Utilities leverage key performance indicators to evolve

Key performance indicators (KPIs) are activity and profitability measures used as management tools by many industries including utilities. KPIs are used primarily to set baseline performance measures and then implement strategies for improved performance on those baselines. Measures are derived from evaluation of internal performance and also comparisons to external performance by peers using analytics of external reports or industry publications. A key tool in implementing various strategies, KPIs also measure the success or failure of initiatives for utilities.

What should be measured?

Effective KPIs meet these criteria:

• Be meaningful to support managerial decision making
• Concentrate on the most material financial and non-financial issues
• Assist with external assessment of the organization’s strategic positioning in the industry
• Align with the organization’s strategic direction

KPIs used in utilities generally fall into these primary areas:

1. Impact of activities to serve customers
2. Reliability of service
3. Safety of employees in service delivery
4. Financial strength

Data sources

The first KPI review should be of the utility’s own operations. After this evaluation, reliable sources of utility KPI data can measure one’s internal operations against industry peers including:

• American Public Power Association