Completion of the key performance indicator (KPI) rationalization and definition phases allows us to focus on the next important step in KPI development - setting KPI targets and threshold levels. This first column will discuss how special and common causes contribute to process variation which, subsequently, impacts KPI metrics.
Once KPIs have been identified, defined and formulized, you may feel that the KPI battle is won. Please be advised that the arbitrary and inappropriate selection of KPI targets and thresholds can still doom a BPM implementation. When targets are set badly, people tend to achieve them by gaming on the numbers to ensure compliance and the associated bonus compensation. Gaming can be as subtle as setting easily achievable results or as blatant as definition reinterpretation. Where possible, KPI targets must be based on concrete data and non-manipulative formulas supported by a closed-loop data sourcing system.
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