KPIs and their properties defined with the EXTREME method

Key Performance Indicators (KPIs) are the main instruments of Business Performance Management. KPIs are the measures that are translated to both the strategy and the business process. These measures are often designed for an industry sector with the assumptions about business processes in organizations. However, the assumptions can be too incomplete to guarantee the required properties of KPIs. This raises the need to validate the properties of KPIs prior to their application to performance measurement. This paper applies the method called EXecutable Requirements Engineering Management and Evolution (EXTREME) for validation of the KPI definitions. EXTREME semantically relates the goal modeling, conceptual modeling and protocol modeling techniques into one methodology. The synchronous composition built into protocol modeling enables raceability of goals in protocol models and constructive definitions of a KPI. The application of the method clarifies the meaning of KPI properties and procedures of their assessment and validation.