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Centralising data for Key Performance Indicators

There is a pretty good case to centralise the data collection, streamlining what could amount to endless metrics from ERPs.  But is it the best way to go?

Having easy and ready access to all data has it’s pitfalls.  Firstly, you could be limited to only the data an ERP provides, which will largely be financial based.  Consideration of “Key” metrics quite often are outside the scope of financial systems. 

Secondly, the shear volume of data that ERPs provide limits the level of critical thinking that needs to surround the word “Key” in selecting your KPIs.  It is not uncommon for copious metrics to be reported simply due to easy accessibility of data.  Maximum data looks great report wise but for quick decision making, minimal KPIs that can be monitored and actioned in real time provide a  more workable solution.

ERP KPI reporting can be an easy out for the many responsible for reporting operational performance.  However. the KEY to Key Performance Indicators is the critical thinking, the cause and effect, and the identification of the driving nature of a desired outcome.  If you have large numbers of KPIs, it’s probably a good sign the you have chosen to collect “easy” data or haven’t quite thought hard enough about what is “Key” to your desired result.

Avoid the simplicity of the ERP connection.  A pretty good argument exists to bypass any use of ERP systems.  The ease of access can negate the in-depth thought processes required to limit KPIs to what is really “key”.  Further, by actualising what is in fact “key” will ensure data acquisition will be simpler and more meaningful.  With meaningful, limited KPIs it’s simpler to assign data collection to those that are accountable for the metrics without the burden of chasing voluminous data. 

A handful of KPIs per designated person will allow increased awareness and accountability.  Ownership of the production and reporting of those KPIs should avail a greater understanding of the drivers and outcomes of the monitored process.  All in all a better business outcome.

Related Article: How to use bar charts in your KPI Dashboard



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