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  1. 1. Nur Fatini Abdul Ghani – 2010647098 24/10/2011 1:31 AM www.kpizone.com CCI – Centre for Construction Innovation KPIzone was developed to help contractors measure their performance in a consistent way, to demonstrate their improvements in time, cost and quality and to understand how their performance compared to their peers.About KPIzone & the KPI EngineRethinking ConstructionThe Construction Industry KPIs emerged from Sir John Egans (1998) Rethinking ConstructionReport. The Construction Industry as a whole was in a poor state, with projects consistently failing tomeet client expectations, being delivered late and over-budget. Egan identified a number of drivers forchange, including better client leadership, supply chain integration and investment in the workforce.He set a number of ambitious targets against which this improvement should be measured, which westill recognise today as headline performance indicators, such as time and cost predictability.Constructing Excellences KPIzoneAs Constructing Excellence set about to promote the Rethinking Construction agenda, KPIzone wasdeveloped to help contractors measure their performance in a consistent way, to demonstrate theirimprovements in time, cost and quality and to understand how their performance compared to theirpeers.CCIs KPI EngineCCI set out to achieve similar goals with the KPI Engine. However,the KPI Engine has developed further to meet needs that have emerged over the past decade, suchas clients desire to measure contractors performance, to compare performance of contractors andconsultants on framework agreements and to drive continuous improvement within best practicebenchmarking clubs.
  2. 2. Nur Fatini Abdul Ghani – 2010647098 24/10/2011 1:31 AMWhere do the KPI come from?As you will see from the About page, the Construction Industry KPI originate in work originallyundertaken by Sir John Egan and the Movement for Innovation some ten years ago to measure thestate of the industry and monitor its improvement.They have been defined by industry leaders so that, by using these agreed definitions and methods ofmeasurement, anyone can compare their project or company performance with the industry as awhole.Where does the KPI benchmark data come from?The benchmark data is collected by Glenigan and Constructing Excellence under contract to BIS. It isdrawn from a number of sources, including a random sample of Construction projects across the UK.You can rest assured that benchmark data is a representative sample of data drawn fromconstructors, consultants and clients.What is a benchmark score?The KPIzone and the KPI Engine are benchmarking tools.They take your KPI score (such as a Client Satisfaction score of 8 out of 10) and compare it to thebenchmark data to generate a benchmark score, such as 62%. This would mean you are performingbetter than or equal to 62% of projects/companies. For this to be accurate, you must make sure yourKPI measurements are in line with the definitions and methodologies provided within the Zone or theEngine.What are the KPI?Over the years, the number of KPI has grown considerably. onstruction. There are also subsets, orsuites, of this data, reflecting, for example, New Build Housing, New Build Non-Housing, Respect forPeople, Environmental measures and so on. All the suites can be viewed by clicking on the Loginpage and using the Login demo and the password demo. Also, if you click on any of these suites,you will be shown an example of how the definitions, methods of measurement and data arepresented.
  3. 3. Nur Fatini Abdul Ghani – 2010647098 24/10/2011 1:31 AMThe CCI/Constructing Excellence on-line Benchmarking Tool allows you to benchmark your companyand project performance against the latest official Construction Industry National Benchmark Data.The 2011 data was collected and compiled by Constructing Excellence and Glenigan on behalf ofBIS (Department for Business, Innovation and Skills) from thousands of completed projects byconstruction clients, contractors, consultants and M&E specialists.
  4. 4. Nur Fatini Abdul Ghani – 2010647098 24/10/2011 1:31 AMGuide to Implementing Performance Measurement SystemsIntroductionPerformance measurement drives continuous improvement. It can  Focus improvement: identify areas of poor performance and help focus improvement in those areas.  Share best practice: identify areas of great performance which should be shared throughout your business.  Win work: benchmark your performance & evidence your competencies to help you win work.  Drive innovation: demonstrate you have a performance measurement system with the power to generate innovationBut when you are new to measurement, it can be hard to know whether the scores you are achievingare any good or not. How do you compare to the rest of the industry or your direct competitors?BenchmarkingUsing KPIzone and the KPI Engine you have comprehensive tools by which to measure yourself overtime and against competitiors. KPIzone provides unlimited access to the complete suite of KPI, SPI &API and can benchmark yourself on each and every one. By using the KPI Engine, you can easilybenchmark your business against the national average, and projects against each other or thenational dataset. Benchmarking provides a yardstick by which to judge your performance. The KPIEngine provides comprehensive support for collecting, reporting and analysing data. It is a web-basedtool that can be accessed from any web-enabled location without the need for software to be installed.The KPI Engine allows you to;  Identify your own suite of KPIs from over 580 different measures  Include bespoke KPIs  Report KPI scores easily in tables, graphs and action plans  Allows you to benchmark projects and the company against a range of data sets.Here are 7 Steps of Performance Measurement shown below: 1. Decide what to measure, 2. Collectdata, 3. Calculate KPIs, 4. Report the Results, 5. Analyse the Results, 6. Take Action and 7. MeasureAgain. Follow the quick links to the right for more information and comments from our clients.
  5. 5. Nur Fatini Abdul Ghani – 2010647098 24/10/2011 1:31 AMKPI ENGINEStep 1: Decide what to measureThe first hurdle a company must face is to decide exactly what to measure. There are many KPIsavailable and so you must be guided by your own company goals and project goals – your criticalsuccess factors – to ensure that the right KPIs are chosen in the first place.Examples of Critical Success Factors:  For companies facing a recruitment crisis, for example, a critical success factor could be staff retention (pengekalan / pembendungan);  On some projects a client can afford to go over-budget; the critical success factor here could be value for money.  At other times, it could be critical that the project is on-cost: the client may have budget constraints or the nature of the contract may mean that no extra money is available for the projectChoosing Key Performance Indicators:  If staff retention is critical to the business, measure and monitor Employee Satisfaction!  If the client demands VFM, measure Client Satisfaction!  If a project must be delivered on cost, monitor Cost Predictability!Other rules of thumb:  Select a suite of 8 to12 KPIs - any more than that and data collection and processing can be arduous and taking action, following benchmarking, can be a mammoth exercise.  Do not duplicate information flows that are already established and functioning well.  If you have not tried performance measurement before, select a mixture of company and project KPIs covering the three aspects of sustainability – economic success, social improvement and environmental performance. That is, unless you have a very high priority area that means you need to specialise in a particular area of performance measurement (e.g. environmental performance)Client commendation;Peter Schofield, Programme Manager, North East Improvement and Efficiency Partnership, “In myexperience, picking KPIs is really difficult. And it is even worse if you’ve got a number of organisationsround a table trying to agree a common set of measures. Because we’re working in the public sector,our KPIs need to reflect government priorities – in our case, sustainability and efficiency.”Step 2 : Collect DataMost of the data you will need already exists within your company and much of that will be found inmanagement accounts or project reports. However, where data needs to be collected, ensure youhave clear roles and responsibilities and consistent methods. For each KPI, designate who is going tocollect the data, when it is going to be collected (and in what form) and identify to whom theinformation gathered should be sent. Train people, if necessary, to ensure that they can do what youare asking of them and so that they know why they are doing it.
  6. 6. Nur Fatini Abdul Ghani – 2010647098 24/10/2011 1:31 AMIn some organisations, especially smaller businesses, performance measurement becomes the job ofone person (who is typically also responsible for H&S and, maybe, ISO 14001, but not at Directorlevel). It is very challenging for people in that role to collect data from other members of staff. Othersneed to be informed what they will be asked for and what will happen to the data they provide - it isimportant that they get feedback on the results so that they understand the process and feel part of it.High level company buy-in to the process is essential to encourage and lead the process.Client commendationJoanne James, Director of PLP Construction, “Getting performance measurement off the ground isreally difficult. Whilst people within the company can think it’s a good idea, it needs someone withclout to take ownership of it and make sure all the people who need to be involved actually do theirbit. This starts with getting everyone to agree which KPI should be used, includes ensuring thatpeople are made to collect the data and, most importantly, getting the Board or Management Team toreview the data regularly and take action accordingly.”Step 3 : Calculate PerformanceIndustry-standard KPIUse standard approaches where possible. By using industry-standard approaches, your KPIs will bemeasured, calculated and collated consistently over time and the results will be comparable with thenational data set. It is also far easier than developing your own KPI definitions and methods ofcalculation!KPIzoneThe full suite of industry-standard KPI can be viewed in the KPIzone section of this website. Differentsuites are available for Consultants, M&E Contractors and Product Manufacturers. There is aheadline economic suite with separate subsets of the data for New Build Housing, New Build Non-Housing, R&M and R Housing, R&M and R Non-Housing, Repairs – Housing, Voids Housing andInfrastructure. A suite of social KPIs called, Respect for People measures organisational elementssuch as Health & Safety and Equality & Diversity. The Environmental suite measures KPI such asMains Water Use, Waste and Impact on Environment.All Key (KPI), Secondary (SPI) and Additional (API) Performance Indicators can be accessed in theKPIzone. Each Performance Indicator includes a definition, description, method of measurement andin many cases, a calculator. There is also a graph showing the standard distribution of the nationalbenchmark data. The calculator will benchmark your KPI score against the national dataset for you.A licence for KPIzone costs £250 + VAT. Once your payment has been received, either online or byinvoice, your unique User ID and Login will be emailed to you immediately.
  7. 7. Nur Fatini Abdul Ghani – 2010647098 24/10/2011 1:31 AMThe KPI EngineThe KPI Engine has been developed over 6 years to help us support our partners in collecting,reporting and analysing data. It is a web-based tool that can be accessed from any web-enabledlocation without the need for software to be installed. The KPI Engine allows you to:  Identify your own suite of KPIs from over 580 different measures  Support the inclusion of bespoke KPIs  Report project and organisational scores benchmarked against the national average  Compare between projectsThe KPI Engine can be accessed from the tab above. Using the Login ID and password "demo", youcan update and report against the 10 headline KPIs for a single project. Instructions can bedownloaded from the Documents section of this website.Client commendationAndy Ward, Technical Director of Mansell Build, “At Mansell, weve found when youre doingperformance measurement, you want to be able to see quickly and easily whether you’re gettingbetter, getting worse and how you’re doing compared to your rivals. The KPI Engine enables you todo just that.”Step 4 : Report the ResultsIf you subscribe to the KPI Engine, you can easily create diagrams and charts to help present yourKPI results. But whether you use the KPI Engine or not, your performance should be shown in such away that everyone, including the company accountant and the operational staff, know what isimportant. Furthermore, it should be communicated throughout the company, but, in the first instance,to those managers who can react accordingly and those people involved in data collection andprocessing. Highlight anomalies in the data – good performance, bad performance and rogue results.Share data with the people who collected it and the people that it affects.You can download an example of a KPI report from the Documents section of this website. Itprovides great guidance in writing your own reports. But remember, the results must be reported to allthe relevant people.Client commendationMohammed Ahmad, Senior Project Manager, Liverpool Vision, “CCI provided the performancemeasurement services for Liverpool Vision, recently voted Constructing Excellence National Client ofthe Year 2008, on the their projects. The KPI reports were used to improve on the ethos of thepartnership of the framework agreements between Client and contractors. It was important to have anindependent third party to collect the data, crunch the numbers and report them back clearly. CCIprovided the required tool.
  8. 8. Nur Fatini Abdul Ghani – 2010647098 24/10/2011 1:31 AMStep 5 : Analyse the ResultsWhat is going well (and should be shared around the company)? Whats not going well (and needsremedial action)? Understanding your performance indicators is essential to having meaningful data.In the same way that your sales forecast can look great, but if it all hangs off one massive contract,your future is precarious and someone needs to have a handle on the truth behind the data. If yourperformance is relatively poor, is it because of something beyond your control or because there issomething you should to be doing better? It may be that you need someone, or a group of people, toinvestigate what the results mean. This is the basis of continuous improvement.Sometimes, the analysis is undertaken by a Director or a Manager responsible for ContinuousImprovement, Performance Measurement or Innovation. Other times, analysis is undertaken by themanagement team.Client commendationRob Lomax, Managing Director of Brookes Roofing Ltd, “At Brookes we have been measuring ourperformance via KPI’s for around four years. Initially the information was very much a bolt-on to ourmanagement meetings and was not really valued. This was primarily because we were reporting ontoo many KPI’s and were measuring the wrong things. Following a management meeting where welisted every possible thing that we could measure (in excess of sixty) we selected ten that would givethe best idea on how the company was performing. We then collated everyone’s top ten to form theten KPI’s which we measure our business on during our monthly meetings. Since carrying out thisexercise the information is valued and has helped indicate where we are having problems in thebusiness.”Step 6 : Take action!Take action: Generate valueThis is where the value is generated!Act upon your KPI dataOnce you understand why your KPI results are good or bad you need to do something about it.Monthly management meetings are a good place to review the results, establish actions and startimplementing them. Certainly someone, such as a KPI Champion, needs to take ownership of theprocess.Share good practiceWhere performance is really good this should be celebrated in newsletters and presentations. Betterstill, the knowledge of how to achieve this „best practice‟ should be shared about the company.Mentoring and staff exchange are a good way to achieve this. It is a wasted opportunity if you take-for-granted that you do something well – it should be publicised inside and outside of the companyand you should make sure that everyone knows how to do it.
  9. 9. Nur Fatini Abdul Ghani – 2010647098 24/10/2011 1:31 AMRemedy poor performanceWhere performance is falling below expectations, problem areas should be remedied. If you‟restruggling to do that, CCI have experience in facilitating workshops, particularly within supply chains,to iron-out problems. Click here for more info.Client commendationManaging Director of Birse Coastal, Phil Wright, “Measuring our performance has helped us tounderstand which parts of a project are doing better than others. The measures give a quantifiableway of benchmarking ourselves, which helps us to focus on getting everything up to the standard wewant.”
  10. 10. Nur Fatini Abdul Ghani – 2010647098 24/10/2011 1:31 AMStep 7 : Measure againContinuous improvementThe elite of clients and contractors are engaged in continuous improvement. This means that they donot just measure once, they measure repeatedly and regularly, either monthly, quarterly or at the endof every project. In fact, the true elite link KPI scores to profit so their contractors are rewarded fortheir performance and continued improvement. KPI scores are also used to monitor frameworkagreements. Even if you simply want to get a better handle on your company or your supply chain,you need to keep measuring to know whether you have been successful in sharing good practice andimproving on your own weaknesses.Client commendationDeputy Managing Director, Anthony Dillon of Willmott Dixon, “Constantly measuring our projectsmeans that we can continuously improve and demonstrate this to our clients.”