Identification and Measurement of KPIs within Your Organisation
KPIs stand for Key Performance Indicators and are the essential success indicators of the firm used to measure the firm’s progress in reaching its various organisational goals, including financial targets. KPIs are thus the measurement indicators and quantifiable. These measurements are identified and defined beforehand and are considered representative of the organisation’s core success factors.
KPIs differ from organisation to organisation because of the focus differences of firms and departments. Whereas a sales division may have the number of sales as an indicator, a call centre may have the number of customers assisted in the given period as KPI.
It is essential to select Key Performance Indicators that accurately reflect the organisational goals. The word “key” is indicative of the importance of the indicators. These indicators should be critical to the firm’s success.
KPIs must meet the minimum requirements of being:
- Reflective of organisational goals.
- Critical to the success of the firm in reaching its goals.
- Measureable and thus not vague statements.
Not all measurable factors are, however, essential for the organisation’s success. When the KPIs are selected, one must limit such to those factors contributing to the reaching of the set goals. Everything that is done within the organisation must be done with the key success factors in mind.
Although the firm can have three to five main indicators, each of its departments can also have their own KPIs in line with the overall objectives of the firm. The production department, for instance, can have a KPI of the number of units produced, while the success factor for a sales division can be the contact time with a customer before a sale is realised. However, all the KPIs within the organisation must be in support of the main KPIs of the organisation.
Vague KPIs should be avoided. One should be specific in the definition of the Key Performance Indicators. A KPI that states to increase turn-over is rather vague, but one that states change in turnover from quarter to quarter is properly defined. It can be measured according to specific criteria, such as geographic location or production branch and it has an overall target – turn-over increase on a quarterly basis.
Once the KPIs have been defined and are measurable and reflective of the organisational goals, you will be able to use them to measure the performance of the company. Every employee in the firm will then know what is important within their department to ensure that the organisational goals can be reached. The KPIs for every department must be highly visible and of course, in line with the overall KPIs for the firm.
One of the problems often experienced in organisations is the clear defining of the correct success factors. With almost everything being measurable within the firm, it is easy to fall into the trap of identifying too many factors which are not relevant to the reaching of the organisational goals. With an overflow of data because of incorrect measurement policies, managers often struggle to gain the necessary insight regarding what is important and what is not. The secret to success here is to only identify the factors that are critical, measurable and reflective of the organisational goals.
How KPI Management Solutions Can Assist
We assist organisations in determining the critical factors and defining the KPIs and the measurements at three levels within the organisation. First we assist in determining the KPIs for the overall strategic business unit or organisation, then the department and finally also the individual. As part of our service offering we present workshops and information on KPI best practice.
We, furthermore, assist in business optimisation by identifying problem areas within the operations or for instance, KPI selection, quantification of value and analysis of the problem. We fix problems in processes and redesign the processes where necessary.
Our team provides you with relevant reports and we create dashboards which you can use to control various processes. We provide assistance with defining and measurement of KPIs by strategic goals, department, and business processes. Part of this process entails the usage of QlikView dashboards and solutions to help your firm manage performance more effectively. Call in the experts of KPI Management Solutions for professional assistance if you need help in identifying and measuring KPIs to ensure that your organisation can reach its targets.