KPI is shorthand for “key performance indicator”. Think of KPIs as your key business objectives, things like monthly sales goals, new customers or employee productivity outcomes. KPIs are a smart way for businesses to define their goals, to measure progress towards achieving them, and to make any necessary adjustments to those goals based on actual performance. Usually, KPIs are numbers, and generally those numbers are more or less complex depending on the size of your business.
Simplifying Your Data and Improving Performance with Dashboards
Most companies have multiple business objectives and to this extent manage a lot of data. KPI dashboards simplify all of that data into easy to read graphics, such as tables and charts. KPI dashboards are similar to other dashboards, like the one in your car that lets you quickly see important information like how fast you’re moving or how much gas is left in your tank.
KPI dashboards are useful tools that help a business improve performance by providing key information to the stakeholders who need it, when they need it. Dashboards can be restricted to only those employees who need the information, allowing companies to manage their data while keeping proprietary information secure.
One Size Doesn’t Fit All
Because every business has a unique mission and set of business objectives, the software which fuels KPI dashboards can be customized to reflect the goals specific to your business and industry. For example, a real estate business will probably need dashboards which reflect aggregate sales, total sales for each agent, prevailing interest rates, and socioeconomic data, among others. A construction firm, on the other hand, might want to see dashboards which include job costing data, outstanding bids, and current clients.
KPI dashboards are to some extent an educational tool, providing decision makers with the data that helps them understand their own business. More importantly, dashboards are an efficiency tool, allowing companies to better define their key objectives, monitor progress towards those goals and improve performance by making pinpoint strategic adjustments based on what they learn.