KPI Design as a Simulation Project

Design of key performance indicators (KPIs) is a repeated and challenging problem for organizations. KPIs are measured at the operational level, but are used to manage organizations at the strategic level. Strategic goals often change, and professionals with different backgrounds must understand and implement new KPIs that correspond to them. Nowadays, KPIs are designed and directly implemented on running organizations, which is disturbing to operational personnel. To avoid the disruption of business processes, we propose to design and test KPIs through simulation. After satisfactory experiments, a KPI can be implemented on the modelled organization.We have developed a conceptual reference model to organize KPI design simulation projects, showing what should be produced in a project. Our model has been built by the application of requirements engineering methods to the review of the literature of performance indicators. The model has been tested on several case studies. In this paper, we show two studies that demonstrate how unspecified concepts from our conceptual reference model damage reliability and improvement orientation of the designed indicators.