How to Build Meaningful KPI’s with SAP ByDesign

KPI’s can help monitor the performance for a company and is made up of various components, depending on your company’s analysis needs. Whether you configure your KPIs to track inventory, sales, profit, spend, pipeline, etc, a KPI scorecard will show you the metrics which are important to you. I recommend that you first start by mapping out the type of reports which are important to your business, before you use this tool. This will allow for the quickest and most efficient creation of your KPIs.

Mapping the KPI Settings to the KPI Scorecard

The KPI is made up 5 different components:

• The current state of the KPI
• Context report which shows the details of the KPI when expanded
• The Target Value
• The Reference Value
• Threshold values for alerts

The Current state of the KPI or Current Value setting (shown as 1), is the value which you will see in the KPI card when positioned on a dashboard. The second section (graph showing in 2), is the context report which appears when the KPI is expanded. This should align with the Current Value section, in that, it should be the most meaningful to the current state of the KPI. In the screenshot, the Current Value is focused on inventory, so the Context Report section broken down into the inventory values by product category.

Other items such as how many decimal points, a minus sign before a negative value and denomination display, can be set as part of the Value Setting section, shown here.

The Target Value of the KPI (shown as 1) can be either a static number or can be pulled from a report. This value does not need to be pulled from the same report. For example, your company may set budget values for inventory targets and you may choose to use this metric to guide your inventory activities.

The Reference Value is used to highlight if the KPI is improving or declining (shown as 2). Depending on your tolerance type (shown as 3), this impacts the KPI view of the Current numbers.

Understanding how to set your Warning point vs. your Alert point can be confusing. Here’s something you can use as a reference guide when you are setting up your thresholds.

Understanding how to set your Warning point vs. your Alert point can be confusing. Here’s something you can use as a reference guide when you are setting up your thresholds.

There are two different things that impact the report of the KPI: the color and the direction. The color shows how far/on point/above the value is from the target and the direction is the trend according to the goals you have set. So, if there’s a red arrow pointing downwards, this will show that something is wrong, and to investigate. In our example the grey arrow (shown in 3) indicates the trend is x and the red colour of the current value indicate it is too high above target. For more information about KPIs and business goals, check out http://thefinalstep.co.uk/ and their highly informative blog.

Takeaway Tips:

• Create the base report/views for your KPI’s as standalone reports – this keeps other administrators from changing your KPI metrics
• Create all your views before you start creating the KPI
• Be descriptive about your reports so other users understand comparisons
• Use Relative Selects on any dating variables

KPI’s can be complicated to setup but extremely valuable to the company for tracking. Planning things out is key here to ensure consistency and accuracy.

Laura is full of ideas and tips, when it comes to ByDesign. For more webinars such as this one, visit our website for other webinars we will be hosting the rest of this year. Register for your chance to learn more about ByDesign.