Measures should demonstrate organizational effectiveness such as waste reduction's timeliness, cost reduction, reliability, innovation, teamwork, etc. They need to provide information across time to show trends rather than merely presenting snapshots. Finally, but most importantly, they should be collaborately developed in order to facilitate their acceptance and buy in across the organization. So it is a continuous improvement vehicle to reduce process variation, identify defect sources and trends, determine process efficiency and effectiveness, as well as opportunities for process improvement. In other words, it is an integral part of a decision support system that reveals insights that are not obvious and provides the infrastructure for fact-based decisions.
Most organizations have a large number of processes and outputs.
There is a need to consolidate various measures into an index. A performance index is a tool that allows multiple sets of information to be compiled into an overall macro-unit. Some of the common indices that most individuals are familiar are standard and poor 500 index, Dow Jones, industrial average, consumer price index, Moody's Bond Rating Index, etc. These are a number of methods to calculate performance indices such as weighted average, performance matrix technique, etc. Administrative Services will be using a performance matrix technique to develop its relevant indices.