A template for designing key performance indicators.
The top part of the template allows you to identify:
- Strategic objective – this allows you to spell out which strategic objective this KPI relates to
- Key performance question – the business and performance question this KPI will help you to answer.
- Ownership - the ownership of the objective (the person(s) or function(s) responsible for delivering the strategic objective).
- Name - every indicator should be given a clear and descriptive name.
The KPI design template
Developing the KPI
Once the fundamentals are in place, the actual KPI can be developed using the following steps:
The data collection method
Describes the method or instrument used to assess the KPI.
Identifies what assessment, formula or scale are used to determine performance.
Targets and performance thresholds
Identify the desired level of performance in a specified timeframe (e.g., 5% increase of market share by the end of March next year).
Source of the data
Identifies where the data comes from.
Frequency of data collection
Identifies how often the data for that indicator should be collected.
Identifies the person, function, or external agency responsible for data collection and data updates.
Identifies how to report the performance indicator, identifying the:
- audience (including possible access restrictions),
- the reporting frequency, and
- reporting formats.
- Expiry/revision date – identifies how long the indicator is valid or when the indicator has to be revised.
- Estimated costs – estimates the costs involved in collecting the data and maintaining the measure.
- How good is this indicator? Assesses how well this indicator helps to answer the associated key performance question and identify possible limitations.
About the author
Bernard Marr is a leading performance management expert and business author.
The ICAEW Library & Information Service provides full text access to leading business, finance and management journals and a selection of key business and reference eBooks.
Further reading on KPIs is available through the resources below.
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- 16 Jan 2013 (12: 00 AM GMT)
- First published
- 04 Jul 2023 (12: 00 AM BST)
- Page updated with Latest research section, adding further reading related to KPIs. These new resources provide fresh insights, case studies and perspectives on this topic. Please note that the original article from 2013 has not undergone any review or updates.