All companies know the importance of customer service, employee satisfaction and office organization. One important aspect of businesses aiming for success is to identify and focus on key performance indicators (KPIs). KPI are used in business to measure, monitor, and manage performance across business areas. They can be used to focus on employers and employees on the details of what action to take to improve their business.
KPIs focus on the aspects of organizational performance that are the most critical for current and future success. KPIs represent an invaluable form of business intelligence and when determined by company, can educate everyone involved on a strong team approach to measurable targets.
The process of monitoring, managing, and analyzing KPIs can be time consuming. For this reason, it is important that selection of metrics address the specific needs of the company. The main characteristics that help create relevant KPI include: the need for accurate measurability and an understanding of the actions taken to correct, maintain, or otherwise alter the outcomes predicted.
If a company relies on having a strong web presence to generate leads, an example of a relevant KPI would be the “bounce rate.” A bounce rate represents the percentage of initial visitors to a site who “bounce” away to a different site rather than continuing to other pages within the same site. The conventional wisdom is that visitors who bounce do so for lack of compelling reasons to explore on. Typically, the target for bounce rate is 30 percent or lower and it needs to be updated daily. If the bounce rate is higher than 30 percent, then the web content should be modified to help lower the rate. This satisfies the characteristics of a KPI and it is apparent how valuable it is to continually monitor the bounce rate.
If a KPI has been correctly assigned to a company, it will have a”flow-on effect” which will in turn benefit the company. The entire office can monitor and fix problems associated with the success rate of the company’s KPIs.
In addition, KPIs can create a type of benchmarking within one’s business. A person can see the present quality of their business and with the use of KPIs, they can envision the business they want to become; they help companies become what they deem the epitome of success through the process of managing, monitoring and analysis.
Performance dashboards are generally used to facilitate the easy monitoring of an organization’s KPIs. The dashboard will check the rate at which the chosen KPI is succeeding (or failing). If the results of the KPI are not improving, the dashboard will visually alert staff that changes must be made. It will then be possible to analyze what could have caused the shortcoming and allow staff to quickly remedy the situation.
Performance dashboards facilitate getting the most important, actionable information to the needed users appropriately. As performance dashboards have the data needed to measure a KPI in one place, it is easy to see if the KPIs are succeeding in their purpose or not. Such dashboards allow employees at any level to monitor information which represents the outcome of a KPI. Dashboards are a topic onto itself and beyond the scope of this article.
Every business person should strive to create exceptional KPIs, as they show the ways in which troubled companies can fix their problems and successful companies can proactively plan and mange continued success. Companies will obviously benefit when employees can readily understand what needs to be done through the presentation of easy-to-read dashboards allowing them to make the most effective follow-up decisions.
Let us know how we can help identify and create great KPI reporting and dashboards to help increase your profitability and efficiency!