Key performance indicator (KPI) measurement helps you manage both your financial and non-financial data. You can measure your team’s performance as a whole or on an individual performance basis.
This can bring a sense of shared accountability, whilst informing your team, or an individual, as to where improvements can or need to be made.
We recommend tailoring your measures to suit your business.
Every business, including yours, is unique. While some KPIs (such as margins, percentage of sales) will be suitable for many companies, the majority of your KPIs should be bespoke to your business and with the focus on making your numbers work.
How do you decide on the right KPI’s for your business?
What are your main goals and objectives? What targets or activities have to happen to deliver these goals? How do you then measure the performance in these areas? This will help you identify what is important to measure and keep you on the right journey.
Your KPI measurements are likely to include your actual performance and what you expected to, or need to, achieve. So accurate financial record keeping and an effective forecast are important.
Much research suggests that your KBI measures should be SMART:
- Are they Specific to your objective?
- Can you Measure your progress towards your goals?
- Is your goal Attainable?
- Are they Relevant to your business goals?
- What’s the Timeframe for achieving your goal?
Your actual performance as a review against the predicted or desired outcome is often the starting point. Look for trends and complimentary data in your KPI results. It is the analysis and interpretation of your KPI results that will better support your decision making in the future.
If you would like to discuss your business improvement using key performance indicators, then please contact us on 01865 379272.