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All about Key Performance Indicators (KPI)Discover everything you need to know about these performance measuresA Key Performance Indicator (KPI) is a type of measure that is used to evaluate the performance of an organization against its strategic objectives. KPIs help to cut the complexity associated with performance tracking by reducing a large amount of measures into a practical number of 'key' indicators. KPIs can be used to track the operational performance of departments, projects or individuals against targets or goals. They can provide a management tool for gaining insight and decision making. What do KPIs look like?Unlike simple Metrics that are used to monitor and present values, such as the number of visitors to a website. KPIs may incorporate one or many different metrics to track a business objective. For example, a KPI aligned to a strategic marketing objective may look like this:
A well-constructed KPI helps organizations translate visions into strategies, and tracks the impact of initiatives. Companies benefit from a host of advantages, such as greater insight and real time information to make informed decisions. For more detailed explanations, take a look at the following resources:
How to create KPIs in 5 simple stepsDeveloping meaningful KPIs that track, and clearly visualize performance takes some planning. Each KPI needs to address a specific business objective, and provide timely, accurate information to assess progress towards goals. Essentially, creating successful KPIs comes down to understanding the aspirations of the business using a clear, structured process for crafting KPIs. Here's how to create a KPI:
Additionally, as business objectives change, it will be necessary to revisit your KPIs periodically to tweak, adjust or replace as needed. Business
Chron What are Leading and Lagging KPIsWhen you're looking to implement KPIs to improve a business process, you will often hear the terms “leading” or “lagging” indicators. But what do these terms mean? – and how can you implement them as part of your strategy? Lagging KPIsLagging KPIs are used to determine the result of past performance, such as production, volume or a result. They are easy to measure as they are typically a simple value that is used to understand how well a process is performing. For example, the 'number of units produced' in a manufacturing process or 'revenue this month' are lagging KPIs. Leading KPIsLeading KPIs are used to predict or influence future performance. They are more difficult to set up as they rely more on external actions to impact outcomes, such as changes in process or investments in infrastructure. For example, increasing the number of 'routine maintenance checks' in a production line may highlight faults that were causing defects. This would then lead to a higher overall unit production rate. What are Organizational and Operational KPIs?Across different business functions KPIs have a wide range of practical applications. From daily indicators that provide real time management information to more long-term organization objectives. Typically, KPIs fall into two main categories: Operational KPIsOperational KPIs clearly articulate detailed and timely information that is used to make day to day decisions, or take corrective actions on performance or a process. These KPIs are usually complex in nature as they use formulas with data from multiple sources. Strategic KPIsStrategic KPIs are focused on long term objectives derived from an organizations goals. They help identify if a strategy is working and if it is on target. As such these KPIs are sometimes referred to as High Level KPIs. Presenting Key Performance IndicatorsWhen it comes to Key Performance Indicators, Presentation Is Everything. Even the best planning, knowledge and methodology can render your hard efforts obsolete if the KPIs fail to communicate effectively. Luckily, there are a couple of tried and tested solutions that will help you measure and report on your KPIs, while achieving communication excellence: KPI DashboardsDashboards are highly flexible tools that allow you consume data into graphs and charts quickly. They are orientated towards presenting real time operational KPIs that should be seen at a glance, such as 'Number of sales this month' or KPIs associated with Marketing Campaigns. Most dashboards incorporate sharing functionality, so they can be conveniently distributed among team's departments and users. More on creating and distributing dashboards can be found here. KPI ReportsReports offer an in-depth or analytically focused platform for presenting KPIs. They typically incorporate drill down and analytics features to interrogate the trend data behind the KPIs. This makes reports a good fit for long-term strategically focused objectives such as increasing market share. Create engaging KPI Reports for better insights. 20 Working KPI Examples and DefinitionsOperations
More operations KPIs can been viewed in the KPI Library Lettings
More Lettings and Rental KPIs can been viewed in the KPI Library Transportation
More Transport and Haulage KPIs can been viewed in the KPI Library Construction
More Construction KPIs can been viewed in the KPI Library Deploying KPI TemplatesTemplates can provide a good starting point when beginning to implement KPIs. As they show a collection of working examples they offer inspiration and a base on which to build, customize and deploy. Here are some examples of some commonly used templates: Manufacturing TemplateA set of 18 KPIs aimed at the manufacturing and engineering industries. These Manufacturing KPIs help track and monitor performance such as production costs, Labor costs, production losses and cycle times. These KPIs offer a best practice approach to manufacturing process tracking.
Explore this Manufacturing KPI Template Financial TemplateA selection of 11 financially focused KPIs. This template is designed to track financial KPIs such as Disputed Invoices, Net Profit Margin, EBIT, Revenue and working capital. This template offers a base set of financial metrics and KPIs commonly used in organizations to help with the bottom line and drive sales growth.
Explore this Financial KPI Template Human Resources Template16 Human Resource focused KPIs designed to assist with various aspects of managing employees such as Cost per hire, Health Care Costs and HR Expenses.
Explore this Human Resources KPI Template Retail Template16 Retail focused KPIs to help all facets of retail outlet performance across multiple industries. This template assists in monitoring Retail KPIs and business metrics such as cost of goods, Gross Margin, Retail Price and Net Sales.
Explore this Retail KPI Template Discover 10 more KPI Templates Key Performance Indicator Best PracticeWhat makes Key Performance Indicators so effective? What sets them apart from just plain old data measurements. Here are 5 factors that can be the difference between mediocre data recording and a truly effective business improvement exercise:
What is the best indicator of company performance?A company's operating efficiency is key to its financial success. Operating margin is one of the best indicators of efficiency. This metric considers a company's basic operational profit margin after deducting the variable costs of producing and marketing the company's products or services.
What are critical indicators of success?What are CSFs? CSFs are the ways a company can accomplish its goals. They are the tasks, methods, tools, skills, mindsets and other components necessary for a business's operation and prosperity. In order to know their CSFs, a company's leaders first have to create a mission, goals and definitions of success.
What is critical process indicator?What's a process indicator? Also called Key Performance Indicators (KPIs), process indicators are management tools used to evaluate quality of processes and performance of tasks.
What specific indicators can the companies use to measure progress and performance?What Are the 5 Key Performance Indicators?. Revenue growth.. Revenue per client.. Profit margin.. Client retention rate.. Customer satisfaction.. |