Finance Indaba reveals how data points can help drive KPIs

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IIA SA CEO Julius Mojapelo explains how data-led performance management can help drive KPIs.

How useful are KPIs? That’s how Julius Mojapelo, CEO at The Institute of Internal Auditors of South Africa (IIA SA) opened his address at the 2022 Finance Indaba. “The problem with KPIs is that they narrow our focus, while data expands it and allows you to see a bigger picture and address challenges much earlier. The over-emphasis on KPIs has been detrimental to business because data sets are more empowering and useful, especially now that business objectives have to evolve because of the changing environment,” he explained.

All organisations work with data when outlining their objectives and KPIs, but to what extent are you drilling down in your data points to extract the maximum amount of information to help enhance your businesses performance, Julius asked. He said that data should drive performance indicators, and in order for it to do so effectively, business needs to identify data points per KPI item to truly get value.

“Collect as much as data possible – you can never have enough – and create new connections between data sets. The more information you have the better. The aim of data is for you to identify problems and challenges; the solutions are secondary,” he said.

Julius used the IIA as an example of how data has helped them develop their strategy and grow their membership base. The institute’s overall objectives are to build the internal auditing profession and its credibility in South Africa. But they face a challenge: they are not the only governing body for auditors in the country. There is also the South African Institute of Chartered Accountants (SAICA) and the Independent Regulatory Board for Auditors (IRBA), among others.

The IIA currently serves internal auditors in South Africa by offering technical guidance, professional training programmes, certification programmes, continuing professional development opportunities, conferences and networking opportunities.

Key data points they used in developing their 2022 strategy were:

  • Members with designations
  • Members with more than one designation
  • Members without a designation
  • Members enrolled for a designation

From the results of this data, the IIA learnt the percentage of members who have more than one designation is in fact higher than compared to the target that the IIA had set for itself. But upon further investigation, data sets showed members were not correctly allocated to regions and in some instances, regions had higher numbers. Only when the data was shared with the various regions were the discrepancies picked up and the problem rectified.

To successfully refine data points, Julius advised adding new fields to data sets, automating the data collection process and making data readily available to team members and stakeholders as they might be able to help drill down the information further.

“The key to using data effectively is to communicate the results regularly. Data must lead meetings. Meetings must not have an agenda; rather focus on what the data says and how to find solutions. We work backwards with data – we use it for reports and then find we have information missing, instead of enhancing the frequency of data collection so it can evolve and enhance our business,” he said.

Julius said that when working with data it is important to empower employees, as they can enhance efficiencies and spot problems. “We often invite the wrong people to meetings. People whose work is affected by the data must decide what we do next. If you work with data sets only, the people managing the data sets can tell you the issues with the data,” he explains.

Businesses often use data in areas like sales, but Julius says support services could also benefit from data analysis. “Take for example procurement: when looking at spending we focus on the final figure. We don’t drill down further and look at who is spending on what. Stationery is an example: an employee could be buying a book every month but because the data set is not asking specific questions, you can’t pick it up. Even worse, one person may be approving 60 percent of the spend. Data is critical in every aspect of a business.”

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