KPI
Key Performance Indicators (KPI) from financial or nonfinancial metrics are used in business intelligence to assess the present state of business and to prescribe course of action.
Conditions The key conditions for successful use of KPI are: Having a Process Having clear goals / performance requirements of the process Having a quantitative / qualitative measurement of the results and comparison with set goals Investigating variances and tweaking processes or resources to achieve long-term goals
Areas to be analyzed
Some of the areas which top management analyses are: Customer related numbers:# New Customers Acquired#Status of existing customers#Attrition of Customers Turnover generated by segments of the Customers - these could be demographic filters. Outstanding balances held by segments of customers and terms of payment - these could be demographic filters. Collection of bad debts within Customer relationships. Demographic analysis of Individuals (potential customers) applying to become customers, and the levels of approval, rejections and pending numbers. Delinquency analysis of customers behind on payments. Profitability of customers by demographic segments and segmentation of customers by profitability. This is more an inclusive list than an exclusive one. The above more or less describes what a bank would do, but could also refer to a Telephone company or similar service sector company. What is important is: KPI-related data which is consistent and correct. Timely availability of KPI related Data.
More and more organisations are moving towards faster availability of data. Previously data usually was available only after a month or two, which might not be the best idea if you want to hit Wall street targets. Of late, several banks have tried to move from availability of data at shorter intervals and lesser delays. For Example, in businesses which have higher operational/credit risk loading (e.g.: Credit cards, Wealth management), Citibank has moved onto a weekly availability of KPI related data or sometimes a daily analysis of numbers. This means that data should usually be available within 24 hours at most times, necessicitating automation and the use of IT systems to achieve this.
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