Performance Assessment Using Key Performance Indicators (KPIs) for Water Utilities: A Primer

Abstract

Key performance indicators (KPIs) are widely recognized as a basis for evaluating water utility operations in developing countries and for designing both regulatory and managerial incentives that improve performance. A number of methodolgies can be used for assessing performance, with KPIs and overall performance indicators serving as more comprehensible and potentially more comprehensive than more technical empirical benchmarking studies. Data initiatives in low and middle income countries require resources that could be used for other activities with more immediate payoffs. However, regulatory oversight requires data analysis of trends, current performance, and realistic targets. Quantitative studies can provide clues regarding the extent of economies of scale, scope, and density, but policy-makers need much more detail and specificity than most scholars provide. Here, the focus is on information systems that provide accurate, reliable, and relevant data. KPIs represent the foundation for those developing, implementing, and responding to public policy — incentivizing water utilities in developing (and developed) countries to contain costs, improve service quality, and expand water access over the long run.