How to build a system of work according to KPI
Posted: Mon Dec 23, 2024 6:25 am
Any path (if we are not talking about the boundless Tao) always has a goal. However, in addition to the goal, the path must be marked with markers, otherwise it is easy to get lost - and therefore not achieve the desired goal. In business, such markers can be KPIs - they help track the team's work and correlate it with the desired direction of the company's development.
What is KPI
KPIs, or Key Performance Indicators, are a way to measure the efficiency of employees and evaluate both the intermediate and final results of this work. In simple terms, these are indicators that show whether you are on the right path to your strategic goal. Moreover, the most specific and measurable indicators, thanks to which you can easily evaluate how close you are to success and what it looks like. By translating success into quantitative KPI performance indicators, you can see a clearer picture of the business and, if necessary, adjust your actions.
Additionally, KPIs enable informed decision-making taiwanese phone numbers based on data rather than gut instinct, and provide transparency into operations: when employees or teams have defined KPIs, they are more likely to feel accountable for their work and understand how best to perform it.
Having KPIs also allows you to compare your results to industry standards, competitors, or your own historical data. This helps you understand whether your current strategies are working or whether they need to be optimized.
What is the difference between KPIs and business indicators?
KPIs and business indicators are similar in nature, but they serve different purposes. Indicators are a broader category that includes all quantitative data that allows you to measure performance, track development, and analyze various aspects of a company’s operations. This data can come from a variety of areas: profit, website traffic, customer satisfaction, employee turnover. They create a broad picture of the current state of the business and are not always directly tied to strategic goals, but they can be used to monitor operations and create a basis for more detailed analysis.
KPIs are a set of business indicators chosen for their connection with the company's strategic goals. These are key metrics that directly affect business performance and allow you to track its success.
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Why KPIs are so important
Clarity and transparency
A race track is usually marked with flags that help you navigate and go in the right direction. If these flags are not placed correctly or do not meet the standards, the drivers risk flying off the track. The same principle applies to KPIs: the indicators must be understandable (“meet the standards”) and correct (“placed correctly”). For example, you can measure the number of hours worked by sales managers or the amount of paper they use, but this may not provide any useful information for the business – or it will, if we are talking about the ratio of working hours to the number of customers served.
Making Data-Driven Decisions
By regularly monitoring the metrics that matter most to the business, a company can develop strategies based on hard data rather than gut instinct. This means that any decision or investment will have “digital” confirmation of its effectiveness, increasing the likelihood of achieving the set goal.
Impact on productivity
There are thousands of metrics that can be measured, but only a few of them have an impact on the actual performance of employees and their productivity. So it is worth evaluating those indicators that affect the organization’s activities and the achievement of its strategic goals. It is also worth remembering that resources - time, people, financial - are finite. KPIs help determine which strategies or tools provide the best return on investment (ROI). This helps optimize the allocation of resources and ensure that they are directed to those initiatives that will bring the most noticeable results.
Employee performance
The KPIs you choose determine the focus of your employees: they will strive to achieve them, and their behavior will change accordingly. If the wrong indicators are chosen, the focus will be directed in a direction that is disadvantageous for the business. Let's take a grocery store as an example: if you choose a KPI to reduce the volume of expired goods, there is a risk of losing part of the profit due to a large number of promotions on products with an expiring shelf life. If the focus is on ensuring the freshness of goods, then the best solution would be to optimize the supply process so that goods with an expiring shelf life simply do not appear in warehouses.
Continuous development and growth
The purpose of KPI is to identify the strengths and growth areas of a business. Regular analysis of reports allows you to identify areas that need the most attention, adjust existing strategies and constantly improve your approach. “Act a little better every day” is the key to stable growth and competitiveness in a dynamic market.
Integrations
OMNIwidget
Virtual PBX
How to Choose the Right KPIs
The main rule to follow is compliance with the SMART principle: specific, measurable, achievable, realistic and time-bound. This allows for more precise tracking of implementation and comparative analysis by periods.
Another rule is simplicity. KPIs should be as simple and clear as possible so that employees can clearly see what they should strive for.
There are three mistakes to avoid:
Evaluate the KPIs that you have always measured . This often blocks possible business development prospects and does not allow you to see new opportunities that can lead to profit growth.
Assess the easiest to measure indicators . When choosing a KPI, you should approach it not from the position of "we can measure it, so we take it," but from the position of "it affects strategic goals, so we take it."
Choosing too many KPIs . There is no clear limit, but the best option is 5-7 main KPIs covering high-level business goals. Along with them, there may be additional metrics to evaluate the performance of specific departments, campaigns or employees, allowing you to measure their effectiveness more precisely. But these additional metrics must be embedded in a more global picture to ensure transparency and focus on the most important points of the strategy.
What is KPI
KPIs, or Key Performance Indicators, are a way to measure the efficiency of employees and evaluate both the intermediate and final results of this work. In simple terms, these are indicators that show whether you are on the right path to your strategic goal. Moreover, the most specific and measurable indicators, thanks to which you can easily evaluate how close you are to success and what it looks like. By translating success into quantitative KPI performance indicators, you can see a clearer picture of the business and, if necessary, adjust your actions.
Additionally, KPIs enable informed decision-making taiwanese phone numbers based on data rather than gut instinct, and provide transparency into operations: when employees or teams have defined KPIs, they are more likely to feel accountable for their work and understand how best to perform it.
Having KPIs also allows you to compare your results to industry standards, competitors, or your own historical data. This helps you understand whether your current strategies are working or whether they need to be optimized.
What is the difference between KPIs and business indicators?
KPIs and business indicators are similar in nature, but they serve different purposes. Indicators are a broader category that includes all quantitative data that allows you to measure performance, track development, and analyze various aspects of a company’s operations. This data can come from a variety of areas: profit, website traffic, customer satisfaction, employee turnover. They create a broad picture of the current state of the business and are not always directly tied to strategic goals, but they can be used to monitor operations and create a basis for more detailed analysis.
KPIs are a set of business indicators chosen for their connection with the company's strategic goals. These are key metrics that directly affect business performance and allow you to track its success.
Increase sales with the UIS communication system
A reliable cloud telephony operator: our own number capacity and the #1 technical support on the market.
Manage communications, control employees and automate the sales department.
Get a consultation
Why KPIs are so important
Clarity and transparency
A race track is usually marked with flags that help you navigate and go in the right direction. If these flags are not placed correctly or do not meet the standards, the drivers risk flying off the track. The same principle applies to KPIs: the indicators must be understandable (“meet the standards”) and correct (“placed correctly”). For example, you can measure the number of hours worked by sales managers or the amount of paper they use, but this may not provide any useful information for the business – or it will, if we are talking about the ratio of working hours to the number of customers served.
Making Data-Driven Decisions
By regularly monitoring the metrics that matter most to the business, a company can develop strategies based on hard data rather than gut instinct. This means that any decision or investment will have “digital” confirmation of its effectiveness, increasing the likelihood of achieving the set goal.
Impact on productivity
There are thousands of metrics that can be measured, but only a few of them have an impact on the actual performance of employees and their productivity. So it is worth evaluating those indicators that affect the organization’s activities and the achievement of its strategic goals. It is also worth remembering that resources - time, people, financial - are finite. KPIs help determine which strategies or tools provide the best return on investment (ROI). This helps optimize the allocation of resources and ensure that they are directed to those initiatives that will bring the most noticeable results.
Employee performance
The KPIs you choose determine the focus of your employees: they will strive to achieve them, and their behavior will change accordingly. If the wrong indicators are chosen, the focus will be directed in a direction that is disadvantageous for the business. Let's take a grocery store as an example: if you choose a KPI to reduce the volume of expired goods, there is a risk of losing part of the profit due to a large number of promotions on products with an expiring shelf life. If the focus is on ensuring the freshness of goods, then the best solution would be to optimize the supply process so that goods with an expiring shelf life simply do not appear in warehouses.
Continuous development and growth
The purpose of KPI is to identify the strengths and growth areas of a business. Regular analysis of reports allows you to identify areas that need the most attention, adjust existing strategies and constantly improve your approach. “Act a little better every day” is the key to stable growth and competitiveness in a dynamic market.
Integrations
OMNIwidget
Virtual PBX
How to Choose the Right KPIs
The main rule to follow is compliance with the SMART principle: specific, measurable, achievable, realistic and time-bound. This allows for more precise tracking of implementation and comparative analysis by periods.
Another rule is simplicity. KPIs should be as simple and clear as possible so that employees can clearly see what they should strive for.
There are three mistakes to avoid:
Evaluate the KPIs that you have always measured . This often blocks possible business development prospects and does not allow you to see new opportunities that can lead to profit growth.
Assess the easiest to measure indicators . When choosing a KPI, you should approach it not from the position of "we can measure it, so we take it," but from the position of "it affects strategic goals, so we take it."
Choosing too many KPIs . There is no clear limit, but the best option is 5-7 main KPIs covering high-level business goals. Along with them, there may be additional metrics to evaluate the performance of specific departments, campaigns or employees, allowing you to measure their effectiveness more precisely. But these additional metrics must be embedded in a more global picture to ensure transparency and focus on the most important points of the strategy.