Business Process Library Q Business Process Management

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KGI(Key Goal Indicator) is an indicator used to decide whether a company's strategic goal is achieved or not, and it is usually presented as a target value. In Japanese, it is translated into Important Goal Achievement Indicator.

Contents

Overview

KGI is an indicator to measure the degree of goal accomplishment. For instance, an indicator to define the accomplishment of a goal, such as "by how may percent" for an abstract goal, "increasing sales," is KGI. By defining "accomplishment" with specific indicators and target values, we can evaluate the actual degree of accomplishment of strategic goals. Based on such evaluation, we can conduct improvements and management.

To define KGI, we must analyze the current status of business (As-is) and determine the ideal status (To-be).

  1. Extract problems through As-is analysis
  2. Determine To-be
  3. Derive KGI from To-be

KGI must be able to accurately present the degree of accomplishment of To-be.

Relationship among KGI, CSF, and KPI

KPI and CSF are the relative terms to KGI, and understanding the relation among them helps understand KGI more deeply.

  • KGI: An indicator to measure the degree of goal accomplishment. KGI defines specific goals and the metrics for them.
  • CSF: A factor that significantly affects the accomplishment of KGI. CSF clarifies items for which we should intensively allocate resources.
  • KPI: An indicator used to see whether CSF is in desired condition or not. KPI defines a quantitative index.

Clarifying these three enables us to determine concrete actions necessary to accomplish goals as well as monitor them. Although both of KGI and KPI are effective tools to grasp the status of administration, the latter is an indicator to grasp the status on the way while the former is an indicator to decide whether the ultimate goal is achieved or not.

How to Utilize Management Indices in BPM

PDCA Cycle

PDCA refers to the methodology and way of thinking with regard to all activities by individuals and organizations in the sequences of:

  • Plan
  • Do
  • Check
  • Act

Which are repeated continuously. Nowadays, PDCA is introduced in a variety of management activities and has become the central point in the business process management.

To effectively execute BPM, we should use KGI, CSF, and KPI in each step of PDCA Cycle.

Measurement Indices in "Plan Step" in PDCA Cycle

KGI needs to be defined when Business Process is designed. By defining KGI, we can evaluate processes.

Measurement Indices in "Check (BAM) Step" in PDCA Cycle

For the sake of effective monitoring, use of KPI is recommended. KPI is defined based on CSF, which is derived from KGI. In addition, BSC defines KGI from multiple perspectives. The typical perspectives include:

  • Financial perspective
  • Customer perspective
  • Process perspective
  • Learning perspective

In BPM, by defining KGI per business process, we can judge to what extent the corresponding process is optimized to accomplish the goals. The results of business executed in an optimized process will significantly contribute to the accomplishment of target KGI values in customer and financial perspectives.

Example

As a concrete example, let's think about "Draft Creation Process."

In Draft Creation Process described above, depending on possible goals such as:

  • Create many articles
  • Create articles of high-quality

we can define KGIs as shown below, for example.

  • Number of completed articles: X articles / day
  • Lead time: X days / article
  • Featured article certification in review

After KGIs are defined, CSFs, which are factors that affect the accomplishment of KGIs, are extracted.

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