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In the modern age, brands and businesses that benchmark their activities stand to gain an all-important edge on the competition.
Whatever your niche or industry, working with dynamic key performance indicators (KPIs) will empower you to track and improve your performance in a number of key areas, accelerating your commercial success in the process. Without data, you will only ever be ‘shooting in the dark when it comes to formulating strategies and making informed decisions. While there are numerous KPI examples you can choose from, you should pick only the most important ones and focus your resources on them.
That said, using the right KPIs is essential to both your immediate and long-term business activities. KPI tracking is a technique that will give you a deeper insight into the inner workings of your business - and we’re going to discuss the concept in detail.
Here, we will consider what it takes to track KPI metrics, explore the dynamics of a contemporary KPI tracker, and look at how to track KPIs.
But first, let’s ask ourselves the question, ‘What is KPI tracking?’
What Is KPI Tracking?
KPI tracking is a definitive means of monitoring your most relevant key performance indicators for increased business success with the help of modern KPI software. By measuring KPIs regularly and automatically, you can increase productivity and decrease costs.
By selecting the right KPIs for various areas of the business, it’s possible to use them to arrange as well as visualize large datasets. Doing so will not only help you to squeeze additional value from your organizational data, but it will also provide the opportunity to set performance targets and measure incremental success in vital areas of the business.
To track KPIs is to gain greater business intelligence. Through visual KPI tracking tools such as a KPI dashboard, you uncover greater insights than you ever thought possible, streamlining your organization for success in an increasingly competitive digital landscape.
In that sense, KPI tracking tools are a powerful vessel for organizational growth and evolution.
What Are The Benefits Of KPI Tracking?
Now that we’ve established what key performance indicator tracking is, let’s look at the business-boosting benefits.
If you use a KPI tracker to its full potential and work with metrics that are relevant to your business’s core mission, you will reap incredible rewards. To put this into perspective, here are the main benefits of using a KPI tracker for your business:
- Intelligence: To prevail on today’s business battlefield, making consistently informed decisions based on relevant metrics is a must. Knowing how to track KPIs will empower you to improve your business strategies in a way that will ultimately save you time and money while fostering a level of innovation that will allow you to stand out in your field.
- Benchmarking: One of the most powerful functions of committing to track KPI metrics is gaining the ability to benchmark. KPI tracking software gives businesses the tools to set informed goals and benchmarks. By setting intelligent goals for your organization, you will be able to evolve, scale, and refine your most vital processes while becoming more adaptable to change.
- Innovation: Working with KPI tracking software offers insight that empowers you to spot and uncover trends or patterns that you otherwise wouldn’t notice. When this happens, you will be able to unlock a level of creative thinking that will improve innovation throughout the business. When companies gain the ability to innovate, they often become thought leaders in their field, building trust and boosting brand awareness in the process.
- Communication: KPI reports and trackers are visual and interactive, which means that they are incredibly inclusive. KPI tracking software serves up insights that everyone within the organization can understand, which ultimately enhances interdepartmental communication while unlocking the full potential of modern data storytelling.
- Motivation: By working with a KPI dashboard to set actionable goals, you will motivate staff and specific departments to make improvements to their processes, which, in turn, will increase productivity, performance, and motivation.
What Do Most Companies Use To Track KPIs?
So, what do most companies use to track KPIs? The short answer: smart tools and technology. To track KPIs and set actionable benchmarks, today's most forward-thinking businesses use what is often referred to as a KPI tracking system or a key performance indicator report.
A KPI report is a tool that facilitates the measurement, collection, arrangement, analysis, and study of essential business KPIs over certain periods. In the digital age, a solid KPI tracking system is visual, interactive, customizable, and accessible via a number of mediums, including mobile and desktop.
By using a smart KPI tracker to your advantage, you become empowered to identify potential strengths, weaknesses, patterns, and potential areas for improvement across all key areas of the business.
Usually presented in the form of an interactive dashboard, key performance indicator reports offer a digestible representation of critical business functions, from sales and marketing to finance, fulfillment, and beyond.
With interactive business KPIs, you will be able to get in touch with data in a way that gets real results - both retrospectively and in real-time. Key performance provides a panoramic snapshot of your business’s essential activities. We will go more in-depth about these types of tools and what you should expect before investing in one of them later in this post. But first, let’s look at some industry examples to put the power of KPI tracking into perspective.
KPI Tracking In Action: 5 Real-World Dashboards
Now that we’re clear on how tracking key performance indicators assist with enhanced business performance and got a first glance into which tools today’s companies use to track them, we’re going to look at 5 real-world dashboards that cover management, customer support, finances, logistics, and senior marketing so you can see in more detail how to track KPIs and add value in your business operations.
1. Management KPI dashboard
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- Customer Acquisition Costs
- Customer Lifetime Value
- Sales Target
When it comes to swift and informed senior decision-making, management KPIs are invaluable. Visually balanced and populated with essential operational metrics, our KPI tracking dashboard is equipped with actionable insights for sustainable business success.
With KPIs that offer a panoramic snapshot of performance in areas including sales, customer acquisition costs, and customer lifetime value, this powerful CEO dashboard offers a wealth of information geared towards helping senior executives formulate strategies that ultimately streamline core business processes while improving the business’s service and customer experience (CX) offerings.
2. Financial KPI dashboard
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- Working Capital
- Quick Ratio / Acid Test
- Cash Conversion Cycle
- Vendor Payment Error Rate
- Budget Variance
This KPI dashboard is full of essential metrics that focus on monitoring the financial health of a business in areas such as liquidity, invoicing, and budgeting. By tracking all these KPIs together businesses can manage to boost their financial strategies, keep operational costs at a minimum while still ensuring continuous growth.
Covering critical financial areas such as the current working capital, the cash conversion cycle, and the vendor error rate, this financial dashboard is an invaluable tool to closely monitor KPIs and answer vital questions about the business performance. Thanks to a mix of interactive graphs and charts financial managers can spot inefficiencies, make accurate forecasts and keep cash flowing through the organization.
3. Customer support KPI dashboard
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- Service Level
- Support Costs vs Revenue
- Customer Satisfaction
Whether you're a senior customer service manager, a frontline agent, or a service strategist, our dynamic KPI tracking dashboard boasts all of the tools of insights that will allow you to set business-boosting targets while doing your job more effectively.
The logical presentation of the dashboard above offers at-a-glance access to essential customer service-centric KPIs that drill down deep into functions like service levels, support costs, and overall customer satisfaction over specific time periods.
This is a powerful KPI tracking tool that helps businesses make significant improvements to their customer support strategies regardless of their sector or industry. For additional insights on different aspects of customer service, you can explore our article focused on a call center dashboard.
4. Pick & Pack KPI scorecard
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- Pick & Pack Costs
- Pick & Pack Cycle Time
- Picking Accuracy
- Use of Packing Material
- Equipment Utilization Rate
Our next example is a KPI scorecard for the logistics industry. A scorecard is a KPI tracking tool that monitors the progress or achievement towards a set target, making it an invaluable tool for KPI monitoring. Decision-makers use this format to visualize different metrics together and get a bigger picture of their overall performance as well as find any bottlenecks in the process.
Divided into four main areas that track logistics KPIs for finances, effectiveness, utilization, and quality, the pick and pack scorecard will tell you if your picking and packing processes are running smoothly compared to a target of last month’s results. Paired to this, the scorecard offers details about the performance of each line of work. This way you can see if there is an underperforming line and find the reasons, or implement different strategies on each line to test which one works better for your warehouse. Like this, you can optimize costs as well as key processes to ensure great order management and quality of service.
5. CMO dashboard
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- Sales Target & Growth
- Website-Traffic-to-Lead Ratio
- Cost per Lead
- Lead-to-MQL Ratio
- MQL-to-SQL Ratio
In today's fast-paced, ultra-competitive digital age, if you want to cut through the noise and connect with your audience on a meaningful level, being innovative and consistent with your marketing activities is essential.
As such, the job of the chief marketing officer (CMO) is challenging and demanding. From consumer demographics to website traffic, lead ratios, and beyond, when it comes to marketing, there is a colossal amount of data to sift through. Our marketing dashboard features KPIs that serve up relevant marketing metrics, allowing busy CMOs to streamline their data while extracting actionable insights at a swift glance.
For both ‘in the moment’ decision-making and long-term strategy, this robust KPI dashboard offers a wealth of information that empowers senior decision-makers to drive marketing success and innovation on a sustainable basis. But not only, with this dashboard, you can also create powerful marketing reports that will skyrocket your whole departmental performance.
How To Track KPIs?
Now that you saw some KPI tracking examples in action, you must be eager to start benefiting from this business intelligence practice. To help you achieve KPI tracking success, we put together a few tips and tricks to guide you through the process.
1. Set your business goals
The first and most important step before starting with your KPI tracking is defining clear business goals. What might work for some companies might be completely different from others, for this reason, you need to set realistic targets that will allow you to monitor if your company is growing as you expected. Once you have your core business goals in place you also need to define specific ones for each department of the company. This way, you will be able to easily pick the right KPIs to track the performance of each department as well as carry out cross-analysis between them.
2. Define your audience
Now that you have your business goals defined, you will be one step closer to start performing powerful KPI monitoring. But before you dive into picking your KPIs you also need to think about your audience and what will be more efficient for them. For this purpose, you can ask yourself questions like What data is important for these people? How frequently do they need to check it? Are these KPIs providing context?
3. Follow BI KPI tracking best practices
Once you have defined clear business goals and your audience it's time to pick which specific KPIs you want to track in order to monitor and achieve those goals. For this purpose, there are two KPI best practices from the business intelligence industry that you can follow to define the best performance indicators for your business.
- SMARTER: This is a KPI tracking practice that stands for Specific, Measurable, Attainable, Relevant, Time-bound, Evaluate, Reevaluate. It basically works like a checklist that your KPIs need to follow in order to be considered relevant for tracking. As you can see they need to be specific to a business goal, relevant and attainable to your business, and be in continuous evaluation.
- Six A’s: The second KPI tracking best practice you could implement is the Six A’s which stands for Aligned, Attainable, Acute, Accurate, Actionable, Alive. Just like the SMARTER criteria, this practice also aims to evaluate the relevance of a KPI based on some key characteristics. In this case, the KPI is expected to be aligned with your business goals, keeping everyone in the company informed, actionable, and evolving with the business.
4. Use a mix of real-time and historical data
With the right KPIs in hand, it is time to start analyzing. To extract the actionable insights you need from your KPI monitoring you need to take into consideration historical data as well as real-time data. One on hand, historical data will let you spot trends and compare performance to see if you are improving, and on the other hand, real-time data will give you a glance at your current performance and allow you to spot any difficulties before they become bigger issues.
5. Use the right visualizations
Last but not least in your process to track KPIs is to pick the right type of visualizations for each of your metrics. There are several types of graphs, charts, and business dashboards available for you to visualize your data, the goal here should be to pick the ones that will make the analysis process most interactive and easy to understand for technical and non-technical users. Static excel tables are no longer useful to extract the maximum power out of your analysis. This is why you should invest in KPI tracking tools that will provide you with a wide range of visualizations types to fit each of your goals and to support decision-making discussions. More on this point in the next section of this post!
What Are The Top Features A KPI Tracking Software Should Include?
We already introduce you to the general concept of KPI tracking tools earlier, now we will go more in detail into the specific features you should look for when deciding on which KPI tool you want to invest in.
- Data connectors
The first and arguably the most important feature you should consider when choosing a KPI tracking software is the possibility to connect all your internal and external data sources into one single point of access. This can be social media data, historical databases, CRM tools data, or any other source of information that is useful for your business. By doing so you will be able to perform cross-analysis between the different departments and exceed your KPI analytics goals.
Among other things, data connectors will also save you and your employees time on manually updating the data as the tool will automatically provide the latest information available for successful KPI monitoring.
- User-friendly interface
In today’s modern world, data analysis is no longer intended only for analysts or data scientists to perform. On the contrary, a business that wants to be successful by leveraging the power of their data needs to invest in tools that are accessible for everyone in the company. For this reason, one of the main features that a KPI tracker should include is a user-friendly interface that will enable anyone from technical to non-technical users to take advantage of the latest data for better decision-making.
- Advanced KPI analytics
Paired up with a user-friendly interface, a KPI tracking software should also include advanced analytical features for technical users that want to go an extra mile with the data. Being able to perform advanced analysis in distinct databases such as marketing data, CRM, ERP, or common SQL databases such as MySQL, PostgreSQL, Oracle, and MS SQL can lead to deeper insights into the performance of your KPIs and help fine-tune your business strategies. Some of these features could include cross queries, custom fields & expressions, data predictions, trend analysis, among others.
- Predictive analytics & AI
With so many KPIs to track and so little time to do so, the KPI tracking system you decide to invest in should also include advanced technologies such as predictive analytics and artificial intelligence to make your life easier. On one hand, predictive analysis gives you a glance into the future by taking historical data to predict a possible outcome in your performance. And on the other hand, AI technologies such as datapine’s intelligent alarms will use neural networks to learn from trends and patterns to find any anomalies in your data. You just need to set predefined goals and the tool will immediately notify you if something is not going as planned.
- Interactive KPI dashboards
If you saw our list of KPI dashboards above, then you must be aware of how these powerful visualization tools can take your KPI tracking to the next level. For this reason, when picking a KPI monitoring tool you should make sure it includes a powerful dashboard designer with basic and advanced features that will allow you to interact with your data and measure your key performance indicators to deliver the best results.
- Sharing options to promote collaboration
Following on the accessibility point mentioned above, another important feature you should look for in a professional KPI tracker is advanced sharing options. KPI tools such as datapine, provide several sharing capabilities such as live links with distinct viewer rights, scheduling of reports on defined time periods as well as the possibility to download the data and share it in different files formats such as PDF, CSV, XLS, or PNG file. Sharing your KPI reports and dashboards between teams will build a strong data-driven culture in your organization that will increase overall productivity in the long run.
Key Takeaways KPI Tracking
It doesn’t matter what you specialize in or what you’re selling – in the Age of Information, making your most valuable business data work for you is vital. It’s no longer good enough to simply glimpse at gargantuan chunks of organization and hope for the best. In these modern business times, you must extract every last drop of value from the metrics that matter.
By setting the right key performance indicators for your business and working with the right tools, you will be able to measure your existing success while setting essential benchmarks and analyzing past data to gain a level of intelligence that will propel your business to the next level. But it doesn't end here; if you work with multiple clients and stakeholders, you can utilize client reporting tools and consolidate all your tracking needs under a single place.
To track KPIs is to conduct your daily, weekly, and monthly organizational activities in a way that is strategic and ensures that every move you make offers real business-boosting value. The more you measure your KPIs, the more cohesive and intelligent your company will become. And in a time when the competition is fierce, utilizing your data to its maximum capacity will set you apart from the pack.
We hope our key performance indicator tracking guide has inspired you to take charge of your data. If you want to use a professional and modern solution to track your metrics, you can signup for datapine for a 14-day trial, completely free!