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Selecting Operating Parameters for the KPI tool

Key Performance Indicators (KPIs) have emerged as indispensable tools for gauging organizational health and progress. But, the true power of KPIs lies in the careful selection of the operating parameters that define them.

The Klappir KPI tool allows you to select an Environmental Parameter (like overall emissions) and divide it by an Operating Parameter to track performance. Operating parameters are things like products sold, employees, revenue, visitors, etc. that can be used to measure performance across assets.

 

When choosing which KPIs to use in regards to environmental performance, it's good to have in mind the following factors:

  • Relevance: Operating parameters should be directly linked to your goals and strategy.

  • Measurability: Operating parameter should be clear, quantifiable, and enable the comparability of your environmental performance over time.

  • Accuracy: The data used to measure KPIs should be accurate and reliable. Inaccurate data can lead to incorrect assessments and misguided decisions. 

  • Timeliness: Update regularly. The frequency of measurement could vary depending on the nature of the KPI, but regular updates are important to ensure that performance can be monitored effectively.

  • Actionability: KPI parameters should provide actionable insights. They should offer information that can be used to make informed decisions and take corrective actions if necessary.

Example: Operating parameters for a Hotel.

Let's take a look at how a hotel could select operating parameters to tailor their KPI parameters to align with their strategic goals.

  • We could recommend using percentage-based targets (e.g. 5% decrease in waste) rather than absolute targets (e.g. 1000 kg less waste) when setting goals, since the methodology and emission factors can change over time.
  • Another relevant choice could be to add guest numbers and rented room data to the operating parameters (alongside existing inputs like total space) so they can calculate KPIs such as emissions per guest or per room overtime.


Overall, the operating parameters provide a way to contextualize the environmental data against business metrics to get more meaningful insights. Keeping track of relevant data in one place leads to accuracy and comparability when assessing the company's environmental performance, as the KPIs are based on traceable data.