Why have kpis

Numerous companies are in the dark regarding how their business operates. They do have some insights into the performance of their business, but they are still somehow stuck with an idling company wondering where problems lay. Using Key Performance Indicators, or KPIs is the best strategy for measuring the successes and failures of your business. By defining and tracking KPIs, business owners and managers can get an overview of how their business — or individual departments — is performing at any given time.

Here are ten good reasons why your company must start tracking KPIs the right way! Only a handful of KPIs is needed to measure company health. Businesses that track KPIs in categories such as revenue, processes, employees, and customers find it easier to stay on track and keep their income high.

KPIs are often used to show if the company is achieving the strategic goals set by senior management. Multiple KPIs are used to measure processes such as quality indicators, productivity indicators, profitability indicators, etc. KPIs measuring employee productivity include hours worked, revenue generated, overtime, and job completion status.

Measuring employee work hours can help a company understand how much time is needed to complete projects or if overtime is paid out for less productive work. In addition to processes and employees, customer metrics are also of great significance. KPIs in this field can help a company track the number of customers, what revenue they generate, and even the customer acquisition cost — the amount of money spent searching for ideal customers. Operation KPIs are an excellent way to help operations departments improve day-to-day operations.

When you look at what these KPIs so often are, you can understand why so many managers switch off. The number crunchers take over, and can overwhelm operating managers with spreadsheets and precise breakdowns of financial results and output measures. Managers, especially those in large organizations, spend an inordinate amount of time and money measuring the satisfaction levels of their staff. Sections of HR are dedicated to running employee satisfaction surveys and making sure managers conduct frequent check-ins with their direct reports.

But when I ask senior executive teams what the organization is getting out of this, I receive blank stares. KPIs need to reflect the fact that value creation is a two-way street, and that both sides of the transaction need to get something out of it.

Think about it. Why do you want employees to be engaged? Because you need something from them. The two-way street for employees is defined by how well the company delivers on the things that employees want, tracked by tools such as those above, and by tracking the productivity and innovation of employees as a group.

Most organizations fail to develop measures around both sides. No longer do they need to wait for the end of a quarter or project to tabulate the results.

When you track KPIs, especially when you do so on a real-time KPI dashboard , you are able to ask what, why, how and when This makes learning from successes and failures a daily rather than weekly or monthly activity. Another reason why KPIs are important for personal growth builds off the idea of increased morale. Allowing employees to monitor their performance and respond in the moment means that they are more likely to achieve their goals and better understand how to do so in the future.

This sense of continuous improvement allows people to achieve far more than they might think, which is essential for workplace satisfaction and continued personal growth. It sums up all of the above reasons: what gets measured gets managed. Employee morale, culture and capacity, among others, all contribute to performance. So tracking your sales KPIs in an open, transparent way to increase accountability.

In the imagined scenario above, did your mind hone in on how you'd answer? Or did you feel scattered? If you've been a reader and subscriber long enough, you can likely rattle off the 5 or even ten most important KPIs in your industry without blinking. But what about when it comes down to one? What about when you're pressed and need to select the single most important KPI for your line of work? The one that in many ways is a representation of your impact? Keep that answer somewhere safe. It will come in handy both for your own focused daily work and for when the time comes to communicate why you're doing what you're doing.

With the previous answer in hand, now is your time to tell a story. So, how did you choose that KPI from among so many others? What challenges were you seeing? What challenge was the company or your team facing? What process did you use to select the right KPI for the situation? Cool, you answered the first and second parts, but why does this KPI ultimately matter? When goals are decided by companies, team members start work in collaboration. This approach brings two departments closer for better insight.

With KPIs, you can easily recognise any cost saving prospects related to the project construction and also craft ways to curb any extra costs that may occur in future. KPI basically include tracking of uncommitted costs and also upsurges committed costs as and when required.

Business can easily add factors like contingent costs and price escalation into the committed costs to restrict financial exposure. The knowledge that is gained from the audit can assist companies to manage all labor and material costs when they do bidding for construction in the future. Are you considering getting your own KPI dashboard? Try SimpleStrata. Create visibility Define correlations between results and efforts Generate business intelligence dashboards Provide insights about corrective actions.

Written by Exceed Team. Dec 30, PM. What Is a KPI? So, why should you have KPIs for your organisation? Here are the top 6 reasons: 1. Transparency around performance Without knowing what the goals of the organisation are, there is no way to gauge a team or individual performance.

Accountability within the team Numbers do not lie! They help with decision-making This is logical. To analyse patterns over time. Originally published Dec 30, PM, updated March 23, Don't forget to share this post! Related Articles. Hyper Automation BlockChain Artificial Intelligence HyperAutomation No matter how much technology advances, it is agreed that no single tool can replace humans. Learn more here about the Enterprise Submission Platform. BlockChain While B lockchain was first developed back in , it came to life with the introduction of B itcoin in They Let Your Discover Strengths in Your Strategy With the KPIs, companies can easily unearth potential strengths to use any opportunities that you can use to enhance the performance of your business.

They Save Business Expenses With KPIs, you can easily recognise any cost saving prospects related to the project construction and also craft ways to curb any extra costs that may occur in future. Privacy Policy Contact Us. Contact Us.