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When evaluating how well a KPI measures a CSF, can more than one KPI assist in the achievement of the CSF?
For example common financial measures of KPI are profit related and units measures such as cost per unit, units sold and quality costs. If CSF’s where to improve productivity through use of advancing technologies & maximisation of profits then arguably all of these measures could be used for both as you need to investments and improved productivity to achieve both?
As you can tell I am a tad confused!
Yes. You can have more than on KPI per CSF. In deed this is necessary where the CSF is hard to measure directly. For example, if good service is a CSF then all of the following could be used simultaneously to try to assess that rather hard-to-define concept:
Waiting time
% queries resolved to customer satisfaction
Customer ratings
Complaints
Ratings by mystery shoppersThanks!
So if your measuring the improved productivity, you would perhaps use ROCE (assuming investments have been made in FA), quality costs (you would expect to see a declining trend if this are has been invested in)?
You might use ROCE, but ROCE changes could be caused by many different things. For example ROCE would go up if raw material costs went down.
Better to try to find something about which there will be relatively little dispute. Eg number of units made/labour hour. Quality costs could be used, probably quite successfully, because greater productivity implied less reworking.
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