As facilities management evolves, it's becoming more important than ever for facilities managers to prove their worth. At the same time, it's also becoming more difficult to define what success looks like. Key performance indicators (KPIs) give facilities managers a clear view of the targets they need to meet to help their organization succeed.
They compile data from multiple sources and make it transparent so facilities managers can see what's going well and where there is opportunity for improvement. Is your organization measuring the right KPIs—the ones that will ultimately lead to success?
Key performance indicators sound a lot like metrics, but they aren't the same thing. Metrics are single points of data, while key performance indicators often take several sets of data into account.
For instance, examples of facilities management metrics would include:
These metrics are valuable to measure, but they are typically just one part of a broader key performance indicators. They directly relate to SMART goals, which are specific, measurable, agreed upon by all key parties, realistic and time-sensitive. For facilities managers, KPIs might include:
Sometimes KPIs can be used as leading indicators.
In other words, once the KPI reaches a certain number, your organization may take a certain action—such as leasing a new property when space utilization reaches a certain percentage.
Many KPIs are lagging indicators, offering outcome information that can be valuable for planning. Whatever KPIs are defined, they should reflect organizational goals, should be relevant to its success, and should be measurable. Facilities management software can be a key partner in developing and tracking KPIs.
One reason KPIs are so important is that they take data from multiple "truth sources" and provide informative, actionable insights.
Your facilities management software, for example, may take in data from multiple departments and facility systems. If it has robust analytics and reporting capabilities, it can help you not only determine which KPIs are most relevant to your business goals, but can help you track them and track KPI trends and performance over time. Some facilities management software solutions even allow you to create custom dashboards so you can see the data points you want, organized how you want them.
Your company's KPIs can help you develop a balanced company "scorecard," or a matrix that indicates performance in multiple dimensions. A company's scorecard tracks KPIs from different points of view, such as financial, internal, external, and innovation. By using your facilities management software to help you develop and track KPIs, you can help the various stakeholders in your organization monitor your company scorecard from multiple perspectives, which can be tremendously helpful in the evaluation and planning processes. If your facilities management software has easy reporting capabilities, you can create periodic reports to distribute to key personnel to facilitate monitoring of various company scorecard measures and can even create reports on-demand should the need for them arise.
Key performance indicators can help bridge the gap between raw data and business strategy. When you use your facilities management software to develop and track KPIs, you're able to take numbers that may mean little out of context, and put them into a context that is useful for showing how well operations are in alignment with business goals. When it comes to fine-tuning business strategy, KPIs offer vital information that could be missed altogether in the absence of KPIs and the software necessary to develop and track them. The results of KPI tracking can include cost savings, improved revenues, or a stronger competitive edge.
One of the most important things KPIs do is start conversations. Simply having KPIs and knowing they are being tracked helps promote an attitude of more informed decision-making in an organization. The data contained in your KPI reports is often enough to get key personnel talking about what the KPIs measure, whether they need to be modified or fine-tuned, and what can be expected upon achievement of KPI-associated goals. The result is a more informed organization that has more relevant information with which to make critical business decisions.
As a facilities manager, your own KPIs can help you determine how to continually improve facilities management and create business value. By learning which analytics you should look at and how to relate them to overall business goals, you help make facilities management a key partner in achieving organizational goals, both short and long term.
Elizabeth Dukes' pieces highlight the valuable role of the real estate and facility managers play in their organizations. Prior to iOFFICE, Elizabeth was in sales for large facility and office service outsourcing firm.