(4) KPIs – How Do They Link To Business Processes?

Imagine you are in charge of a brewery. You are in the control room and have a dashboard showing the various stages in the brewing process. These processes might include

• Receipt of raw materials
  
• Preparation
• Fermentation
• Filtration
• Bottling
• Casing
• Despatch & sale

To maximise profit, what are the key measures you want to see on your dashboard for each stage? The measures will fall into two camps, “results” and “drivers”: (1) Key Performance Drivers (KPDs), such as:

• Cost of materials
• % Raw materials rejected/accepted
• Yield of preparation
• Temperature of fermentation
• Energy cost of fermentation
• Yield of filtration
• Bottles smashed
• etc

(2) Key Results Metrics (KRMs) such as:

• Volume of fermentation mixture
• Volume of beer produced
• Number of bottles filled
• Number of cases stacked
• Number and value of cases despatched
• Profit

By monitoring key measures like these you can keep a close handle on productivity and profit. Now imagine you are looking at the processes in your own business. The exact same principles can be applied, looking at the processes in typically three groups: (1) Sales/Marketing (2) Operational, including HR (3) Financial, including credit control The key is to set out the processes, consider what is important to measure, and then track the KRD and KRM metrics in some form of BI system. How do you monitor your business?