Ariba Knowledge Nuggets: KPI's - Key Performance Indicators


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Ariba Knowledge Nuggets: KPI's - Key Performance Indicators

  1. 1. Ariba Knowledge NuggetsSuccess for $1000.00, please! What is a KPI or Key Performance Indicator?Key performance indicators (KPI) are high-level snapshots of a business or organization based onspecific predefined measures. KPIs typically consist of any combination of reports, spreadsheets, orcharts. They may include global or regional sales figures and trends over time, personnel stats andtrends, real-time supply chain information, or anything else that is deemed critical to a corporationssuccess.The key indicators are agreed upon by an organization and are indicators which can be measuredthat will reflect success factors. The KPIs selected must reflect the organizations goals, they mustbe key to its success, and they must be measurable. Key performance indicators usually are long-term considerations for an organization. For KPI’s to be most effective, follow these suggestions: • KPI must be actionable • Measure against a goal or best practice • Monitor frequently so that issues can be identified and corrected quickly • Assign to an owner.
  2. 2. Why Measure?During times of economic uncertainty, it is acompetitive necessity to ensure marketeffectiveness and business efficiency. This requiresthe continuous improvement of operationalperformance across all key business processes andvalue streams. Before improvements can be made,all decision makers need a comprehensiveunderstanding of current performance as well asthe leverage points that can be used to positivelyimpact future performance.By definition, KPI metrics measure aspects of thebusiness process or value stream that directlyaffect results or outcomes. If KPIs are actionableand monitored in a timely‐enough manner, they can be used to make operational decisions anddrive actions that can positively impact business outcomes in the current reporting period.Spend Visibility Metrics User Related Ariba Spend Visibility # of trained users is your first step toward # of addressees on scheduled reports identifying and eliminating Spend Related maverick spending, fraud, % Spend Coverage and other noncompliance factors. Complete, accurate, Data Processing Related and continually up-to-date Timely upload of new spend data spend records help you # of quality feedback issues submitted launch and maintain Timely validation of enriched spend data compliance initiatives with Timely validation of uploaded raw data both internal and external % of Enrichment parties. Dashboards and % of Targeted Data Sources covered reports keep all stakeholders informed Output Related about contracts and # of reports created progress toward # of Dashboard templates (role related) strengthening # of reports run the bottom line. # of sourcing opportunities uncovered
  3. 3. With Ariba Sourcing, you Sourcing Metrics can make smarter sourcing User Related decisions and drive better # of Active Suppliers results. Manage supply volatility and capacity # of registered Supplier constraints. Minimize # of registered Buyers supply risk with better # of trained users supplier visibility. And build # active users your sourcing pipeline with Project Related tools that achieve early ROI # of new projects per month and long-term cost savings. # of projects (cumulative) Ariba Sourcing is embedded with best # of Sourcing Projects per month practices to give your team # of events per month per Type an edge. Intuitive wizards Spend Related guide users through project # of Categories Sourced creation. Built-in tools and Spend volume processed per month intelligence facilitate Spend volume cumulative collaboration and Process Related negotiation. Advanced workflow and approval # of Sourcing Process Templates routing streamline project # of custom RFx Templates management and # of category specific items (cost breakdown tem- compliance initiatives. plates)Once you have good Key Performance Indicators defined,ones that reflect your organizations goals, one that you canmeasure, what do you do with them?You use Key Performance Indicators as a performancemanagement tool, but also as a carrot. KPIs give everyone in theorganization a clear picture of what is important, of what theyneed to make happen. You use that to manage performance.You make sure that everything the people in your organizationdo is focused on meeting or exceeding those Key PerformanceIndicators. You also use the KPIs as a carrot. Post the KPIseverywhere: in the lunch room, on the walls of every conferenceroom, on the company intranet, even on the company web sitefor some of them. Show what the target for each KPI is andshow the progress toward that target for each of them.People will be motivated to reach those KPI targets.
  4. 4. P2P Metrics Ariba P2P is the only SaaS solution Process Efficiency Related that offers world-wide visibility and Cost per Invoice complete control to manage both FTE per Billion $ direct and indirect spend, for all # Invoices per FTE goods and services. Optimizing services procurement is one of the PO utilization quickest ways you can deliver more Processing cycle time (hours) savings to the bottom line. Along with On time payment rates goods, Ariba customers save on Process Effectiveness Related services like contingent labor, First Pass match rate consulting, print, creative, legal, # Invoices rejected direct mail, ATM installations, and more. From source to settle, you can % Contract compliance manage it all with an automated and % of suppliers representing 80% of Spend integrated user-friendly system. Standardization of payment terms Contract Management Metrics User RelatedIts the paper that blocks your view. It # trained userscan be created in countless ways and # active users filed in a myriad of places. But when # of registered users per user group you make the move to electronic # active users per Ariba User Groupcontracts, every contract is housed in Project Relateda centralized repository and retrieved # new contracts per month on demand with powerful search # of contracts (cumulative) tools. Integrated collaboration,negotiation, and execution tools keep Spend Related you posted as the agreement takes % of spend under contract shape and becomes finalized. And # contracts versus # suppliers with expiration dates and other # evergreen contractsmilestone events easily flagged, youll average contract duration stay alert to renewals and avoid Process Related supply chain interruptions. # clauses in the library # contract templates # approval tasks completed per month