Key Performance Indicators

An Introduction to Benchmarking and KPIs

What is benchmarking?
How do we compare?
Who is better?
Why are they better?
What is a benchmark?
The best performance achieved
Used as a reference
Enables target setting
A Marketing Tool
Why benchmark?
Proof that you compare well with industry leaders
Alignment to Rethinking Construction Agenda
Increased customer satisfaction
Establish goals and objectives
Measures true productivity
Identify best practice
Types of benchmark
Internal
A comparison of internal operations eg job vs job, region vs region, sector vs sector
Pros: Easy to do, likely to produce gradual improvement
Cons: Unlikely to produce real innovation. Perceived as non-credible data.
Competitive
A comparison against a specific competitor for specific product or service
Pros: Likely to lead to specific innovations
Cons: Difficult to obtain information
Generic
A comparison of business functions against the industry
Pros: Likely to lead to innovations
Cons: Difficult to do if data doesn’t exist
What is a KPI
A measure critical for success
Construction KPIs allow comparison with industry norms
First published 1999
The first 10 industry KPIS
Client satisfaction – product
Client satisfaction – service
Defects
Predictability – cost
Predictability – time
Construction Cost
Construction Time
Profitability
Productivity
Safety

How do these work?
Performance against each KPI is compared against graphs showing industry norms. A benchmark score of 50% indicates that your performance is better than that of 50% of the industry

An example - Predictability Construction time
Estimated construction time = 90 weeks
Actual construction time = 80 weeks
Actual time – estimated time x 100 = percentage actual against predicted time
Once you have completed your benchmarking you should ask yourself the following questions
How do we compare to others?
Why are our results different?
Do we need to improve?
By how much?
KPIs are a starting point
Without credible data they are worthless baloney.
KPIs, badly done, are potentially dangerous.
Remember the KPIs themselves are only the starting point.
KPIs are a tool for continuous improvement

Key Performance Indicator Management Tool
The KPI Management Tool is an on-line facility that allows you to measure and manage your company and project KPIs. It is an easy to use interface that allows you to quickly input data against your KPIs and quickly generate reports and radar diagrams using the latest DTI KPI Benchmark data. Note – the franchise for this provision is currently under review with a decision expected shortly – we will advise you further as soon as details area available.
A final thought
Use KPIs Intelligently:

“KPIs are a means of dialogue between the client and the supply chain. They should not be used blindly or without question, and are only one source of data. Remember the key question for clients to ask is ‘How are you using KPIs?’ not ‘What are your scores?’ But if a client is determined to use the numbers per se, it is recommended that clients should treat unaudited KPI data with the same healthy scepticism as they would treat information volunteered by a potential supplier on any other matter”

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