Whether you're just starting to dip your toes into the world of performance management, or you've been tracking and visualising your KPIs and reporting for some time, there's always new processes, strategies or even just a couple of tips that can help you maximise all your hard work.
This guide will help you understand everything you need to know about delivering truly engaging, and visually appealing reports.
In this article...
- What is a KPI Report?
- What are KPIs and Metrics?
- What is the difference between KPI Dashboards and KPI Reports?
- Different Report Types
- Building a KPI Report
- Practical Examples
- A Key Collaboration and Communication Tool
- 6 of the best Reporting best practices
- More Resources
What is a KPI Report?
A KPI Report is a business performance tool that effectively visualises Key Performance Indicators. Companies use these reports to track progress against targets and goals to improve performance. A KPI Report will typically contain a mixture of Charts, Graphs and Tabular information.
What are they for?
Today, more than ever, organisations unwittingly produce enormous sums of data. From the number of visitors to a website, the quantity of products sold, to the micro data produced in a manufacturing process. Some of this data is critical for a business to operate, some is automatically collected, and some is just well... irrelevant.
Reports allow us to slice through this constant deluge of data. They summarise the information so it's more manageable, and ultimately more usable.
A KPI Report is not only a more refined way to collate this data, they are designed to visualise KPIs and Metrics that specifically target performance against objectives. They are the pinnacle of a structured performance monitoring or improvement process.
What are KPIs and Metrics?
To understand performance reporting, it's important to establish what a KPI is? and what makes them different from metrics?
What is a KPI?
A Key Performance Indicator (KPI) is a Metric that is primarily aligned to a 'Key' business objective. It tracks how effectively an organisation is performing against that objective, target or goal. Companies use KPIs to bring about performance improvements that drive growth.
For example, if your objective for the next 6 months is to increase leads by 50%, a basic KPI criteria might look like this:
- Objective: To Increase leads by 50%.
- Measurement: A combined total leads KPI - calculated by taking all leads from all channels.
- Activities: Increasing the number of lead generation channels.
- Responsibility: Who will be responsible for making sure these activities are completed.
- Time frame for success: 6 months.
- Reviewed and communicated: At the End of each month.
KPIs help you keep focused on the overall business objective. They provide a structured and timely mechanism to see the progress towards this goal, without the distraction of tracking too much or the wrong things.
And what about Metrics?
These, on the other hand are measures or numerical values. In the example above the individual leads generated from different channels are individually classed as metrics. Metrics are not just limited to individual measures, they can be calculated from a series of Metrics.
Are Metrics important?
Metrics can be as equally important to an organisation as KPIs. They offer a way to measure the health of business activities. For example, a metric that measures the defects in a production line can quickly alert the company when there is a problem. The same metric can also be used to analyse the performance of different production lines over time.
What is the difference between a KPI Dashboard and a KPI Report?
A Dashboard is primarily a visualisation tool. They employ a blend of graphs and charts to provide real-time performance of KPIs and Metrics that can be viewed at-a-glance.
A Report focuses on an analytical interpretation of the underlying measures, using trend graphs and tabular formats to support the decision-making process.
Reports and dashboards are often confused. They both share similar functions and advantages when it comes to visualising KPIs. Understanding how each is used in a business environment will help distinguish the variances.
The KPI Dashboard
Dashboards lend themselves to operational, or day to day performance monitoring better than reports. By nature, they are designed to be understood at a glance. For example: A sales team may create a Sales Dashboard. This would be accessible by the entire team who would 'dip' in and out of the dashboard to see their performance (usually in a league table format) against others. These metrics could be the number of wins, calls or leads.
The KPI Report
In contrast, the Report is usually where the analysis takes place. What makes up those KPI numbers? Why are there fluctuations in the data points? What caused this to happen? These questions can be addressed by digging into the historical data. Reports will also be delivered at specific points for review, such as monthly sales meetings - where they would provide tabular data, offer historic context with trends, and interpretations of the metrics.
Which should I choose?
There is no hard and fast rule for this. Use whichever you're more comfortable with. Generally, we see Reports for analysis and Dashboards for day to day monitoring. However, both can be interactive, both offer almost the same functionality - and there is no reason that you can't employee both in your performance monitoring. After all measuring something is better than measuring nothing at all.
Different Report Types
As you've probably gathered by now, there are different types of KPI Reports, not just categorised by which business department but by their purpose.
The 3 types of KPI Reports are:
- Analytical based.
- Operational based.
- Strategic based.
Analytical Reports: provide detail behind the KPIs. They can be used across all areas of the business. These reports are designed to answer questions arising from peaks and troughs in the KPI data. A static version of this report will typically show historic values; whilst interactive reports allow users to dynamically investigate the data by breaking down the individual metrics.
Operational Reports: are focused predominantly on the day to day activities of an organisation. They provide information to those involved in those activities to help make decisions or take actions. For example, in a finance department a report covering the number of debtors may be used to keep debtor levels low.
Strategic Reports: aim to provide a clear and meaningful picture of the health of the business and where its heading. The value in these reports is to show business owners and shareholders how the business is performing against goals and set objectives.
Building a KPI Report
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In this section we'll look at the 5 steps you'll need to build a KPI Report.
Create an overview.
This can be in the form of a simple outline document that aims to set the
criteria of the report - answering the following questions:
- What is the objective / goal of the Report?
- Who will the audience be?
- How will the Report be used? – is it Strategic or Operational? Static or Interactive?
- When will it be distributed?
Define the KPIs:
Once you've established the overall objective, you'll have a good idea about the KPIs and Metrics you need.
KPIs need to answer questions such as, how well are sales performing against their goals? or is company growth on target?
Getting the data that fuels these KPIs can be the tricky part, does it currently exist? Can it be automated? Is it reliable? are just some of the questions you'll need to answer.
- Present your KPIs: Choose appropriate charts / graphs and tabular data that will present the information in the simplest possible way. Keep the charts relevant, focused and in context. Present your KPIs in a logical order to keep the flow of information or the 'story' from getting disjointed.
- Build a prototype: Create a first draft, use dummy data (if none exists) and distribute this to colleges and stakeholders. Providing a single point of feedback, sometimes in the report itself to help encourage consensus.
- Refine and release: Finalise the report and distribute. Just like any business process, reports need to be adjusted and refined over time to keep them efficient. Build in regular reporting review and maintenance periods, this will help avoid report 'bloat', keep the information relevant and up to date.
We've put together some practical examples for you to take a look at.
The Operational Sales Reports
Good sales leadership understands that reporting is critical for determining if you're on course to hit monthly or weekly targets. Which of your sales teams are producing the most wins? and which are the big closers? See sales efficiency by tracking closing ratios of leads to sales. Presenting real time sales information in league tables shows how each member is performing.
Strategic Organisational Reports
Organisations often make annual objectives for the business. Increase growth by 20%, Reduce our overheads or increase market share. Having a report that shows how the company is doing against the objectives, galvanises the whole company to direct its efforts to towards those goals.
Manufacturing Operational Reports
Accurate and timely manufacturing reports are key in maximising productivity. Managers are provided the information they need to make decisions that keep production lines running, such as machine productivity, the units produced or even lost and the cause.
Marketing Strategic Reports
A Strategically focused marketing report can determine whether all your hard work is paying off. Are we growing market share? Are we reducing marketing spend and increasing customers? Are we increasing the number of leads, and what is our ROI? Or weather a change or shift in strategy is required.
These reports are also a good way to identify potential opportunities, such as a hike in conversions rates for a specific lead generation channel maybe worth directing more budget towards.
A Key collaboration and Communication tool
Good organisational reporting and communication is essential to business success. Building an environment where everyone is working towards common objectives and goals is crucial if you want to succeed.
As any business needs good, motivated leaders with good communication skills, they equally need good, reliable reporting – both internal and external.
KPI Reports offer a consistent framework that can be used to communicate the objectives of the business and how they are being met. Primarily, communicating factual data using simple graphical elements has a couple of advantages. Firstly, it provides a single transparent view of performance, devoid of opinions or interpretations – great to build trust from a workforce. Secondly, everyone connected to the outcome of an objective can see how they contribute to its success. Employing a feedback mechanism in reports also has the benefit of collecting ideas and interpretations.
Communicating performance is not limited to internal reporting, it is also a good way to keep shareholders and even clients in the loop regarding your value and performance. Keeping a single, factual perspective of the relationship such as a shared KPI Report with your clients will help reduce those all too common frictions.
6 of the best Reporting best practices
Reporting brings about change. It's in their very nature to challenge en-grained business processes and drive performance. But how to avoid getting tied up in the complexity? How to generate meaningful insights? And how to get the most out of your reporting? Here's 6 best practice tips to avoid the pitfalls.
- Set clear objectives. Create a clear brief for the report and stick to it. If it's a strategic focused report keep it that way, don't be tempted to 'bolt on' other metrics or KPIs just because it's convenient, build a separate report instead.
- Keep it simple, really. Don't fall into the trap of having the data dictate what to measure. There's an almost infinite number of KPI or Metrics that could be tracked. The secret is to focus on what is 'Key'. Restrict your initial report to a small number of KPIs and measure only what matters.
- Embrace technology and the cloud. It's time to ditch the spreadsheet and take your reporting to the next level. Cloud based solutions designed for KPI Reporting are now more accessible than ever. They are a highly secure and cost-effective way to build and distribute your reports.
- Ensure data consistency. To demonstrate integrity in your reports, data accuracy and data is crucial. Nothing will ensure the short shelf life of a report than one that is misleading and relying on data that is out of date. Spend time testing various data-sets for their accuracy before committing to them.
- Coordinate with colleges. Creating reports in isolation to the people who will use them is a recipe for disaster. Invite colleagues whose very responsibilities will be determined by the report to provide input on what needs measuring, when and how this will improve their processes.
- Review regularly. Businesses change, as do objectives and goals. What's important to track today might be obsolete tomorrow. Keeping regular maintenance and review points in the diary will help to keep your reports accurate, relevant and a beneficial to your business.
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