Question

develop a set of added measures of performance (KPIs) and a set of added measures of performance for either asset impairment or revenue recognition. These KPIs may be based on data not commonly included in financial reporting, may be drawn from either quantitative or qualitative data, and may focus on either diagnostic or predictive analytics.

Answer 1

We can develop a set of added measure of performance from following 5 steps, which will help you how to set KPI-

Step1- you have to understand what a KPI or performance measure is , and what is not:-

To know what is KPI or performance measure we have to know the clear concept of KPI,. Keeping mind many people consider employee productivity as KPI which is not a performance measure of KPI, because it is not clear, quantitative.

Step2- Evaluate your existing KPIs and performance measures to decide what to keep and what to cull:-

If you can't develop KPIs and performance measures, it doesn't mean that all have to cull, some may perform later or may help to evaluate existing KPIs after that you can keep good one and cull bad one.

Step3:-Make measurable goals before you develop performance measures:-

Before you develop performance measures you have to make sure that goals are measurable otherwise it leads us down rabit-hole as we rush to quick fix KPIs. Valuable performance measures stars with measurable goals. Which indicates that your goals need to be worded clearly enough and specifically enough so that you can imagine how you'll recognise when it becomes real.

Step4:-Use deliberate technique to set KPIs instead of brainstorming:-

Brainstorming is not much effective to apply in business. Maximum meeting uses brainstorming event now a days. But there's one meeting where we have to leave it off the agenda: the meeting to develop performance measures.

Brainstorming generate very lame KPIs. So quit setting KPIs by brainstorming. Ypu need to be more deliberate, to develop performance measures rhat are most relevant and feasible evidence of your goal.

Step5:-Work with buy -in among the people who you need to support thr KPIs:-

If KPIs are developed by very small teama or consultants, in private meetings then this will be ignored none will buy in to something they don't understand and ll not find any relevance in.build buy in , not sign off because it won't work either.

Following are some method to make sure you work buy in from the start:

• Use a measures team consists of people who know the function and process, or have knowledge of area you want to measure.

•Document your thinking as you design the KPIs, so that all can understand easily

•create an open soace for people to see, explore, discuss and give feedback on the draft KPI work.