KPI For Business Performance Analysis: Cell: 01936000036, 01799985299, 01740868520

Learning session on “KPI for Business Performance Analysis”
KPI for Business Performance Analysis
• Rupak M Nasrullah Zaidi, KPI, HR, OD Practitioner,

Business & Management Consultant
• KPI & Performance Consultant
• Business & Management Consultant
• Senior Fellow, Management & Strategy Institute, USA
• International Professional Member, Association of Talent Development
(ATD), USA
• Member, Certified Professional Trainers’ Network, Canada
• Member, American Management Association, USA
• Consultant for HR & Organization Development
Email: rmnzaidi@gmail.com, FB: f:/zaidirupak
Cell: 01936000036, 01799985299, 01740868520
Facilitated by: Rupak Zaidi, KPI, Business & Management Consultant [rmnzaidi@gmail.com] 1
Easy & Better for us
Be VALUE able to get POWER in

Professional area
Objective of the session
• Exchange the views regarding concept and practices of

KPI
• Share knowledge on Business Performance Area
• Participate cross learning on “Drive Business
Performance through KPI based PMS”
Indicator
• Means: Measurement factor/ areas
• Time factor: within this month/ this week/
year etc
• Quality / quantity standard: 10/15/ 0%
error/ 1 % error/ 1 crore etc
• Cost
• Profitability
• Sales Volume
• Retention
• Engagement
• Learning
Performance Indicator
• Measurement areas of
Results
• Differ due to different
positions
• NOT Target/ Goal
• Measurement area of Target
/ GOAL Achievement
KEY Performance Indicator
• Measurement areas of Key

Results
• NOT all results
• Measurement area of Target /
GOAL Achievement [Key
Goals]
Result Area
•Area through which the Result is visible
•Example: Profit, Compliance
Goal/ Target
• Future oriented
• Based on Prediction
• Sometimes Goal setting
influenced by
Performance Indicator
Measures/ Source of Information

• Instrument/ Tools/ Record /
report through which
achievement can be identified
• Balance Sheet for measuring
organizational Performance
• Sales volume for measuring
performance of Sales people
Consultancy Service by Rupak Zaidi

• KPI Setting
• Performance Improvement Strategy development
This is not part of material
• Business Process reengineering

• Employee Accountability & Monitoring System development
• Manpower Assessment
• Competency Mapping
• Setting 5 S & Kaizen culture
• Business Strategy Development
• Visual Management System development
• Business Automation
• HR Auditing
• Business Consultancy
• Management Consultancy
KPI: Insights
1 Indicator not target
2 Universal 3 Aligned
4 Relevant
Standard measurement 6
Cascade down to
5
tools individual
7
More focused on
number oriented goal
8 Cost Effective 9 Verifiable
THE VALUE ADDED BY KPIs

Improvement
Clarity Focus
Communication
The World
The World of Understand KPIs KPI Typology KPI Taxonomy
KPI Selection
KPI Alignment
KPI Documentation Working with Data Gathering Data Visualization Course 13
KPIs
KPIs Targets Review
TERMINOLOGY STANDARDS
Objectives KPIs Initiatives
start with start with start with
$ = Value of
Verb # = Number of Noun
% = Percentage of
Increase customer satisfaction $ Revenue per client CRM software implementation
# Complaints received
% Customer satisfaction
The World of Understand KPIs

Understand KPIs KPI Typology KPI Taxonomy
KPI Selection
KPI Alignment
KPIs Targets Review
Program for Sales Personnel by Rupak Zaidi

• Selling Skill for Show Room Sales Persons
• Customer Service Excellence for Sales Professional
• Salesmanship Master Class

• Competitor Analysis: Tool for business decision
• Customer Service Master Class
• Brand Leadership Master Class
• Blue Ocean Strategy for Sales
• Innovative Business Strategy
• The Sales PRO: Think, Act & Sale like PRO
• Emotional Intelligence for Sales Success
• Negotiation Skill for Sales Professional
• LEAN Selling: Concept & Competencies
• Customer Retention Strategies
IDENTIFY THE KPIs

% Employee satisfaction
$ Turnover
Finalise project by 31 December
# Clients from referrals
# Employees
% Projects delivered on time and on budget
Quality
% Defect rate
$ Budget
Increase market share to 28%
KPI Definition:
A measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s
activity.
(The KPI Institute)
The World of Understand
Understand KPIs
KPIs KPI Typology KPI Taxonomy
KPI Selection
KPI Alignment
KPIs Targets Review
Types of KPI
Strategic
As per
Contribution
Operational
Types of KPI
Leading
As per
Focus Lagging
LEADING VS LAGGING KPIs
Leading indicators = measure

Lagging indicators = look
things that address what can Vs.
back at past performance
create future value
Source: Institute for Evidence Based Change (2017)
The World of Understand KPIs KPI Typology

KPI Typology KPI Taxonomy
KPI Selection
KPI Alignment
KPIs Targets Review

Task:
• Cluster the following examples into leading and lagging KPIs.
No. KPI examples Leading or lagging?

1 % Employee engagement
2 % Customers from referrals
3 % Customer satisfaction
4 % Market share
5 $ Profit
6 % Returning customers
7 # Service lead time
% Staff with competencies
8
at desired level

KPI Selection
KPI Alignment
KPIs Targets Review

KPI Selection
KPI Alignment
KPIs Targets Review
Types of KPI
As per Result Chain
Output Impact
Outcome
Types of KPI
As per measurement
Qualitative Quantitative
QUALITATIVE VS QUANTITATIVE KPIs

“Quantitative KPIs are likely to be based on system collected statistics such as number of users whereas
qualitative KPIs may be based on more subjective measurements from user interviews and surveys.”
Public Record Office Victoria, Australia (2010)
“Quality KPIs are statistical measures that give an indication of output quality. However, some quality
indicators can also give an indication of process quality.”
ESS Quality Glossary, European Union (2010)
All KPIs are quantitative, but they can measure different aspects of an objective, such as:
•Volume - # Products sold

•Quality - % Products error rate, % Customer satisfaction with products bought
•Monetary values - $ Sales
Source: Public Record Office Victoria, Australia (2010)
Eurostat, European Union (2010)

KPI Selection
KPI Alignment
KPIs Targets Review
IDENTIFY THE KPIs REFLECTING QUALITY

Find in the below list the KPIs that reflect quality as perception.
1. $ Turnover
2. # Production cycle time
3. # Brand image index
4. # Customer satisfaction score
5. % Equipment utilization rate
6. % Error rates
7. % Employee engagement
8. $ Operating costs
9. % Market share
10. # Service quality rating

KPI Selection
KPI Alignment
KPIs Targets Review
EFFICIENCY VS EFFECTIVENESS KPIS
Effectiveness
Desired output/outcome Inputs Processes Outputs Outcomes
Efficiency

KPI Selection
KPI Alignment
KPIs Targets Review
EFFICIENCY VS EFFECTIVENESS KPIS

Effectiveness = the extent to which a desired Efficiency = extent to which time, effort or
outputs or outcomes is achieved. cost are well used for the desired results.
KPI examples: KPI examples:

Sales Cost per call
Customer satisfaction index Time to process requests
Compliance with quality standards Equipment utilization rate
Do the right thing! Do things right!

KPI Selection
KPI Alignment
KPIs Targets Review
Financial
Types of KPI
Learning &
Customer
Growth
Internal Business
Process/
Operational
As per Function [based on Balanced Scorecard]
BSC Perspectives
Perspective Key Concept Key Focuses
• Who are the customers?

Customer/ • How do you delight them?
Satisfaction • What segments do you wish to address?
Stakeholder
• What goals do you wish to achieve with partners?
• What are your goals for the distribution channel?
• What are the financial targets?

Financial Financial • What drives these targets?
Stewardship Performance • What kind of profit and revenue to achieve?
• In a nonprofit organization, what budget guides you?
• In which processes must we be the best to win
Internal Process Efficiency customers?
• What internal activities do we need to sustain
competencies?
• What must we be great in performing, and how do
Knowledge we train our people to get up to that level?
Organizational and Innovation • What climate and culture nurtures growth?
Capacity • What do we have to do in developing and training
our people to achieve the other objectives?
Choosing your perspective

•The Four perspective that we mentioned is not
mandatory
•Kaplan and Norton themselves suggest that the four
perspectives “should be considered a template, not
a straitjacket”
•Many organizations have developed perspectives for
innovation, research and development,
environment, suppliers, leadership, and the
community.
Choosing your perspective

• The choice of perspectives for your Balanced Scorecard
should ultimately be based on what is necessary to tell
the story of your strategy and create a competitive
advantage for your organization.
• For example, a manufacturing firm may rely heavily on
suppliers in order to manage its operations to the
maximum of efficiency. Adding a perspective devoted to
supplier relations could make good business sense for this
organization
STRATEGY MAP
Source: The KPI Institute (2017)
The
The World
World of Understand KPIs KPI Typology KPI Taxonomy
KPI Selection
KPI Alignment
KPIs
KPIs Targets Review
KPI DNA MAP: Example

Customer Service (CS) example:
Costs $ Cost per call $ Customer Service costs
Timeliness # Time to solve customer tickets % Customer tickets solved on time

# Errors in processing tickets per
Quality % Customer satisfaction with CS
agent
Quantity % Customer tickets solved per hour # Customer tickets solved
The World of Understand KPIs KPI Typology KPI

KPI Taxonomy
Taxonomy
KPI Selection
KPI Alignment
KPIs Targets Review
KPI DNA MAP: Exercise

Scenario:
• You are part of the management team in your
organization. Based on the context provided,
you have to recreate the KPI taxonomy as per
KPI DNA Map

KPI Selection
KPI Alignment
KPIs Targets Review
KPI DNA MAP

Production – Performance report for the 4th Q of 2017
• Production costs seem to have increased by 10% during the last quarter, negatively
influencing the cost per item, as well. A possible cause for these financial results is the
low production capacity utilization rate and a low productivity in terms of units per
man-hour and items produced per hour.
• Furthermore, direct costs for material variance has increased as well to $ 1 million due
to changing the main supplier.
• All these events negatively impacted the results for budget variance, although the
production output stayed the same.
• A positive trend was noticed in terms of production quality as the defect rate was
reduced to 2% and less waste was generated.
• Regarding timeliness, the production cycle and production schedule attainment targets
were met.

KPI Selection
KPI Alignment
KPIs Targets Review
KPI DNA MAP

PRODUCTION
Costs Timeliness
Quality Quantity

KPI Selection
KPI Alignment
KPIs Targets Review
Program for any Professionals by Rupak Zaidi

• Business Intelligence for Managers

• Managerial Competencies Master Class
• High Impact Middle Management
• Think Like CEO: Organizational Leadership Approach
• Managerial Communication Master Class
• Business Communication Master Class
• Customer Service Master Class
• Organizational Leadership Master Class
Area of DNA Map KPI

Cost % total cost increase
% Increase cost / item
% capacity utilization
% increase cost of material
Timeliness # Production cycle time [days]
# days to complete production
Quality % reduction of defect rate
# reduction of wastage rate
Quantity # unit per man hour
# items produced per hour
The World of Understand KPIs KPI Selection KPI Documentation Working with Data Gathering Data Visualization Course
KPI Typology KPI Taxonomy KPI Alignment
KPIs Targets Review
ALLOCATE KPIs FOR EACH OBJECTIVE

Financial No. KPIs list
Increase profitability
1 $ Operating expenses
2 % Employees meeting professional development requirements
Maintain financial discipline
3 # Complaints from customers
4 % Profitable customers
Customer
5 % Budget variance
Maintain high levels of customer satisfaction
6 # Innovation ideas
7 # Employee engagement index
Serve new market segments profitability
8 # Training hours per full time equivalent (FTE)
9 % Market share
Internal Processes
10 % Net profit margin
Ensure quality services
11 # Procedures reviewed
12 $ Net cash flow
Improve process management capability
13 % On time delivery of orders
14 # Positions filled
People, Learning & Growth
Nurture engagement, creativity and innovation 15 % Customer satisfaction
16 % Orders error rate
Develop workforce skills and competences 17 % Critical positions with succession plans in place
18 % Processes improved
Ensure talent availability

KPI Selection
KPI Selection
KPI Alignment
KPIs Targets Review
Program for any Professionals by Rupak Zaidi

• Competitor Analysis for better business

• Emotional Intelligence at work
• Employee Engagement
• Employee Retention
• Interpersonal Skills for organizational excellence
• Workplace Innovation
• The Power of Positive Thinking
• Developing GREAT Managers: 10 Power Strategy
Objective KPI
Financial
Increase profitability 1, 10
Maintain financial discipline 5, 12
Customer
Maintain high levels of customer satisfaction 3, 15
Serve new market segments profitability 4, 9,
Internal Processes
Ensure quality services 13, 16
Improve process management capability 11, 18
People, Learning & Growth
Nurture engagement, creativity and innovation 6, 7
Develop workforce skills and competences 2, 8
Ensure talent availability
KPI Selection KPI Documentation
14, 17
Working with Data Gathering Data Visualization Course
KPIs KPI Alignment Targets Review
VALUE FLOW ANALYSIS

WHAT?
1
• Logical model to indicate the value generation from inputs, process
2
outputs and outcomes.
3 WHY?
• Gain insight into how the objective can be measured from different perspectives.
• Provides an overview of the process involved by achieving the objective.
• Enables the selection of the most relevant KPIs for the objective.

KPI Selection
KPI Selection
KPI Alignment
KPIs Targets Review
VALUE FLOW ANALYSIS

OBJECTIVES INPUTS PROCESSES OUTPUTS OUTCOMES
# Time to answer an
# Customer service % Solved inquiries
inquiry % Customer satisfaction
representatives index
Improve customer
satisfaction with
service levels
# Client needs
$ Customer # Meetings with key % Returning customers
identified
engagement budget customer

KPI Selection
KPI Selection
KPI Alignment
KPIs Targets Review
Concept of Business
Input
= Output
Input > Output
Input < Output
Conversion/ Transformation
• Efficiency
• Intelligence
• Management
• Effectiveness
• Productivity
• Process Reengineering
• Strategy
Canvas Model
Key activities Customer Customer
Key partners What will your business relationships segments
spend the most time doing?
What types of interactions Who are your paying
What external
Product development? will your customers expect customers?
partnerships should
Sales? Other? to have with you?
you invest in? Do you have any non-
Value paying customers?
• Mentors?
• Lawyers? proposition How large is this group?
• Distributors?
Key resources Channels Do you have multiple
• Suppliers? customer segments?
How will customers find
What will it cost for: out about you?
Manufacturing?
Intellectual property? How will you get products
Human resources? to them?
Cost structure Revenue streams

• How might you make $ from this?
How much time and money will be required to do this? • What value, other than money, are you hoping
to create?
Program for Operational Excellence by Rupak Zaidi

• 5 S Office Management to Increase Efficiency &
Profitability
• Waste-the silent Killer of Profit: Discover & Eliminate

• Job Methods (JM) Training
• Job Safety (JS) Training
• Office Kaizen for increasing Productivity
• Lean Office for Productivity & Profitability
• Overall Equipment Effectiveness
• Standard Work Procedure
Business Performance Areas

• Business Efficiency/ Financial Efficiency
• Production Efficiency
• Sales Efficiency
• Business Development Efficiency
• Fund Management Efficiency
• Process Efficiency
• Employer Branding/ HR Practice efficiency
• Supply Chain Efficiency
• Cost Efficiency
• Channel Efficiency
• Technical/ Technological efficiency
Business Efficiency/ Financial Efficiency
Cost per 1 taka profit Total Cost/ Net Profit Monthly

Investment per 1 taka Total Investment/ Net
Yearly
profit Profit
Net Profit
Operating Profit
Production Efficiency
Total Sale/ Total Man Hour
Monthly
Product Value/ Man Hour worked
% of Raw Material Cost to (Total Sale/ Total Raw Material
Quarterly
Sales used)%
Wastage Rate Wastage/ Total Raw Material Monthly
Rejected Unit/ Total Production
Rejection Rate Monthly
or Rejected value/ total sales
Business Development Efficiency

No of New Customer in last
Number Monthly
3 months
Total Branding & Promotional
Yearly
Cost per lead Cost/ No of new customer
No of customer generated/ No
Monthly
Customer Conversion ratio of Customer visited
Total number of old customer
ordered this year/ Total number Yearly
Customer Retention rate of customer
Sales Efficiency
% of Salary to Sales (Total Sale/ Total Salary)% Monthly
Total Branding & Promotional
Monthly
Cost per Lead Cost/ No of new customer
Gross Profit Margin (Revenue-Cost)/Revenue*100 Yearly
% of Credit Sales Credit Sales/Total Sales % Monthly
Average Credit Period per
(No of days * Amount )/1 lac Yearly
Lac
Characteristics of KPI based PMS
• Objective oriented Assessment System

• Holistic view of Performance
• Link with different point of supply chain
• Unbiased PMS
• Balanced PMS [Balancing with different aspect
of Balanced Scorecard or CEEPP]
What are the benefits of KPI

• Individual Benefit
• Supervisor’s Benefit
• Organization’s Benefit
Why KPI for ME

• Clarification of Expectation and Standard
• SW analysis
• Proper Planning
• Self Monitoring
• Focus Setting
Why KPI for Department?

Analyze SW of department
Distribute goal among the members impartially
Monitor the overall goal achievement
Smart reporting
Strategic Decision Making
Resource allocation
Ensure performance through LEAD indicator
Organizational Benefit
• Monitor performance of different

processes with the minimum time and
effort needed
• Using KPI based PMS for impartial
evaluation
• Encourage teamwork
• Encourage Performance
• Guiding Action Plan
Area of Excellence for KPI Professional

• Area of Excellence (AoE)-1: Business Competency
• AoE-2: Process Competency
• AoE-3: Result Chain Analysis Competency
• AoE-4: Functional Integration Competency
• AoE-5: Role Profiling Competency
• AoE-6: Project Management Competency
• AoE-7: Goal Setting Competency
(AoE)-1: Business Competency

• Financial Intelligence
• Business Value Driver
• Business Strategy
• Competitor Analysis
• Organizational Comprehension
• Management Skills
• Personal Characteristics
• Technical Competencies
Approaches of KPI
•Result based
•Output
•Outcome
•Impact
•Task Based
Scope/ Level of KPI
•Organizational Level
•Departmental / Team Level
•Individual Level
Steps of KPI development &

implementation program: Standard
•Design/ Analyze Organizational Goal/ KPI
•Design and analyze Functional/ Departmental
Goal/KPI
•Identify and analyze Role or Deliverables of
Individual to achieve functional/departmental
goal/KPI
•Define the measurement criteria/ KPI of that
deliverables
Steps of KPI development & implementation

program: Standard
• Design the Action Plan/ Job Description to achieve KPI
• Design measurement Tools for measuring KPI
achievement
• Design Assessment method and format
• Design KPI achievement monitoring tools and SOP
• Design method and format for KPI achievement analysis
• Link with reward and punishment
Example of organizational KPI

• Profitability
• Net Profit
• Operating Profit
• Number of Customer
• Market Share
• Financial Ratio
• Productivity
• Expansion Rate
KPI Example: Sales Department
•Volume of Sales
•% of growth
•No of Customer
•Cost to Sales
•Profitability
•% of return
KPI Example: Production

•Unit of Production
•Productivity
•Utilization of Manpower
•Utilization of Capacity
•Cost per unit
•Wastage Rate
Some Advance HR Program by Rupak Zaidi

• HR Accounting Master Class

• Business Intelligence for HR Professionals
• Financial Intelligence for HR
• HR Analytics Maser Class
• Competency Mapping Master Class
• Talent Management Master Class
• Assessment Centre Master Class
• TNA-Budget-ROI of Training
Format
KRA KPI Wei Targ Achiev Score (F) Final
(A) (B) ght et ement If the higher the Score
(C) (D) (E) better: (E/D)*100 F*C
If the lower the
better: (D/E)*100
Recrui Lead 15 60 70 86 13
tment time to % day days
hire s
Compete
Profit
Model of ncy
Success
Management Perform Engagem
System ance ent
Effort
Some Advance HR Program by Rupak Zaidi

• TOT Master Class
• Facilitation Skill Master Class

• Psychometric Test in Recruitment & Selection
• Recruitment & Turnover Cost Management
• ROI of HR
• Organization Development
• Balanced Scorecard Master Class
CEEPP model for Success Management System
CEEPP
• Ultimate goal
Profit
• Means Achievement
Performance
• Means initiative or action
Effort and its continuity
• Means attachment both
Engagement
physically and mentally
Competency • Comprised of Knowledge,
Skill and Attitude
Waste areas
Over-production
Producing more than what the
customer needs
Intellect Waiting
Not using employees full Employees waiting for another
intellectual contribution equipment, process or information
Over-processing Unnecessary Motion

Adding excess value when the Extra physical/mental motion that
customer does not require it
Waste doesn’t add value
Defects Transportation
Reprocessing, or correcting Moving product from one
work place to another
Inventory
Building and storing extra services the
customer has not ordered
DOWN TIME: Defect, Over Production,

Waiting Loss, Not utilized workforce,
Transportation, Inventory, Motion, Excessive
Process
Some example of KPI
KPI: Salary Competitiveness Ratio (SCR)
Salary offered by your company

SCR
(Competitor)
Salary offered by your
competitor
Salary offered by your company

SCR (Industry)
Average salary offered in the
industry or sector
KPI: Cash Conversion Cycle [CCC]

Cash conversion cycle (also known as cash cycle ) helps to answer
the key performance question ‘How well are we doing at
managing a healthy cash flow?’ This metric is usually reported
annually, but if cash flow is a concern it should be measured
quarterly or even monthly.
Days Inventory
Outstanding (DIO)
Cash Conversion Days Payable
Cycle (CCC) Outstanding (DPO)
Days Sales
Outstanding (DSO)
Days of Inventory Outstanding [DIO]

•DIO, tells you how many days inventory sits on
the shelf on average.
•Lower number is better
•But not so low that you don’t have sufficient
inventory and are missing potential sales.
Calculation of CCC
• Calculation of DIO [Days of Inventory Outstanding]
• Calculate Cost of sales per day: Cost of Goods Sold/365

• Calculate average inventory figure: (Beginning Inventory +
Ending Inventory )/2
• So, DIO = Average Inventory Figure / Cost of sales per day
Days Sales Outstanding or DSO

• Days Sales Outstanding or DSO can be described as average Accounts
Receivable divided by Revenue per day
• DSO tells you how many days after the sale it takes people to pay you
on average.
• A lower number is better
• DSO = [(BegAR + EndAR) / 2] / (Revenue / 365)
Calculation of CCC
• Calculate DSO:
• Calculate Net sales per Day [yearly sales/ 365]

• Calculate average accounts receivable
• So, DSO = Average Account receivable/ net sale per day
Operating Cycle
• Operating Cycle = DSO + DIO
• This is how many days it takes for a company to process raw material
and/or inventory and collect cash from the sale.
• Basically the Operating Cycle tells you how many days it takes for
something to go from first being in inventory to receiving the cash
after the sale.
• You want this number to be low meaning that merchandise isn’t
sitting on shelves too long and customers are paying relatively quickly.
Days of Payables Outstanding [DPO]

• Days of Payables Outstanding tells you how many days the company
takes to pay its suppliers.
• Higher is better
• DPO = [(BegAP+EndAP) / 2] / (COGS / 365)
Calculation of CCC
• Calculate DPO:
• Calculate cost of sales per day

• Calculate average accounts payable figure
• DPO = Average account payable / cost of sales per day
• Now: CCC = DIO + DSO – DPO
KPI: Cash flow solvency ratio

The key performance question cash flow solvency ratio helps to answer is:
‘How easily are we going to meet our debts?’
Cash flow From Operations

Cash flow
solvency
ration Total Liabilities
If you were to decide to seek funding, this metric would be of particular

interest to decision makers at the funding organization because it indicates
how easily you can pay your current debts. The higher the ratio, the better as
it indicates that there is plenty of money in the pot to pay the debts.
Developing Customer, Sales and Marketing

KPIs
Asking if Your Customers Would Recommend You:

Net Promoter Score (NPS)
Developed and trademarked by Fred Reichheld, Bain &
Company and Satmetrix, the Net Promoter Score (NPS) is one
option.
Introduced by Reichheld in his 2003 Harvard Business Review
article as the ‘one number you need to grow’ the metric is
based on just one simple question:
‘How likely is it that you would recommend xxxx company to a
friend or colleague?’
Asking if Your Customers Would Recommend You

(NPS)
NPS is based on the fundamental premise that every

company’s customers can be divided into three groups
Passives: Satisfied but
Promoters: Loyal unenthusiastic customers Detractors: Unhappy
enthusiastic customers who may or may not buy customers who can actively
who will continue to buy from you again. Passives damage your business
from you and recommend are vulnerable to a well- through negative word of
you to others. Promoters positioned competitor mouth. Detractors can
fuel growth. offer and don’t necessarily impede growth.
feel any loyalty to you.
Understanding the NPS formula

Using a scale of 0 to 10, where 0 indicated ‘not at all likely’
and 10 indicate ‘extremely likely’
customers are asked to answer the question: ‘How likely is it
that you would recommend [insert company or product
name] to a friend or colleague?’
• ✓ Promoters are customers that indicated a score of 9–10
• ✓ Passives are customers that indicated a score of 7–8
• ✓ Detractors are customers that indicated a score of 0–6
Empirical research has shown that there is a striking
correlation
Measuring NPS in practice

• The key performance question NPS helps to answer is: ‘To what extent are
our customers willing to recommend us? The formula for calculating NPS is
as follows:
Percentage of Percentage of
NPS Promoters Detractors
Measuring Customer Lifetime Value (CLV)

• The key performance question Customer Lifetime Value (CLV) helps to
answer is: ‘How well do we understand the financial value from our
customer relationships?’
Average Value of a Number of Repeat

CLV
Sale Transactions
Average Retention Time in

Months or Years for a
Typical Customer
KPI: Capacity Utilization Rate

• The key performance question Capacity Utilization Rate helps to
answer is: To what extent are we leveraging our full
production/work potential?
Actual capacity over specified
time period x 100
CUR
Possible capacity over
specified time period
• For example say your production plant could potentially
produces 20,000 units per day but only produces 15,000 units
per day.
• The CUR is: 15,000/20,000 × 100 = 75 per cent
Measuring rework levels in practice

• The key performance question Rework Level helps to answer is:
How effectively are we driving waste out of our processes?
Number of defective
products requiring rework
over a specific period
Rework
Levels 100
rate Total number of products
produced over a specific
period
Contact details
Email: rmnzaidi@gmail.com,
FB: f:/zaidirupak
LinkedIn: rmnzaidi@gmail.com
Cell:, 01799985299, 01936000036,
01740868520

KPI For Business Performance Analysis: Cell: 01936000036, 01799985299, 01740868520

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Learning session on “KPI for Business Performance Analysis”

KPI for Business Performance Analysis

• Rupak M Nasrullah Zaidi, KPI, HR, OD Practitioner,

Easy & Better for us

Be VALUE able to get POWER in

Objective of the session

• Exchange the views regarding concept and practices of

KEY Performance Indicator

• Measurement areas of Key

Measures/ Source of Information

Consultancy Service by Rupak Zaidi

• Business Process reengineering

THE VALUE ADDED BY KPIs

Verb # = Number of Noun

Increase customer satisfaction $ Revenue per client CRM software implementation

The World of Understand KPIs

Program for Sales Personnel by Rupak Zaidi

• Salesmanship Master Class

IDENTIFY THE KPIs

LEADING VS LAGGING KPIs

Leading indicators = measure

Source: Institute for Evidence Based Change (2017)

The World of Understand KPIs KPI Typology

LEADING VS LAGGING KPIs

No. KPI examples Leading or lagging?

The World of Understand KPIs KPI Typology

LEADING VS LAGGING KPIs

The World of Understand KPIs KPI Typology

As per Result Chain

QUALITATIVE VS QUANTITATIVE KPIs

•Volume - # Products sold

Source: Public Record Office Victoria, Australia (2010)

Eurostat, European Union (2010)

IDENTIFY THE KPIs REFLECTING QUALITY

The World of Understand KPIs KPI Typology

EFFICIENCY VS EFFECTIVENESS KPIS

Desired output/outcome Inputs Processes Outputs Outcomes

The World of Understand KPIs KPI Typology

EFFICIENCY VS EFFECTIVENESS KPIS

KPI examples: KPI examples:

Do the right thing! Do things right!

The World of Understand KPIs KPI Typology

• Who are the customers?

• What are the financial targets?

Choosing your perspective

Choosing your perspective

Source: The KPI Institute (2017)

KPI DNA MAP: Example

Costs $ Cost per call $ Customer Service costs

Timeliness # Time to solve customer tickets % Customer tickets solved on time

The World of Understand KPIs KPI Typology KPI

KPI DNA MAP: Exercise

The World of Understand KPIs KPI Typology KPI Taxonomy

KPI DNA MAP

The World of Understand KPIs KPI Typology KPI Taxonomy

KPI DNA MAP

The World of Understand KPIs KPI Typology KPI Taxonomy

Program for any Professionals by Rupak Zaidi

• Business Intelligence for Managers

Area of DNA Map KPI

ALLOCATE KPIs FOR EACH OBJECTIVE

The World of Understand KPIs KPI Typology KPI Taxonomy