Create a KPI

You can use the Create a KPI wizard in PerformancePoint Dashboard Designer to create a key performance indicator (KPI).

A KPI is a business metric that represents an aspect of organizational performance. A scorecard is just a collection of KPIs that the scorecard designer selects to depict a particular organizational goal; each KPI in the scorecard depicts a critical element of that goal. For example, if the performance goal is to increase production in a manufacturing operation, an important KPI might be the number of units produced per hour.

When carefully designed, a collection of KPIs in a scorecard can depict performance scores and provide a snapshot of organizational strategy. In addition, because the people who work in an organization strive to improve KPI scores, KPIs can help inspire changes in organizational behavior.

What do you want to do?

KPIs and metrics

What a KPI score indicates

Create a new KPI by using the wizard

Next steps

KPIs and metrics

A metric is a numeric measurement that represents a piece of business data in relationship to one or more dimensions, such as gross sales by week. In this case, the measurement represents data in dollars (gross sales) in relationship to the dimension of time (by week).

A KPI is just a metric that is tied to a target. Typically, a KPI represents how far a metric is above or below its pre-determined target. KPI scores often appear as the ratio of actual value to target value. The KPI score and its indicator are designed to let a business user know at a glance if results are on target or off target, without requiring calculations. For instance, you might decide that to hit your quarterly sales target, your organization must sell $10,000 in widgets per week. The KPI metric would be widget sales per week; the target would be $10,000. If you used a graphical gauge indicator to represent this KPI in percentage values, and the company sold $8,000 in widgets by Wednesday, the user would see at a glance that sales had reached 80% of the goal.

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What a KPI score indicates

Typically, a KPI score compares actual performance to a target value. For example, different organizations might specify targets for the following areas:

  • Customer service     A customer service group wants to improve its response rate for service requests. One KPI might represent the total number of customer service requests per day. A different KPI in the same scorecard might represent the number of minutes required per request.

  • Online retail catalog store    A sales unit wants to increase revenue from sales in the European Union and South America by 5%. A KPI might report on the total sales of a particular product or the total sales of all products by country/region.

  • Human resources    A human resources organization wants to decrease the number of workdays lost to illness by 10%. One KPI can track the number of lost workdays, and another might report on employee participation in on-site health care offerings.

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Create a new KPI by using the wizard

To create a new KPI in Dashboard Designer, take the following steps:

  1. Click the Create tab, and then click KPI.

  2. In the Select a KPI Template dialog box, click the icon for the type of KPI that you want to create.

    About types of KPI templates

    In the Select a KPI Template dialog box, you can select one of the following.

    • Blank KPI template – This template does not include any predefined values. When you create a KPI by using this template, you must define all the characteristics of the KPI. To learn about how to define KPI characteristics, see the KPI configuration overview.

    • Objective KPI template – When you create a KPI by using this template, Dashboard Designer creates a KPI that states a performance goal or objective, but does not have an associated performance score. This type of KPI works well as a heading for a group of other KPIs.

      To create an objective KPI that states a performance goal and also has an associated performance score, create the KPI by using the Blank KPI template. Then, when you configure the KPI calculation settings, select the Normalized, weighted average of scores for child KPIs. To learn how to configure calculation settings, see the KPI configuration overview.

  3. Click OK to save your choice and close the Select a KPI Template dialog box.

  4. In the Create a KPI dialog box, type a name for the KPI. Then, optionally, specify a new location for the default display folder. When you are finished, click Finish to close the dialog box and view the Actual and Targets pane.

    Note: If desired, select the Grant read permission to all authenticated users check box. If you do not check this box, you must configure reader permissions manually in the KPI properties tab. Otherwise, no users will be able to view or use the KPI that you create. To learn how to configure reader permissions, see the KPI configuration overview.

  5. To save the KPI to PerformancePoint Monitoring Server and make it available to other scorecard designers, click Publish All on the Home tab.

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Next steps

Click the link that best matches your next task, or matches your overall task

KPI configuration overview

Create a scorecard hierarchy, or change KPI position in a hierarchy

See all the steps that are required to build a scorecard

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