In order to answer the question :Why KPQs is important for developing KPIs. This essay gives a comprehensive study over the two concepts:KPQs and KPIs. Then make some analysis of KPQs and KPIs show that KPQs is really significant to establish KPIs .
Firstly, this essay will give a general overview of KPQs and KPIs, and the second part is describing the reasons why KPQs is a necessary step when establishing KPIs. Thirdly it will take an example of The Scottish Intellectual Assets Centre to describe KPQs are significant for establishing key performance indicators. Finally, this essay will put some recommendation for asking the right questions and a conclusion of "Why is it important to identify key performance questions (KPQs) before developing key performance indicators (KPIs)?"
2 What are KPIs and KPQs
2.1 The Key Performance Indicators
The key performance indicators are an industry term for the type of performance measurement. The Key Performance Indicators, also known as the KPIs, help an organization to define the organizational goals and measure progress toward the targets. When the company analysis its organization tasks, to make clear of all its stakeholders, and determined its goals, it always needs a methodology to measure progress. So those measurements are Key Performance Indicators.
Another definition of the KPIs is from the textbook of Parker. (2012): "KPIs are often used to identify significant parts of service activities and measure performance against target."
2.2 The Key Performance Questions
Key Performance Questions, also known as KPQs, is a new concept in the field of corporate performance management(Marr et al., 2010a). A key performance question is a management issue that catch directly what managers want to recognize when it comes to review their strategic points and target. The reason for KPQs they focus on what you really need to discuss when we review performance, and to some important parts, they provide guidance to collect meaningful performance indicators. For most of time organizations jump straight to designing indicators without thinking about KPQs. These problems are what people are clear about and what the people really want to mention. When begin to design KPQs, people should ask theirselves : ‘In order to help us answer our key performance questions what the data and management information are we needed to collect ?’ Begin to design KPQs, people should make sure that, by default, all the questions are subsequently related to design performance indicators. Furthermore, KPQs put performance data into context and facilitate communication, guide discussion and direct decision making(Marr et al., 2010a).
3 The importance of KPQs
3.1 KPQs enable to design meaningful KPIs
In basic scientific method, people first need to define the problem of they want to explore, and then gather more information and form hypotheses(Marr et al., 2010a). Only in this way, they decided that the most appropriate method to collect data, after that they analyze and explain the problem to answer the questions. If people begin to collect data but do not understand what the answer they're looking for and then they will tend to collect wrong or unnecessary data .So the really important insight issues they need to answer will still exist. This problem occurs to so many organizations .
Take the International Baccalaureate(IB) organization as an example .IB's Head of Strategy ,Andrea Smith says"We already had a set of KPIs in place,but when we looked at them through the lens of the KPQs we found that they weren't that useful," she says ."They were much more operational than strategic ,and it became evident that we didn't have KPIs that were really tracking the long-term health of the organization ,"...