A problem identified is a problem that can be solved. Similarly, when there are successes in business performance, it is good to know and learn from them so that they can be repeated.
Key performance indicators (KPIs) are the metrics that allow organisations and individuals to track and measure how they are faring against business objectives.
Once you understand what you are getting right and wrong, you can then decide where and how to improve. If reported on regularly, KPIs allow the business to measure the progress of projects or employees, to monitor the health of the company and to analyse patterns and cycles over time.
They are also used to analyse your business systems and processes to ensure they are achieving optimum results. Measuring KPIs provides timely and regular opportunities to make adjustments to align with the wider business strategy, as well as to solve problems before they become critical. Through ongoing reporting, potential opportunities can be picked up and actioned while the opportunity is still there.
Which KPIs are important to measure?
According to Forbes, the types of KPIs that are important to measure in your business include:
- Financial KPIs – For example, profit margins, so that business can assess where and how to grow.
- Sales KPIs – These includes the monitoring of lead generation, for example, so that the sales department can understand where to focus their resources and time.
- Marketing KPIs – A range of metrics comes into play here, such as social media conversion rates and landing page conversions, for which timely analysis and adjustment is key. Never more so than in our current digital age, according to the Wall Street Journal.
- Operational KPIs – To measure and understand how efficient your business systems and processes are, as well as keep tabs on expenses.
- Product KPIs – For product based businesses, it is essential to track returns or which products are damaged or wasted.
Measuring and reporting goes hand-in-hand
If you are only measuring, but not reporting on this data, then it is impossible for the team to act on it. If there is not ongoing and appropriate measurement, then it is impossible to know whether you are tracking on small or big goals or even to what extent you are achieving the tasks you have set out to do.
Having the right KPIs in place and measuring them regularly provides the opportunity to get an overall snapshot of the business, as well as to zoom into more specific aspects – like employee engagement or turnover, net profit or revenue. In general, KPIs are set for yearly goals (as well as quarterly) and are reported on often so that adjustments can be made as needed.
Effective KPI measurement and reporting lead to business success
In terms of the humans within an organisation, measuring and reporting on KPIs can provide structure and accountability for employees, as well as contribute to morale. If an employee is tracking towards their individual goals and they see regular data as evidence of such, it can add to a sense of being on the right path at the end of each reporting cycle – be it a week, month or quarter.
Many businesses link KPIs to incentives and bonuses to create a culture that celebrates success. If there are departmental KPIs set, it can also encourage team members to collaborate and communicate with one another.
Once you have the right data, it becomes possible to make wise business decisions. Data also supports strategy and goal setting. When measured appropriately and reported on regularly, KPIs are an asset to your business efficiency and to developing your human capital.
Through our intelligent KPI dashboards, Can!do offers measurement and optimisation services to get your processes and systems operating at maximum potential. We support user adoption and capability development to boost your business efficiency.
Through customised measurement and reporting of KPIs, business leaders gain insight into their unique systems. This allows for improved insight through real time metrics. For more information about our services, please contact us today.
Can!do works with large enterprises in South Africa to maximise the value of their employees, technology and business processes. To do this, we offer three fundamental services; change management, capability development and performance optimisation.
We have 30 years of experience in these fields and have worked with leading companies in South Africa. We are a certified Level 2 B-BBEE company and a leading provider of new business systems and processes that drive user adoption. For industry insights and news, please follow us on Facebook, LinkedIn and Twitter.