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What is a Key Performance Indicator (KPI)?

A KPI is a type of performance measurement that helps you understand how your organization or department is performing


Why are KPIs used?

To provide a quantifiable measurement to assist parties in the construction

To ensure that the Clients requirements are met, and if not why


To be effective, a KPI must do what?

Be well-defined and quantifiable

Be communicated throughout your organization and department

Be crucial to achieving your goal. (Hence, key performance indicators.)

Be applicable to your Line of Business (LOB) or department


What are some examples of Financial Metric KPIs?

Profit, cost, revenue vs target, cost of goods sold, sales by region etc


What are some examples of Customer Metric KPIs?

Customer satisfaction and retention

No. of customers

Customer lifetime value [CLV] = look at the value your organization is getting from a long-term customer relationship etc)


What are some examples of Process Metric KPIs?

Customer support tickets [to evaluate customer service and tickets resolved],

Percentage of product defects etc


What are some examples of People Metric KPIs?

Employee turnover rate [ETR]

Percentage of response to open positions

Employee satisfaction

Salary competitiveness ratio etc


What are the FIVE steps to set up a successful KPI process?

1. Planning; to clearly establish what needs to be improved
2. Analysis; to gather data and determine how big the task of achieving the KPI is
3. Action; to develop and implement improvement plans
4. Review; to monitor actual performance against performance targets
5. Repeat


Which KPIs might be included in a client brief?

Construction Cost V Budget

Construction time

Number of defects

Number of variations

Number of Accidents

Satisfaction of the End user

Marketing value V sold value


What does RICS state about the identification of a KPI in BS EN 9004?

Needs and expectations of the client and interested parties (stakeholders)

Importance of individual products to the client organisation – present and future

Effectiveness/efficiency of processes and resources

Profit and financial performance

Statutory and regulatory requirements (where applicable)