Key Performance Indicators Can Work For You
Key performance indicators (KPIs) are a means of performance measurement used in many organizations. But what exactly is a KPI? In basic terms, KPIs are quantifiable measures that are chosen to gauge the success of the organization in achieving goals.
Measure of Performance
The types of measures used as KPIs can vary greatly based on the type of organization and what aspect of that organization is being evaluated. For instance, the KPIs can be chosen to measure the overall progress of the organization, or they can be focused on measuring the success of a specific project or product.
Additionally, KPIs can be either quantitative (fact-based) or qualitative (subjective). Because KPIs are “indicators” they measure what has already happened. “Prognosticators” of future developments are not KPIs, but sometimes predictive analysis may be performed based on a KPI. Each KPI should be assessed in terms of target values so that it is possible to determine whether expectations have been met.
To get meaningful results, it is essential to select the correct KPIs. It is recommended to base KPI selection on what are known as “SMART criteria” for setting objectives. SMART is an acronym meaning Specific, Measurable, Achievable, Relevant, and Time-related (i.e., showing outcomes for a specific period).
The following are just a few examples of metrics categories that can be used as KPIs:
Profit margins, cost effectiveness, sales by region, return on equity, accounts payable turnover, etc.
Customer acquisition cost, customer satisfaction and retention, etc.
Employee turnover rate, employee satisfaction, etc.
Professional Services metrics:
Utilization rate, project profitability, project success rate, etc.
Digital Marketing metrics:
Return visitors, brand awareness, click through rate, response rate, etc.
Supply Chain metrics:
Order tracking, rate of return, inventory accuracy, etc.
Call Center metrics:
Active and waiting calls, blockage, call volume, average talk time, cost per call, etc.
Spark Thought can help your organization use KPIs. We take a detail-oriented approach and work with SMEs (Subject Matter Experts) at your organization to implement an overall strategy so that you can optimize the use of KPIs to get the best possible results.
Spark Thought can assist with each step of the process by:
- Performing strategic analysis to define what goals or processes should be evaluated
- Selecting the appropriate metrics to track success
- Comparing the results with the set goals and interpreting their meaning
- Conducting periodic reviews to assess the effectiveness of chosen KPIs in measuring successful outcomes
Spark Thought has years of experience using KPIs for clients in numerous industries, so let us help you make the best use of this helpful tool to aid your business in achieving the highest possible level of success.