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Any organisation that uses key performance indicators (KPIs) is better placed to achieve sustained business growth. The use of KPIs provides a clear monitoring mechanism for business performance against goals, and highlights areas for improvement when things aren’t quite on track.
There is no need for business owners to make those difficult growth decisions blindly, especially when they have the ability to make informed decisions using analytics.
We measure performance because?
The main reasons that companies’ measure performance is not to support the age old management mantel of: ‘What gets measured gets done’, the main reasons for measuring performance are.
Focuses employee attention
Resources are continually faced with pressures on their time, when they know that their performance will be measured on specific tasks they focus on.
Make informed decisions
The right data to the right person at the right time enables managers, individuals and companies to make faster informed decisions.
Compliance
Sometimes organisations have to document, measure and report on their compliance metrics for either governmental or industry legislation.
Is there no limit to what can be measured?
The simple answer is no, literally every business measures something. The very nature of business dictates the use of values for everything, such as number of units sold - to operational metrics taking time to delivery as an example. Then compound that number by calculating metrics against each other to produce complex results, and you could end up with enough KPIs to keep you busy doing the math, and not running the business.
Using KPIs correctly
Keeping KPIs simple and focused on what the business goals dictate can be an arduous task. Poor understanding of what makes a good KPI can produce KPIs that lack specific goals, lack of measurement and more importantly, do not determine success or failure. KPIs should be well-defined, quantifiable and be directly aligned to the business goals, to be of good use.
How to measure your KPIs
Once you have KPIs defined, ones that can be measured and reflect your organizations goals, what do you do with them? How do you distribute your KPIs amongst their owners? – And how do you collect the data and setup reporting.
The easiest and most robust way is to select KPI Software that will guide you through the process of creating you KPIs and distributing them throughout your organisation. The system should provide a complete end to end KPI solution, one that not only helps you create and assign your KPIs but allows multiple users to access from different locations.
And last but not least, the KPI Software should allow you to analyse the data, bringing important information to the surface in dashboards and performance visualisations - without having to spend hours digging into the data.
How to choose the right KPI Software
by Stuart Kinsey
Stuart Kinsey writes on Key Performance Indicators, Dashboards, Marketing, and Business Strategy. He is a co-founder of SimpleKPI and has worked in creative and analytical services for over 25 years. He believes embracing KPIs and visualizing performance is essential for any organization to strive and grow.