KPI (Key Performance Indicator) - What is it ?
A KPI, or Key Performance Indicator, allows you to measure your company's performance numerically. It can be a number or a percentage. It allows you to accurately assess how close you are to your objectives.
It is possible to use KPIs to measure all the important performances for your company. Examples include not only financial performance, but also the quality of the customer experience, the success of a product, or the operational efficiency of the company.
Obviously, KPIs vary according to performance criteria. They will therefore differ from company to company and from sector to sector. However, these tools are now commonly used in the vast majority of companies.
KPIs can be used to measure progress towards the company's main objectives, such as revenues or the number of customers. They can also be used to monitor more specific performance metrics such as customer service response time or the cost per acquisition of the marketing team.
These indicators can also be used to measure the performance of a particular project. They can even be used to track the performance of a single individual in the tasks assigned to him or her.
The various KPIs therefore determine the success of the company on a strategic, financial or operational level. In particular, they help to compare with other companies in the same industry.
Generally speaking, the main purpose of the KPI is to help the company make better decisions and improve its performance. It helps to clarify objectives and therefore helps teams to focus on them while maintaining their motivation.
By offering the opportunity to track progress over time, the KPI also allows for real-time adaptation by identifying the strengths and weaknesses of a strategy.
There are thousands of different KPIs, so it can be difficult for a company to select the most appropriate ones to meet its needs. However, it is important to choose carefully, to avoid measuring relatively useless performance that can be confusing and therefore counterproductive.
To present KPI-related analyses to decision-makers or shareholders of the company, a dashboard or "KPI dashboard" can be used. This communication medium helps to highlight the information to be retained following the analysis, so that decisions can be made quickly based on the data.
In this example, you can easily track the profit and loss for each area of your business:
