Civil Engineering Reference
In-Depth Information
The balanced scorecard includes a balance of objectives across the
'triple bottom line' agenda, and the operational KPIs are then used to
measure performance against the strategic aims. There are a number of
detailed operational measures, including the KPIs, and each is comprised
of the following components:
• measure - what is being measured (e.g. the ratio of delivery to cost)
• defi nition - a short description of what the measure captures (e.g. a
comparison of budget and outturn costs)
• metric - the unit of measurement to be used (e.g. the percentage
variance)
• objectives - the reason why the measure is being used (e.g. to monitor
the costs and ensure delivery to within budget)
• target - defi nes target to be achieved (e.g. one per cent below budget)
• owner - who is responsible for collecting, monitoring and reporting
the measure, (e.g. the cost controls team or site supervisory team)
• source material - identifi es from where the data is to be collected (e.g.
project cost reports)
• frequency of measure - how often data is collected and measured (e.g.
monthly)
• frequency for reporting - how often the measure is reported to relevant
stakeholders (e.g. monthly)
• enablers - what steps or actions are required to enable measurement
(e.g. agree budget, allocate responsible staff, scope of measure and
report)
• success criteria - defi ne the minimum satisfactory threshold and
above and the impact on the programme.
Together these elements ensure that the measures serve a practical
purpose. Using those elements and taking budget compliance as an
example, Table 3.1 shows how an operational measure is constructed.
The use of predefi ned KPI measures enables the programme manage-
ment team to monitor a number of areas, including performance, the
use of incentives and the effectiveness of supply chains. Performance
can be monitored and corrective action plans put in place before poor
performance impacts negatively on the wider programme. The KPI
measures can be used to develop incentive schemes, which both reward
good performance and punish weak output using a gain/pain mecha-
nism. The effectiveness of a supply chain can also be compared with
others. By using the same measures across a number of supply chains,
