Goals and KPI Introduction by liamei12345

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```									 3-07 GOALS AND KEY PERFORMANCE INDICATOR INTRODUCTION
Included in this introduction are examples of goals that have been created using the Specific
Measureable Attainable Reaslistic Timely (SMART) method. It also explains in detail how to measure
success using Key Pefromance Indicators (KPIs).

Objective
This introduction provides everything a facility needs in order to create new energy goals or revise
existing ones. Goals help make the long-term vision concrete by providing direction and a way to
measure progress. Whether setting goals or KPIs, data is the critical ingredient. Baseline production and
energy use are the starting points in energy management systems. Developing goals and tracking
success is one of the most challenging aspects of implementing CEI.

Implementation
Provided here is information about the following two Playbook tools:

1. 3-07a Energy Goals Calculator- Template
2. 3-07b Key Performance Indicator Matrix- Template

Goals
A goal must be SMART:
■ Specific: Straightforward and emphasizes the desired outcome
■   Measurable: Sets a Key Performance Indicator (KPI)
■   Attainable: Capable of being achieved with some effort
■   Realistic: Achievable in the timeframe being discussed
■   Timely: Time binds the effort

Sample of a SMART Goal from fiscal 2002
Through life-cycle cost-effective action, each facility shall reduce energy consumption per unit of
production by 20 percent by fiscal year 2015 compared to fiscal year 2000.

This goal is specific in that there is a 20 percent reduction as measured by energy consumption per unit
over a 13 year timeframe, which is realistically achievable with some effort. Baseline information from the
year 2000 is expected. It is important to determine the source of both the energy consumption and
production data to support this goal. The KPI is energy intensity (energy consumption per unit of output).
Fiscal year 2000 is the baseline and the energy intensity from that year is on the KPI graphs going
forward.

Energy Goals Calculator
This tool is a simple spreadsheet to calculate the goals that a facility would like to reach based upon an
average energy usage or energy usage of the year prior. The sheet also provides the calculations to
determine estimated savings based on energy use against production. While this calculation is not true
savings, it should warrant some time to look into this estimated savings calculation vs. a comparison from
bill to bill. To utilize this calculator, the following values are needed. Entry directions are provided directly
on the tool.

Key Performance Indicators (KPIs)
KPIs are financial and non-financial metrics used to help define, align, and measure progress toward
goals. Facilities typically use KPIs as the performance feedback mechanism.

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Sample KPI
Best practice facilities aim for 100 percent on-time delivery. A KPI can measure on-time delivery as: date
delivered versus date promised with three days early and 0 days late as a bounding condition.

■   KPIs compare trended data over time. Typical data comparisons are against both actual and
performance targets. These comparisons help drive action.
■   A critical few KPIs are owned, tracked, and reported regularly

Best practice facilities typically have six to ten KPIs. Each KPI has an owner responsible for trending data
over time. The owner is responsible for explaining deviations as well as key corrective actions underway.

■   KPIs are developed across the facility and typically reside at each level of the facility
■   Process-level KPIs are helpful in identifying sources of opportunities for improvement
■   KPIs may be summarized in scorecards that help with communication
■   KPI Reviews are regular meetings that help reinforce the goals of the facility, focus action on
critical opportunities, and encourage employee interaction
■   KPIs help facilities recognize, reward, celebrate, and incent performance
■   KPIs are typically broadly communicated and easily visible to employees

All employees in best practice facilities are aware of the facility’s goals, the current status toward
achieving them, and the KPIs used to measure progress.

References
Using Key Performance Indicators to Manage Energy Costs by John C. Van Gorp, Services Marketing
Power Measurement - http://handle.tamu.edu/1969.1/5643

Key Performance Indicators Matrix
This is just one tool to help facilities understand and measure their progress to goal. The matrix allows the
facility to track the overall corporate energy goal(s) by measuring the KPIs of each system within the
facility to show its impact on the facility, effectively helping reach both its own energy goal(s) and the
corporate goal(s).

Click on to open a template/tool or to open an example:
■   3-07a Energy Goals Calculator 

■   3-07b Key Performance Indicator Matrix-Template 

■   3-07b Key Performance Indicator Matrix- Example

 Stage of Engagement (SOE) and ITS Tracking
Energy Goals

■   Goal information is also tracked in ITS Projects → Project Details → Energy Savings Goals =
input new data + Project → Project Overview to reflect change to data = ITS userID mm/dd/yyyy:
energy goal updated per facility records and [document name] states goal is uploaded to Projects
→ Supporting Documents.

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■   The goal calculator can be used to show how a facility creates and/or revised it energy goals. It
can be uploaded to ITS Projects → Supporting Documents, saved as Org_Loc_ Energy
Calculator_mm-yyyy.

Key Performance Indictors
■ First tier/high level KPIs are SOE required: Stage 3, Task 12.

■   If KPIs are related to energy, they are tracked in ITS Projects → Supporting Documents, saved
as Org_Loc_Energy KPIs_mm-yyyy.

■   If KPIs are non-energy related, the document still needs to be uploaded in ITS Projects →
Supporting Documents, saved as Org_Loc_Non-Energy KPIs_mm-yyyy.

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