the agents on the phone – While it is an implicit delegation as one who is hired to man a Telesales line understands their job is to answer the phone and make sales (thus, encouraging sales growth), it is still an action that is mandated by a supervisor, who received the mandate from their manager, who likely received the goal from the corporate office VP of Operations or person responsible for the Telesales center.
–It flows from top or bottom (vertically) as well as horizontally since in this example, it covers two horizontal business units (Sales and Operations).
–This is why starting with objectives or goals makes this process, that is, cascading KPIs, that much easier because you have a definitive starting point and end point which is that same objective/goal.
New Sales Growth >= 35% is the same whether you start with the call center agent whose awesome sales performance on the phones contributes to making her supervisor meet their goal which was to grow sales by 35% who enabled their manager who enabled the VP of Operations and the VP of Sales objectives who then met or exceeded their CEO’s original mandate.
Service Component Reference Model (SRM) • Service domains, service types • Business and service components
–A service component is defined as "a self contained business process or service with predetermined functionality that may be exposed through a business or technology interface.
Data Reference Model (DRM) • Business-focused data standardization • Cross-agency information exchanges
Technical Reference Model (TRM) • Service component interfaces, interoperability • Technologies, recommendations