Key Performance Indicators (KPIs) provide your business with a measure of how well it’s tracking against its strategic objectives. They are important but can be damaging to business success if not properly managed. Here are key features and benefits to look for in a KPI management software solution.
What are KPIs and what is KPI management?
Key Performance Indicators (KPIs) are performance measures, set up in terms of your key business objectives. KPIs are those metrics that signal whether your business is performing well or not.
Consequently, it is crucial to determine what makes business performance indicators “key” and worth measuring considering your primary business objectives.
KPI management is the process of determining key indicators, performing tasks associated with those indicators, monitoring the outcomes of those tasks, and analysing the data captured from those outcomes.
The measuring fundamentals are not very different from other standard scientific evaluation methods: a question is asked, a goal is set, a quantifiable means of achieving that goal is found, all of this is tested and then retested for consistency.
Why are KPIs important?
KPIs provide insight into your company’s ability to set and achieve goals. It is an internal measure to see whether basic business systems are in place and to measure how well you listen to, understand and meet your customers’ needs.
4 questions to ask when choosing KPIs
1. Should it be measured?
Just because it can be measured doesn’t mean it should be measured. Some things are easier or more interesting to measure but if they aren’t relevant to your business goals, don’t measure them. Measuring what is useless may be damaging to your business. It wastes resources like money, time, attention that could have been spent elsewhere and focuses business activities on the wrong things. As they say – what you measure, grows – we need to make sure we are paying attention to the right things.
2. Should KPIs become incentivised targets?
KPIs are set to help your business orientate towards a desired future. Using them as incentives creates the danger of turning the KPI process into a series of targets, rather than a navigation tool to guide your business towards success. It may even promote the manipulation of information or employee behaviour to ensure short term numbers are met, rather than long term strategic growth.
3. How many KPIs are too many?
As mentioned earlier, what you are aiming to identify are KEY performance indicators, NOT ALL performance indicators.
KPIs might grow or evolve as your business grows or evolves. You might have seasonal KPIs set per project or term, KPIs that are standard to your industry, different KPIs set by different managers, and before you know it each employee have more than ‘key’ indicators to worry about. Make sure, for instance, that no employee has more than 5 KPIs to keep track of, before they lose sight of what is important.
4. Should we set relevant industry KPIs or create our own?
Are your business goals exactly the same as everyone else’s in the industry? If not, it’s wise to tailor your KPIs to your specific business goals. Remember, you want to measure whether you’re achieving what you set out to do. Set your KPIs according to what aligns with your strategy.
Which key features and benefits to look for in a KPI management software solution
- User-friendly and accessible to everyone within the organisation
- Offer clear and concise data visualisations that are easy to interpret
- Centralises all the data and insights you need in one space – no need for spreadsheets and over-complex files
- Organises data in a neat and clear way that benefits your business the most
- Provides the option of managing KPIs effectively online and on mobile devices
- Offers the necessary level of user support
- Provides a methodical approach to generate KPI reports
- Reduces time spent on collecting and analysing KPI data by automating processes
- Integrates ERP and CRM systems to have all your business information in one central place
Examples from the sales field
Better managerial decision-making
Accurate, updated reports provide managers with a much better perspective of what is happening in the field making it easier to make good decisions and respond to problems with working solutions. ‘Management has improved so much, it’s incomparable,’ shares SafeTop’s retail general manager Adele Norman.
Thanks to Skynamo’s mobile software solution, managers are now directly involved during store visits and display set-ups. SafeTop was able to align merchandiser KPIs with what is more useful to managerial decision-making.
‘One example of such a KPI is taking photographs at every store display, giving managers direct access to in-store activities via the app. Managers can now see and comment on displays while a rep is doing a store visit. Managers are effectively able to assist in the set-up of store displays by making real-time comments on the photos uploaded by reps,’ explains Norman.
Read the full SafeTop case study here…
Tracking KPIs and managing sales performance
Ernest Lowe set various KPIs for their reps, including: the amount of calls made on a weekly basis, the amount of time spent with a customer (face-time), the number of quotations generated, and the number of orders received.
‘Skynamo enables our reps to estimate the amount of clients they need to visit per month in order to accomplish sales goals, based on their average hit rate. They know that for a certain amount of customers they visit, they can expect a certain amount of enquiries and a certain amount of sales are likely to follow from those visits. They know when they are falling behind and need to put in more time with customers and when they are on track.’
Read the full Ernest Lowe case study here…
A brilliant brand management tool
Skynamo is used very effectively to set KPIs and measure brand performance. ‘It’s not about tracking our reps, but about tracking our brands and how they’re doing in the market,’ tells B2C Premium Drinks’ salesforce development manager, Derryn Maclear.
Now that managers understand where reps are underperforming and why, they can make better decisions about whether it’s worth selling a specific brand to a customer where the brand isn’t performing. ‘Our brands are pushed in the right direction and reps no longer find themselves barking up the wrong tree.
Read the full B2C Premium Drinks case study here…
Sources:
https://www.datapine.com/blog/kpi-management-and-best-practices/
https://www.klipfolio.com/resources/articles/what-is-a-key-performance-indicator
https://www.klipfolio.com/blog/best-practices-for-picking-business-kpis
http://www.dezzain.com/business/kpi-best-practices-to-consider/