KPI the key performance indicators of the company or division. The number of KPIs may vary depending on the chosen strategy and is limited only by the imagination of the head of the company. But there are KPIs that are “universal” for any service unit.
How to choose performance indicators for the service?
For example, if the service in the company is considered only as an auxiliary unit, then it makes sense to set such key indicators as NPS (customer satisfaction index), response time to customer requests, service engineer’s departure time, customer resolution time for technical support and departure into place.
These KPIs can be set and taken into account both in terms of average indicators and more detailed: for example, the response time of technical support should be different depending on the category of client or depending on the client’s problem: equipment doesn’t work or work partly without any important client options.
If we are talking just about a request related to a usual usage of equipment (for example, performing maintenance), it is advisable to establish other time standards for the reaction time of technical support. It makes no sense to install the same KPI for urgent and for ordinary requests, because this will significantly overload the service, will require additional resources and costs.
How should KPI be like according to response time request?
For example, you define that in case of critical equipment breakdown, which entails stopping the production of the client, the application must be processed within 4 hours. It is clear that there are peak loadings of the service, but on average for 70-80% of applications this requirement must be met. For requests related to normal operation, the application processing time may be 3-4 days.
KPI for the departure time of the service engineer in case of an emergency stop of the equipment can be set, for example, as 2 days in 70% of cases. At the same time, during normal operation (maintenance, customer training, etc.), the departure time may be 4-5 days or more, by agreement with the customer.
KPI requirements are determined by market and market standards. It makes no sense to set the minimum time, if competitors solve the same tasks for weeks. To get the “wow effect,” your KPI must be 20–30% higher than competitors' standards at a comparable price.
Of course, if the company does not consider money for the service, then it is possible to recruit such a number of employees that will ensure 100% KPI implementation even during peak loads. But at the same time, some employees will simply not be involved. This affects costs, your marginal profit and, as a result, the price you can offer to the customer and the competitiveness of the company as a whole.
KPI service download
For an objective assessment of the service load and the optimal costs that your strategy suggests (the highest quality, the lowest price, or the average when targeting a specific market segment), you need to install KPI for the service load.
In foreign companies, this indicator is called Utilization and is defined as the ratio of productive hours / available hours. Available hours are the planned working hours for each employee taking into account vacations, holidays and weekends. You can take in a certain time interval, for example, a month. A productive clock is the time spent directly on solving customer problems. By productive hours do not include training (training) and the disease. You can independently assess the load of your service in the presence of statistics. It is best to take the statistics monthly for 2-3 years, then you can assess the effect of seasonality on the service.
Does your service work effectively?
But by themselves in the context of one company, these data are not sufficient. To understand how effectively your service works, you need to have an idea of the “normal” KPI values for service departments of other companies. Someone considers “normal” load at 45-50%, others 80-90%. Managers see only external manifestations: people work, when there is constant fuss, then everything is fine, no more loading is possible. Or vice versa, if everything is quiet and calm in the service, then people are not working, then they need to add tasks and reduce their salary costs. This is an extremely erroneous judgment. The fact is that there is a productive time - aimed directly at solving current tasks and unproductive, which, in fact, goes to preparatory work, is lost.
If the service KPIs are set correctly, then the work proceeds on the principle of a conveyor, without any fuss or noise, with a minimum percentage of unproductive time. If KPIs are installed incorrectly (or are absent altogether), then bottlenecks and overloads periodically appear in the chain of interaction between people and departments.
This can be seen as a car driving in a traffic jam: someone slowed down, everyone else slowed down after him. Then he overclocked, all the others overclocked. "Ragged" mode of operation leads to peak overload. This problem is often tried to be solved by taking on additional employees. But, first of all, these are additional expenses. Secondly, additional employees are more often taken by those who ask, and not by those who really need it.
As a result, nothing drastically changes, just in one department, employees drink tea with cookies, and in another they rush like stung, clutching at 10 projects at the same time and not having time to end up anywhere (here you need to understand that during overloads when people often have to switch from one task to another, up to 20% of the time is additionally spent on simply remembering the original and current data for each task, the so-called “learning curve”).
The problem is solved, first of all, by optimizing business processes and establishing “normal” KPIs for each functional unit from an individual employee to the division and the company as a whole. But this is a topic for a separate article.
There are other KPIs in addition to Utilization, which consider the processing of employees and work on the weekend. We will not dwell on them; this topic requires deep analysis. But it is important to understand that when planning any changes in a KPI company in terms of load, these are the most important indicators for planning the result you want to get.
Other important KPI services are turnover per employee, cost per hour, marginal profit rates, expenses for training, administration, etc. We will look at other articles on the development of first-class service as an important competitive advantage of the company.