[Free Whitepaper] How to Improve Your Business with KPIs

What Gets Measured, Gets Managed
If there’s one thing all companies have in common, it’s the 6 key areas they should be tracking in order to monitor the health of the business. In business school, you learn that you can’t manage what you don’t measure, and identifying important metrics are the first step in your corporate benchmarking. By identifying, measuring, analyzing and evaluating your programs, processes and procedures, and then implementing solutions for each, you’ll make great strides towards an important part of your growth and development.

Key Performance Indicators (KPIs) are necessary and useful tools for businesses that want to track and monitor their growth... or identify their areas of weakness and opportunities for growth. A business that has a well-defined mission and vision, clearly defined goals, and strategies for improvement can use KPIs to evaluate and measure its progress. While every business has different priorities, the tools they use to measure their success and progress are often very similar. Generally, businesses are looking to evaluate their performance in the following areas:

• Finance
• Customers
• Sales
• Marketing
• Operations
• Employees

In addition to reflecting your business priorities and goals, your KPIs must be quantifiable. Your data doesn’t mean anything if you can’t measure it, analyze it, and use the information to fine tune your strategies. Make sure your KPIs are clearly defined, transparent, measurable, and include a targeted goal for each indicator.

Where to Start: Types of KPIs
While businesses and organizations tend to organize their Key Performance Indicators around similar themes, the specifics of their data and metrics vary by industry and business. Common KPI models include:

• Quantitative Indicators, which are measured by a number.
• Qualitative Indicators, which cannot be measured by a number. These are sophisticated pieces of data, but can be very valuable if you need to get a handle on the “why” as opposed to the how of your questions.
• Leading Indicators can be used to predict the outcome of your process
• Lagging Indicators are used after the fact to reflect success or failure of your initiative.
• Input Indicators measure the resources used during the process, like staff time and cash.
• Process Indicators gauge the efficiency of the process, and are effective when measuring customer service initiatives, shipment strategies, and training.
• Output Indicators measure the success or failure of the process and are good KPIs for establishing marketing, sales, and human resources benchmarks.
• Practical Indicators work within existing company processes or infrastructure, and explore pieces of the corporate puzzle.
• Directional Indicators evaluate a company’s trend information; are they improving, declining, or maintaining. These benchmarks are often used to evaluate your company’s position in the industry and relative to your most director competitors.
• Actionable Indicators reflect a company’s commitment to change and course correction, and includes commitment to cultural change, environmental sustainability, or political action.
• Financial Indicators measure the economic stability, growth, and viability of the business, and are a good place to begin your KPI experiment.

With an understanding of what types of measurements are available, and a clear plan for implementing an evaluation tool, you can fine tune your KPIs to measure specific areas of your business. Key Performance Indicators and metrics are not one size fits all, so you’ll need to adjust and fine tune your metrics to get the results you need and accurately reflect your business priorities.

Featured Download: For more information on the 6 areas that businesses should evaluate, including finance, customers, sales, marketing, operations and employees, check out our KPIs for MSPs whitepaper:

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