September is coming to a close and the festive season is near. Businesses around the world are now ramping up operations – aiming to close the year on a high note.
But what does a “high note” mean for a business? Enter KPI (Key Performance Indicator), a way for businesses to measure its success relative to objectives that have been set out. The ubiquitous terminology heard in meeting rooms across the world is so popular that in a survey with over 3,000 companies, more than 77% use KPI to manage performance in the company.
While it is the most common, effective KPI setting is an art that when done properly, steers businesses towards larger goals like a navigational map. Here we explore some of the considerations when setting KPIs.
#1 Focus on the overall strategy
In a guide by EY, KPIs without clear linkages to the company’s objectives may be a sign of a lack of strategic focus. To remedy this, it is important for any business to ask – what is this KPI trying to achieve? This answer then becomes the foundation of KPI setting. For example, if a company wishes to increase its revenue for the year, KPIs could be built around that desired result by focusing on the processes involved in generating revenue.
#2 Measure it
Information is valuable, but too much is detrimental. One of the largest pitfall for any business is the inclination to measure everything when setting KPIs – regardless of its usefulness to the business. Without a clear measure that determines its success factor, KPIs lose its effectiveness as energy, time and resources are spent on aspects that does not contribute to the overall objective. Thus identifying which measure that is most relevant becomes paramount in KPI setting – using our previous example, measures such as the number of closed leads would become critical in increasing revenue.
#3 Break it down
While KPIs vary between businesses, its final form is always broken down into specific, quantifiable and achievable tasks. This is crucial as KPIs, like objectives, are result-based (e.g. 20% increase of closed leads) as opposed to activity-based (e.g. implement a tactical promotion). Hence effective KPIs paint a clear picture of success – with a balance between being challenging but realistic, within a set timeframe.
We at Supahands are driven by KPIs to deliver optimal results to our clients. Whether it is time sensitive tasks or large amounts of data processing, we strive by setting clear and achievable goals – with our clients only paying for the work that has been completed!
If you’re looking to bring success to your projects with us – get in touch today!