OCT 1, 2004 1:00am ET

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Key Performance Indicators: The Multiple Dimensions

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T he alignment of KPIs with organization vision/mission/ strategies/objectives is the key to realizing bottom-line impact. The challenge is to develop KPIs that provide a holistic and balanced view of the business. Faced with potentially hundreds (if not thousands) of candidate metrics, how does one select those that are most meaningful? One potential approach is to think of individual KPIs not just as a singular metric, but as a balanced metric that incorporates several alternative dimensions. These dimensions include business perspectives (customer, financial, process and development), measurement families (cost, productivity, quality) and measurement categories (direct, additive, composite). By overlaying these various dimensions, one can create a framework for building KPIs that succinctly captures the most critical business drivers.

The KPI Perspective Dimension

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