While at TechEd Munich, I sat on a couple of Business KPI wiki panels with Nadim Razvi and Marilyn Pratt. We discussed a number of topics but high on the list was the notion that Business KPIs make a lot more sense when they’re contextualized. What do I mean?
In the world of finance for example, the internal accounts used for decision making purposes are rarely, if ever, aligned to the externally reported GAAP/IFRS based accounts. While there are practical reasons why this might be desirable, it means there is a permanent disconnect between the manner in which accounts are prepared for different purposes. I’ve never felt this is desirable because it makes for difficulties in reconciling statements of account, argument over the meanings of certain figures and can mean increased audit costs.
Given that all companies are required to report under either the IFRS or GAAP systems, it makes sense to look at KPIs in a fresh way, perhaps seeing them as a medium through which internal and external accounting can be more readily reconciled.
Or let’s think about HR. While I’m no expert in that area, I’m familiar with the many different ways that HR views KPIs. I know for example that many HR experts find it irksome that accounting types (like me!) think there is a definitive way to define HR KPIs that effectively means they are reduced to numbers. While I have sympathy for that view, I’m interested in learning whether HR professionals have use cases to demonstrate the value of HR KPIs and whether in fact there is a good case for arguing alternative KPIs for the same measure based on need within particular industries.
Does that kind of context make sense? I think it does but others may disagree. Would it be valuable to include contexts as additional information around which Business KPI development might continue?
In any event, the idea is not to necessarily put this out as something to be set in stone but more as a discussion point around which the community might express views that will help guide the progress of defining Business KPIs.