Of course, any business needs to a tool that provides a way to measure how well companies, business units, projects or individuals are performing in relation to their strategic goals and objectives, this exactly what KPIs provide.
What is KPIs
It refers to Key Performance Indicators, it is a business tool that provides a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.
KPIs provide the most important performance information that enables organizations to understand whether or not the organization is on track toward its stated objectives. In this way, well-designed KPIs are vital navigational instruments, giving a clear picture of current levels of performance and whether the business is where it needs to be.
Importance of KPIs
1- navigational tools
it used as a navigation tool that managers use to understand whether the business is on a successful voyage or whether it is veering off the prosperous path. The right set of KPIs will shine a light on the key aspects of performance and highlight areas that may need attention.
2- decision-making tools
the most effective KPIs are closely tied to strategic objectives and help to answer the most critical business questions. A good starting point is, therefore, to identify the questions that the decision makers. then, you can select or develop the right KPIs that best help answers those questions.
How to write and develop key performance indicators
When writing or developing a KPI, you need to consider how that key performance indicator relates to a specific business outcome or objective. Key performance indicators need to be customized to your business situation and should be developed to help you achieve your goals. you can follow these steps when writing:
- Write a clear objective for each one
- Share them with all stakeholders
- Review them on a weekly or monthly basis
- Make sure they are actionable
- Evolve them to fit the changing needs of the business
- Check to see that they are attainable
- Update your objectives as needed
Basically, Key Performance Indicators or KPIs act a measure your performance against key business objectives. let’s identify it in more details