In brief, the KPI Audit process follows the 5 steps listed below:
The Process - Explained
Review of organizational vision, mission and strategic goals and extraction of Critical Success Factors (CSFs)
In Step 1, Meirc will focus on reviewing the organization’s strategy documents and then meet with the stakeholders accountable for the organization’s performance. The purpose of the review and the meetings which follow, is to determine the organizational Critical Success Factors.
Sorting of CSFs into Key Performance Areas (KPAs), core competencies and core values
In Step 2, Meirc will sort the CSFs into three categories, namely Key Performance Areas, core competencies and core values. The KPAs identified in this step, which ideally should not exceed 8 in number, will then be labelled the ‘musts’ and will form the basis and the starting point for the KPI audit.
Gap analysis of KPAs and 1st level scan of strategic KPIs
In Step 3, Meirc will contrast the identified KPAs (musts) with the existing ones (actuals) and highlight the areas where there are gaps or non-conformities. This is followed by a first level scan of the existing KPIs to determine their level of criticality and alignment (with the musts).
Deep dive into existing KPIs and 2nd level audit
In Step 4, Meirc will review each organizational indicator by subjecting it to a multi-point checklist (see illustration), the details of which are captured in a neatly summarized template called the ID Card (see next section). The purpose from this step is to thoroughly evaluate the robustness of each KPI against best practice criteria and to determine its reliability and validity from various perspectives. KPIs that pass the audit will be maintained and those that do not, will be highlighted so that they can either be replaced or rewritten.
Finalization of KPIs followed by categorization and production of KPI indexes where applicable
In Step 5, Meirc will conduct a final scan of the approved KPIs, categorize them using mutually agreed upon criteria, and provide recommendations on using indexes that could simplify tracking and reporting, or help produce performance dashboards or scorecards.