Day 21: Identify Key Performance Indicators (KPI’s)
In today’s teaching and task you are going to identify Key Performance Indicators (KPI’s) for your organization. These KPI’s are an excellent guideline for improving your Integrated Workplace Management System Implementation.
Today’s teaching
The “31 Days to Improve Your IWMS Implementation Challenge” gives you practical knowledge about improving your IWMS implementation.
Evaluation has always been one of the key concepts of the challenge. One absolute truth is that knowledge about your IWMS can only acquired if you measure against certain criteria. If you want to improve your IWMS implementation, you need to evaluate performance.
A performance indicator or key performance indicator (KPI) is a measure of performance. Such measures are commonly used to help an organization define and evaluate how successful it is, typically in terms of making progress towards its long-term organizational goals. KPIs can be specified by answering the question, “What is really important to different stakeholders?” (Source: Wikipedia)
In the definition above I have underlined ‘making progress towards its long-term organizational goals’, as that is the most important part of the definition. As with all business activities, evaluation is only useful if it contributes to the organizational goals. If you extrapolate this concept to the IWMS, you only need to monitor performance on aspects that contribute to the overall goals of the IWMS.
Components of Key Performance Indicator
The concept “Key Performance Indicator” consists of three words, which clearly separate KPI’s from other performance indicators.
Key
A performance indicator is only key when the performance on this aspect holds a fundamental relation with the organizational goals. A great performance on a specific indicator should have a direct impact on the organizational goals. E.g. A space usage reduction by 30% will directly impact the organizations’ bottom line.
Performance
Measuring performance can only be realized if the variable can clearly be measured and quantified. To measure anything you need to set targets to measure the performance against. E.g. the reduction of operational space usage with 30% by EOY 2012 is quantified and thus measurable.
Indicator
An indicator is only for future performance and doesn’t contain historical value. E.g. measuring the space usage gives you an indication about the usage compared to your future goals.
If you want to realize a 30% reduction of operational space usage by EOY 2012, the indicator shows you what you have accomplished so far in relation to your future goals. This will be the basis for the next steps you need to take.
KPI Best Practices
Since the emergence of Key Performance Indicators as a management instrument, a lot of information has been produced about setting up KPI’s. Below you will find a list that can help you set up your KPI’s fast and efficient.
Start Simple
Don’t try to measure everything even though it has a direct relation with the organizational goals. By starting out simple you will most likely be more efficient when setting up additional KPI’s. I would recommend starting out with approximately 5 KPI’s, which even to some authors is already too much.
Relevance
Only focus on areas that have a direct relation with the organization goals. This implicates that you need to know the organizational goals regarding your IWMS as well. If you don’t know them by heart, find them. You can find the organizational goals in your folder that you’ve created on the first day of the 31 Days Challenge. (Vision, Goals)
Actionable
Some KPI’s are relevant and have direct relation with the organizations’ goals but are not actionable. If this is the case, don’t waste time on it. Only Key Performance Indicators that are actionable (within a reasonable timeframe) are interesting.
Validity
Measuring KPI’s is only useful when you measure valid indicators. E.g. the number of catering work orders per employee is not a valid indication of organizational space usage.
Data integrity
KPI’s are only useful when you measure on data that has absolute data integrity. If you don’t ensure the data integrity, the KPI will not contribute to the organization.
Capturing data
Your IWMS is an excellent tool for capturing information about your performance. In fact, most IWMS vendors provide KPI capturing modules that can support you in capturing relevant data. Keep in mind that the required output defines what the input should be.
Analyzing Data
You need to be able to analyze what you have captured. Analyzing this data is in most IWMS done through Dashboards or Business Intelligence Tools which are either available in the IWMS or already available in the organization. Before you start your KPI program, ensure you can easily analyze data.
Benchmarks
Within the IWMS domain there are quite some benchmarks available about all kinds of subjects. OSCRE, LEED, BREEAM, IFMA and quite a few other organizations have published benchmarks in all areas of Facilities Management / Real Estate. These benchmarks are extremely useful, and I can certainly recommend measuring your performance against those benchmarks.
Targets
Every rep is familiar with targets. By setting targets you can clearly measure your performance over time. Your targets should be closely related to the organizational goals.
Examples of KPI’s
Although KPI’s can differ from organization to organization, or from vertical to vertical, a few generic KPI’s can be useful for your organization.
| Space | Real Estate | Operations | Other |
| Sq ft. per FTE, Headcount, Department | Costs per Sq ft. | Costs per trade | CO2 emission per FTE, Headcount. |
| Occupied Space vs Vacant Space | Lease Revenue per Sq ft. | SLA Performance per contractor | Energy consumption per building |
| Conference Room Occupancy / Vacancy | ROI on portfolio | No-shows per conference room | Budget versus realization |
Today’s task
Today you are going to start with Key Performance Indicators. Your task is to:
- Analyze the goals of the organization
- Create 5 KPI’s that are relevant, actionable and have a close relation to the organizations’ goals
- Set targets for the short term, midterm and long-term
- Capture the information in a database (preferably automatic)
- Start measuring frequently (daily, weekly, monthly)
- Analyze the results and compare these with FM / RE Benchmarks
- Take action accordingly
Good luck!
