Leading v/s Lagging KPIs

We have always been thinking what leading and lagging indicators

are. Now is the time to know them.

KPIs are categorized on the basis of the timing relative to

achievement of corporate goals/objectives, into leading and lagging
KPIs.

Leading indicators measure key drivers future outcomes. In other

words, they measure activities that have a significant effect on
future performance. Here the individuals are given more time to
influence the outcome. Examples of Leading indicators would be
Scheduled Delivery Time. As one can notice, Scheduled Delivery
Time is a KPI where delivery time is at a later date. Hence the
individuals get enough time to meet the target.

Lagging indicators measure the output of past activity. Examples

being Cost of Goods Sold, and many others. In SCPM, most of SAP
delivered KPIs are Lagging KPIs.

However, there are measures that fall in neither of the above types.
These are the metrics that signal the health of various operational
initiatives or processes. These are none other than Diagnostic KPIs.
But some even say that they fall into Lagging/Current KPIs.

Ideally, the same KPI can be leading in a perspective and lagging in

the other. However, if the KPIs are global(like in case of SCPM), we
need different KPIs to cater to the need.

If anyone wants to comment on or correct this, they are welcome…