What are KPI’s?

There is a lot of talk about KPIs. But what are KPIs? DATA KINGDOM explains.

What are KPI’s?

KPI is an abbreviation. KPI stands for Critical Performance Indicator. The definition is often based on the English translation: Key Performance Indicator. A KPI indicates the status of a predetermined measurement goal. This can be about all kinds of goals. A financial KPI will reflect the status of the organization’s financial situation, while operational KPIs can say something about the productivity or efficiency of the work.

A KPI is best explained using an example. When looking at operational KPIs, the example depends on the industry in which your organization is active. A production company has operational KPIs such as the number of goods produced per day or the number of products in stock. Based on these numbers, a manager can determine whether team members should speed up or slow down. The KPIs therefore serve as management information.

The same applies to financial KPIs. When the financial KPIs such as accounts receivable or profit do not show the numbers that the manager would like to see, this means that there is work to be done.

What can you do with a KPI?

By making objectives measurable, it is possible to monitor progress. A KPI allows management to be based on data, instead of gut feeling. KPIs are therefore one of the conditions for data-driven te werken

 

When an objective is translated into a KPI, it is possible for managers to take actions to achieve the objective. For a marketing manager, a KPI could be the number of visitors to the website or the number of downloads of the white paper. If the objective is to get more visitors every month, you can choose, for example, to start with paid advertisements or to encourage employees to share blogs within their network.

A KPI makes it possible to decide, based on the current status, what further actions are needed to achieve the objectives.

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How do you determine which KPIs are important?

When managers start managing based on KPIs, it is important that management is based on the correct KPIs. The organization’s objectives will therefore have to be translated into KPIs. This seems like an easy step, but the organizational objectives are often translated into objectives per team or department. Every team or department therefore has its own KPIs. The KPIs of the management team will therefore be a lot more general and at a higher level than the KPIs of the business controller or customer service employee.


To determine which KPIs are important for which group, it is wise to brainstorm about this as a group. At DATA KINGDOM we facilitate this through a design thinking workshop.In this workshop we discuss daily activities, challenges and priorities. Naturally, we also discuss the objectives of the organization and the role those present in the group play in this. At the end of the workshop, after a few spirited discussions, we determined what the priority of the KPIs will be.

How are KPIs made transparent?

In order to manage KPIs, it is important to be constantly aware of the current status. This can be worked out manually in a report. How often this reporting must be kept up to date depends on the type of KPI. When there is a need for the most current status without waiting for it, it is wise to work with one KPI dashboard. An online dashboard ensures that you can always look at today’s situation instead of yesterday’s status.

Do you also want to manage KPIs?

DATA KINGDOM has experience in facilitating design thinking workshops or developing an online KPI dashboard.

Please contact us!

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