- Financial Solutions
Key Performance Indicators: Necessity or Nuisance
Updated: May 8, 2019
Key Performance Indicators (KPIs), measure a business objective. Organizations use KPIs to evaluate their success at reaching goals.
You can’t measure what you don’t track. Tracking a data point provides you with knowledge. Knowledge is the power to make a change. KPIs are the best system to make data-driven decisions and informed changes to improve your organization. Tracking relevant KPIs can have the following benefits:Increase profits. Become a healthier and more predictable business. Create Accountability within the organization. Measure performance and happiness of employees. Measure happiness of clients.
Begin by looking at the data you already have available in your organization. Make an inventory of the data being collected and determine if there are any holes between what you have and what you need. Create a spreadsheet to track all your metrics. Message me for an example.Develop a recurring meeting in which KPIs being monitored are discussed and when necessary, corrective actions are planned and implemented.
The Fine Print
KPIs are not an end into itself, and are only as good as the decisions which they help you make.
Consider the following to make the best use of KPIs:
Develop KPIS that are relevant to your unique business. Find comparable industry benchmarks to provide additional context. To establish a trend, several months of data are necessary. Before taking corrective action, ensure that you understand what the KPI indicates.