You’re probably very familiar with key performance indicators (KPIs) and their role in measuring effective progress against business objectives. KPI orchestration, on the other hand, is the ability to coordinate, align, manage, and monitor KPIs across various teams and departments simultaneously.
KPIs, when used in strategy execution, ensure that initiatives are contributing to strong organizational performance – and that your strategy is heading in the right direction. Orchestrating KPIs, much like in the traditional, musical sense, is about bringing together different elements so they work in harmony. In IT environments, orchestration focuses on ensuring that various processes and systems are correctly organized and working together efficiently to meet a specific requirement.
Viewing KPIs across the organization as part of the bigger picture, in this case your strategy, means you can ensure that they are each supporting your organization’s goals. This also creates a framework for a holistic overview of progress, where you can gain insight and understanding into how individual metrics influence each other, where there are gaps in performance, and how each team’s efforts affect strategic outcomes.
In strategy planning and execution, it’s highly likely you will have a number of KPIs to manage – especially as organizational strategy can be complex. Orchestration will allow you to improve your operational efficiency by ensuring that KPIs are appropriately aligned to strategic goals. You will additionally have the opportunity to streamline KPIs, removing priority from those that don’t add value, and reduce the likelihood of them detracting focus from your strategy. This means you will be tracking the metrics that matter: those that connect to what you’re trying to achieve.
Once you understand that KPIs (across the entire organization) are all part of an intricately woven web – and this mentality is shared with various teams – not only will you improve the visibility of KPI performance, but also be able to better coordinate progress and align on targets and goal setting.
Orchestrating KPIs can be done in whatever way you feel is best for your organization and will depend on the number of KPIs in scope. There are various technology options available to support you in KPI orchestration that will give you access to dashboards and reporting software to simplify this process.
Successfully orchestrating KPIs can bring various strategic and operational benefits.
Visibility of KPI and organizational performance is, in our opinion, the biggest benefit of KPI orchestration. When KPIs are centralized, this simplifies the process of monitoring KPI performance and removes data siloes that can occur when managed by a single department or person. Having this central view means strategy leaders can quickly see which areas are performing well and which need additional attention.
This leads to improved data-driven decision making, as it will be easier to decipher how KPIs are interacting with each other (i.e., are the KPIs complementary, or are they impeding progress). KPIs that are monitored in real-time also enable decision-makers to act quickly when progress seems to stall or diminish, which is particularly helpful when market conditions are rapidly evolving. Improved visibility of performance can also support resource allocation as, when you understand how KPIs are working together, you will be better positioned to increase or decrease resources in a particular area depending on current performance.
Performance visibility is one of the bigger benefits of KPI orchestration, but actually enables you to experience additional advantages.
KPI orchestration ensures that each department or team is measuring their progress in a way that can be translated to your overarching strategy. Demonstrating the connection between KPIs and strategy-based activities will reduce the risk of internal conflicts around priorities, ensuring that efforts across the organization are all heading in the same direction.
Once KPIs have been linked to strategic objectives and initiatives, there will be a greater sense of accountability for an individual’s role in strategic performance as they can clearly see how their efforts influence and contribute to outcomes. This can also offer a sense of autonomy to individuals as they will know which initiatives form part of the bigger picture, rather than applying the majority of their focus to isolated efforts.
Continuous improvement efforts – usually grounded in lean and OpEx methodology – can also be supported through KPI orchestration. Thanks to the structure involved in KPI orchestration, this will provide you with a standardized method for measuring progress in other areas of your business. Regular reviews of KPI performance helps to identify trends and inefficiencies which you can refine when needed which, when combined with improved performance visibility, also strengthens strategic alignment.
There are also occasional challenges that organizations can experience when orchestrating their KPIs.
Typically, different teams each use different systems and software to track their own projects, meaning data that could be useful in KPI orchestration (or wider strategy discussions) is only visible to that specific team. Data siloes can add complexity when orchestrating KPIs as you will need to uncover all of this information before it is integrated into a centralized system. Bringing all this data together can also introduce technical and resource considerations, but will support in keeping data consistent and reliable.
When searching for internal KPIs to orchestrate, you might find there’s multiple that weren’t fully informed when they were created. Success metrics might be unclear, they could be difficult to measure, or they simply aren’t connected to organizational goals meaning they fail to deliver meaningful improvements. This means some pre-existing KPIs might need to be reformulated so they add value to contributions. Alternatively, there could be too many KPIs which weakens alignment on which projects are priority. Having too many KPIs combined with KPIs that weren’t fully considered can weaken overall strategic alignment.
KPI orchestration works best when there is strong owner- and leadership of the project, and internal buy-in. Individuals must understand why orchestrating KPIs is the right move for your organization and how this will contribute to strategic success. Without support, whether that’s training on new systems or a clear explanation about the benefit of the project, teams might be slow to adopt this new way of working with their KPIs.