05 All the KPIs you need in a digital twin business model

A digital twin business model captures all significant factors in a business system and so must give all the KPIs for its performance.

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See the full post #05 here.

Most organisations have Key Performance Indicators or KPIs for top level performance-tracking - financials of course, but often other factors like sales growth and staff turnover.

But here's the thing - a Dynamic Business Model (DBM) is a digital twin that matches not only how performance changes over time, but also how everything that drives that performance changes. So the model IS the KPI system that management needs! And this one has some big advantages.

The DBM process ensures the model has all the correct items.
You can see how all the indicators are changing, not just what their current and recent values have been.
You can see why each item's value has been changing as it has, because of the validated causal linkages in the model architecture.
You can see how future values for all indicators will likely change. So you know, for example, if an indicator that is currently OK (green) will be orange or red before long, and crucially you know when that may happen and how bad it could become. More happily, the DBM will sometimes tell you that a problematic indicator is on trend to become OK again.

What the business gets, then, is that holy grail - truly "joined-up management" - for less effort than using normal KPI systems.

There's links to an example and more about implications for larger organisations in my blog post on this topic.