No matter which department you are in, KPIs are vital to grasp the status of your business to make the right calls. How can you tell which KPIs are relevant? Which are going to help you and which will cause distraction?
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We have identified the KPI examples that are most relevant for each department. Take advantage of our metric library to identify and visualize the metrics that are most important to your area of business.
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Tracking the right KPIs is a huge step forward for any company - but why stop there? With datapine, identifying is just the first step. Explore, visualize and efficiently communicate your insights across your company and induce more informed decisions enterprise-wide.
Once you have set up the right KPIs, datapine provides you a comfortable, clean interface to keep an eye on them. Our software helps you to get rid of the time consuming process of constantly having to log into databases, cross-referencing information and pulling out data from third party applications to make sure you are always up to date.
Your KPIs can be accessed in real-time, from anywhere, at any given time. We make sure that you always have the most relevant figures in front of you, whenever you need them. An enterprise-grade user management combined with several sharing concepts and scheduled automated reports empower everyone in your company to have constant access to relevant KPIs and make more informed decisions.
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Key performance indicators (KPIs) are sets of quantifiable measures that can be used to determine how effectively a company is achieving its key business objectives, thus evaluating its progress or success at reaching strategic and operational goals. Depending on which part of the business you would like to analyze, you have to select different KPIs.
For example, if you want to track the financial performance of your company, you might use the return on equity ratio. If you would like to analyze the performance of sales, you might use the lead conversion ratio. From this example it is obvious that KPIs represent detailed specifications that are used to analyze the objectives of the organization. It is essential to select the right KPI for a previously specified target in order to measure success. Since these indicators measure performance against a specific target, they help a company, department or manager to instantly react to any events that might impact the business. They also help the company to focus on a common goal.
Obviously there are many types of KPIs, depending on the specific target and the best indicator to measure it. The broadest distinction is to separate the different types into nonfinancial and financial KPIs. The second refers to all indicators that have to do with the cash flow, debt and assets of a company. For example, the profit margin, which measures the net profit in percentage of revenue, or the current ratio, which is the ratio of current assets to current debts. The former refers to all indicators that are not directly related to the cash flow, debt or assets of a company. A more specified distinction of KPI types is the following:
Quantitative vs Qualitative indicators: First can be expressed as a number, second use qualitative measures.
Lagging vs Leading indicators: Former indicate the source of success or failure and leading indicators are used for forecasts.
Input vs Output indicators: First measure the resources consumed for a given output and second the outcome of a process.
Process vs Actionable indicators: The former are used to measure efficiency or productivity of a specific business process and actionable indicators are mainly used by key decision makers of a company to effect change.
Another way is to distinct the different types into departmental indicators, such as indicators for sales (for example sales growth), marketing (for example return on investment) or finances (for example current ratio) like we did in our KPI examples above. To learn more check out our KPI templates for the different business departments.
There are several ways to classify the different types of indicators. The difference between all types is that they measure different performances, thus being only compatible with a specific target. The essence is to choose the right one, which measures the performance or success of your specific target the best. Thus, you have to know exactly what would like to measure.
To choose the right indicator for your specific target can be very difficult. But there are two main KPI best practices, which help you to find the right one. A way to evaluate the relevance of a KPI is to use the SMARTER criteria (Specific, Measurable, Attainable, Relevant, Time-bound, Evaluate, Reevaluate). The long version of SMARTER means a specific objective, the measurability of the progress towards that goal, the realistic attainability of the target, the relevance of the target to your company, the time-frame for achieving the target and the continuous evaluation and reevaluation of the KPI.
The second KPI best practice is the six A´s (Aligned, Attainable, Acute, Accurate, Actionable, Alive). The six A´s mean that the indicators are aligned with your specific targets, the data, which are used for the indicators, can be easily attained, the indicators keep everyone informed (acute) about the current situation, the data used to obtain the KPIs are accurate, the insights in the business given by the indicator is actionable and the indicator should evolve with the business (alive).
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