I saw a discussion the other having a go about the fact that it is possible to create KPIs in a number of Microsoft tools and how confusing that can be and I thought it would be good to understand why there is a choice at all. 

Firstly the term KPI mans key performance indicator, I mention this because of the word “key”.  In any business there should be relatively few KPI, for example inside Microsoft we have 31 and despite pressure to increase them this has been the same for the last 5 years. These are set once a year and may be readjusted at the half year point so there isn’t too much work in creating them, but they need to be available across the business so they need to be on company intranet.

Each KPI is typically the responsibility of a manager and his team and to hit that number each division department will have its own dashboard and subordinate KPIs.  This hierarchy cascades down and down until each member of staff can identify their objectives with those KPIs.

Of course measuring performance is one thing achieving it another.  Even if things are going well there will always be the desire to improve things and to understand the underlying factors affecting successes and failures.  The type of tools used to create KPIs can be used for this and I would call these just PIs as they aren’t so key any more.

This is one of the reasons that there are several tools to crate indicators in the Microsoft BI platform:

SharePoint.

At the strategic end of the business where the ‘true’ KPIs are created these need to be widely available and so there is the dashboards, scorecards and tools to create KPIs embedded into SharePoint enterprise.  The data for these can come from pretty well any structured source  (I have yet to see a BI solution without at least one excel spreadsheet as a source), and not just from Microsoft products.

Excel

At the other end of the scale you can do quite a lot to create things that look like KPIs in Excel and if you are in a five man company this would be more than sufficient to keep your pulse on the business. 

Analysis Services

KPIs have been a feature of cubes since SQL Server 2005 and this is a very powerful feature that is rarely used. The value of putting them here is really good performance and that once they are created in a backend datastore they can be accessed from any toll, Microsoft or not that can connect to the cube. For you can import these KPIs directly into Dashboard designer and deploy them to SharePoint, and there are some 35 third party tools that work with analysis services if you don’t or can’t invest in SharePoint.

Reporting Services

Since SQL Server 2008 there are all sorts of traffic lights and gauges in reporting services.  This can  be a good option for sharing performance indicators with third parties; perhaps to show parents how a schools is performing or in a business to business scenario like suppliers and supermarkets.

However what makes anyone of these a true KPI is the data not the tool: if the number , trend and status in the traffic light, speed gauge, thermometer is key to your business then it’s a KPI. My only concern is that you use the right tool to make sure the right people can see the up to date status quickly and simply and that there backend systems in place to keep it up to date.