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An overview of KPI selection

November 18, 2020

Systems such as eTRACK+ collect and store a vast amount of information about your DSM portfolios. In fact, the amount of program operational data you can access is overwhelming, making the selection of Key Performance Indicators a daunting task. In choosing KPIs, several thoughts come to mind. First, they should address the business objectives. Second, they must be transparent and easily communicated. Last, they should be simple to access and update. Business objectives can be progress towards annual goals or more program specific such as turnaround time for rebate processing. KPIs should be geared towards the target audience; be it executive management or program administration staff. Whoever the audience, being able to simply look at a chart and understand where the department stands on a metric is important. If it takes an individual more than a few seconds to understand what the KPI means, that may not be the best metric. Finally, it should not take a significant amount of time to generate the KPI. In fact, automated processes would be preferred. In the past, I have seen a metric that might take a week or longer to update. This may not be the most effective use of department time and effort.

So how do we approach creating meaningful KPIs? One method is to start at the top and work your way down. For instance, what are your annual goals? It may be energy saved, carbon reduced, incentive dollars spent, customers served, a cost effectiveness metric or all the above. The KPI is not necessarily the same as the business objectives but is a measurement of progress towards them. If you select an annual metric as a potential KPI, consider dividing it into monthly or quarterly targets. This way you can account for seasonal variation in program activity. This top-level metric should match overall department objectives so that all stakeholders recognize the program or portfolio status. As you monitor these KPIs over time, you may be able to detect patterns that will assist in developing business strategies. It should be remembered though that KPIs are not static. Indicators need to be periodically reviewed and updated to reflect current business conditions.

eTRACK+ is not only capable of handling and managing your program data, but automatically generating up to the minute KPIs to give portfolio status and displaying them on an integrated AWS QuickSight dashboard. This ability is extremely helpful for program staff so that all your team members know exactly where programs stand against annual goals. KPIs can also be used at the program level to make day to day decisions on program operations. This next layer of indicators can be extremely useful to program management staff and program implementers. Next time I will be discussing establishing targeted KPIs at the program level to enhance tactical decision making and how eTRACK+ can support them.

Written by - Michael Stockard
Michael Stockard is an independent consultant at Stockard Energy Advising and is a member of the Advisory Panel at ANB Systems. Michael has over 39 years of experience in the design and implementation of demand-side management programs.

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