Outcome based Services

More practical advice on setting effective Service KPI’s

We had such a great response to our article  Driving success in service operations through leading indicators: 7 key messages , that Si2 Partners Dag Gronevik  and Nick Frank  got together with Kris Oldland from Field Service News to explore the topic further. You can listen to a brief sample of the discussion or download the full podcast through this link to Field Service News – The importance of kpi’s.

If you are interested in continuing the conversation, we are organising a private webinar for interested practitioners to have an open discussion on the topic. This is an opportunity to share ideas on the content of the articles with non-competing companies in a small forum of 5-10 people. If you would like to participate, please use this link to the Si2Partners contact page to register your interest.

Coincidently Andy Neely, Director of the Cambridge Service Alliance, just released a webinar titled Enterprise KPIs – Aligning Metrics Across Complex Service Networks .  The webinar looks at the specific challenge of complex service contracts, where  a number of stakeholders/partners work together, pooling their skills resources and capabilities to deliver a complex outcome. The challenge this poses is how to measure the performance of the network of organisations involved in delivering the service. If every organisation seeks to perform against their own internal key performance indicators (KPIs) there’s a danger of conflict and tension.

Although this webinar deals with highly complex services of the type found in defence and infrastructure projects, the methodology he describes is a useful benchmark for any manager looking at KPI’s.  For example he defines a 5 step process for KPI implementation:

  1. Start-Up: Essentially define the scope of the business, clearly identifying the boundaries
  2. Survey: Capture the perspectives on value of the various stakeholders
  3. Success Mapping: Build a shared view of what success looks like, what are the key drivers of success, and relationship between these drivers
  4. Measures Identification: Identify what is already measured, what really needs to be measured, and define the measures against a best practice template
  5. Execution: Trial, change management, dashboard design and cadence

A benchmark template for KPI’s was also reviewed:

  • Measure Name
  • Purpose
  • What the measure relates to
  • The Target
  • Formula for calculation
  • Frequency of reporting
  • Who measures
  • Source of the data
  • Who acts on the measure
  • What do they do with the measure
  • Are there any incentives or penalties around the measure

He also describes some of the critical success factors in developing measures such as the:

  • Importance of a strong sponsor
  • Use of a cross functional team to gain a good perspective on the measures and their use
  • Mind-set of participants should be aligned. The better the alignment the more likely you are to have success.

All in all I would also recommend  viewing this very insightful webinar. 

Nick Frank is Managing Partner at Si2 Partners, a consultancy helping clients leverage services to win in industrial markets.

Further articles on this and other topics can be found in the Si2 Partners Resources Page and the Si2 Knowledge Center

If you are a Service professional (manager, practitioner, consultant or academic) in an industrial setting join our group Service in Industry on Linkedin

1 reply »

  1. Note that in the US, there is a legal company structure of Limited Liability Corporation [LLC] in which all the stakeholders of a complex service can be stakeholders in the LLC. All stakeholders can agree upon a common set of KPIs. The key point is that all the profitability of the service is distributed to all the stakeholders based upon their share of the LLC; all stakeholders then have a self-interest in the performance success of the services.

    Lots of issues to address in the above, but I have created LLCs to deliver complex services. It is often like herding cats, but once all are in agreement, it can work very well. A LLC is different than a Joint Venture [JV] corporation; profitability is treated quite differently, and thus incentive cues are not the same.

    Like

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