Benefits of a comprehensive KPI tool
KPI dashboards provide users with:
- A fast, easy solution to tracking KPIs and other business metrics.
- A unified view of data that improves visibility into company health.
- Customizable data visualization with performance and status indicators.
By building your KPI dashboard with the same tool or platform that you use to define your KPIs, you’ll have everything you need in the same place. As you modify your KPI definitions, data sources, or targets, these updates will populate automatically into your dashboards—saving you valuable time and effort.
What is a KPI?
A key performance indicator is a measurable value that shows how effectively you’re meeting your goals. Think of KPIs as your company’s scorecard, a way of measuring whether or not you’re delivering on your objectives.
Why KPIs matter
Identifying and tracking KPIs lets you know if your business is on the right path—or if you should change course to avoid losing valuable time and money. When used properly, KPIs are powerful tools that help you:
- Monitor company financial health.
- Measure progress against strategic goals.
- Spot problems early on.
- Make timely adjustments to tactics.
- Motivate team members.
- Make better decisions, faster.
So how do you begin to identify the KPIs that are important to your business? Start by clarifying your strategic objectives—collectively or by department.
These goals will help you identify which KPIs matter for your company. Picking KPIs that are relevant will depend entirely on these objectives and the ability you have to measure your performance against them.
Next, identify the KPI targets that you’re working toward, and how they’ll be measured. Keep in mind that these could be both short- and long-term targets.
Talk to your team and encourage open dialogue about the KPIs and their targets. Are they too aggressive? Too easy? Targets should be challenging, but if they’re too far-fetched or rely entirely on metrics that your team doesn’t control, it would be wise to revisit. You’ll also want to explore the activities and tactics your company will use to achieve those targets. Lastly, take time to evaluate where you are today—this will be your KPI starting point.
Get to know the different types of KPIs
Identifying which KPIs you should track becomes easier when you have a better understanding of the types of KPIs that are most commonly used to measure progress.
- Quantitative KPIs are all about measurable facts that can be represented with a number. Think stats, percentages, and dollar signs.
- Qualitative KPIs involve human interpretations and can’t be quantified with numbers. Think opinions, feelings, and experiences.
- Lagging KPIs measure what’s already happened in the past to predict success or failure. Think of looking back at what you’ve already accomplished, or where you’ve struggled.
- Leading KPIs measure performance to predict future success and long-term trends. Think of looking forward to where you’re headed.
Leading and lagging KPIs are commonly used together. Along with quantitative and qualitative KPIs, they’re a good place to start.
For each KPI that you choose to track, assign an owner and agree on tracking frequency. Whatever KPIs you decide to track, using a KPI platform or tool is key for collaborating with your team on KPI definitions. By collectively defining each KPI, then capturing contextual data and unifying it into a single view, you enable spot-on, real-time actions.
KPI dashboard examples
Effective KPI dashboards bring together all the KPIs you need to track your strategic goals, establishing a visual representation of all your relevant metrics side by side, in one place. Take a look at these KPI dashboard examples and consider some of the key associated metrics you’d likely want to track:
KPI reports take the information presented on the KPI dashboard to a new level. They go deeper into the data to pull out more detailed insights and analysis.
A KPI report helps stakeholders and team members identify trends or bottlenecks over a specific time period, so that they’re able to make better decisions. Reporting topics could include:
- Insights into the company’s day-to-day operations.
- Financial health of the company against targeted KPIs.
- Notable trends or patterns presented by the data.
- Deeper analysis of the data to assist with strategic decision-making.
To create your KPI report, first determine your audience and the objective for the report. For example, you might want to show company stakeholders Q3 progress toward your revenue target. Make sure that all the KPIs featured in your report point back to that central theme.
Additional considerations for creating your KPI reports include:
KPI best practices
To help you successfully harness the power of KPIs, we’ve compiled a few tips to get you started.