In the business world, it is not uncommon for managers to learn from their colleagues. A KPI forum is one avenue where learning and exchange of ideas take place. This online meeting of people sharing a common interest is deemed to be one of Internet’s greatest gifts to mankind.
KPI is actually an acronym of the words, key performance indicators. These are metrics used by organizations to determine where they are in terms of overall organizational objectives. These may be financial or non-financial in nature and may differ from one group to another depending on the implemented strategy of a company as well as the nature of the organization. For example, if the organization is a social service organization, the number of people who were beneficiaries of company projects could be a relevant KPI. However, for other organizations, annual sales volume may be a relevant success factor.
It is vital for every organization to determine correct and important KPIs to ensure the effectively and efficiency of all business processes. When identifying crucial KPIs, the acronym SMART frequently comes to mind. This acronym stands for the characteristics that KPIs should have, which are as follows: Specific, Measurable, Achievable, Result-Oriented and Time-based. Aside from these, it is also a major concern for organizations to ensure that data related to KPIs are consistent and accurate as well as readily available. Otherwise, incorrect analysis of organizational performance may result.
Possible indicators of organizational success can be categorized into four distinct groups. They can be quantitative indicators which mean that they can be presented as numbers or they can be practical indicators which make them evident in existing organizational activities or processes. These indicators may also be directional in nature which means that they determine whether the organization is improving or not or they may be actionable indicators which are capable of determining in what way an organization can effect change to improve overall performance. KPIs may take the form of regional or district sales figures or trends, information on supply chain activities, personnel statistics and trends, and any other information that is crucial to an organization’s success. These data are most often presented in reports, charts and spreadsheets. Given the nature of these vital data, many companies have equipped themselves with special software that makes it easier for them to track and monitor relevant data associated with organizational KPIs. The digital dashboard or executive dashboard is one of the business management tools that are frequently used by managers. These dashboards display data from various business systems to guide them in decision-making. These may be used to monitor all organizational functions including recruiting, sales, operations, information technology, human resources and customer relationship management.
The dilemma of most business managers is the identification of relevant KPIs. This is brought forth by the realization that the identification of incorrect performance indicators could be fatal for any company. In KPI forum online, it is noted that managers exchange ideas about which indicators would be most useful. They also exchange ideas about how to improve overall performance of business organizations.