Understanding KPIs and Key Metrics

2,878 views

Published on

Understanding Key Performance Indicators (KPI), Key Metrics, and How to Put Them to Work in any Organization.

Published in: Business, Technology
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
2,878
On SlideShare
0
From Embeds
0
Number of Embeds
7
Actions
Shares
0
Downloads
473
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Understanding KPIs and Key Metrics

  1. 1. Understanding KPIs and Key Metrics
  2. 2. What are Key Performance Indicators (KPIs)? What are the things you can count on your doctor doing every time you visit?     He’ll take your temperature, Your blood pressure, Your pulse rate, and Your height / weight. These four items are the doctor’s Key Performance Indicators (KPIs) he utilizes to get a quick picture of your overall health. Copyright© 2012 By Boyer Management Group. All Rights Reserved. www.boyermanagment.com 2
  3. 3. What are Key Performance Indicators (KPIs)? KPIs are exactly the same thing… the four to six key measurements that tell you the status of the health of your organization at a glance. Each KPI needs to be defined in terms of three elements:  What specifically gets measured,  The unit of measurement, and  The period of measurement. Copyright© 2012 By Boyer Management Group. All Rights Reserved. www.boyermanagment.com 3
  4. 4. What are Key Performance Indicators (KPIs)? Let’s take a look at a KPI example: Revenues What specifically gets measured?  Gross Revenues?  Revenue versus Budget?  Average Revenue per Customer? What is the unit of measurement?  Gross Dollars?  Percent of? Over what period of time shall it be measured? Copyright© 2012 By Boyer Management Group. All Rights Reserved. www.boyermanagment.com 4
  5. 5. What are Key Performance Indicators (KPIs)? Each KPI needs an associated benchmark:  Think of a benchmark as an acceptable measurement of the KPI.  Could be stated as a single measurement or a range. Example: a good benchmark for average revenue per customer might be set at 100% to 105% of the objective for this KPI. Copyright© 2012 By Boyer Management Group. All Rights Reserved. www.boyermanagment.com 5
  6. 6. What are Key Performance Indicators (KPIs)? KPIs are supported by a number of measurements called key metrics… Avg. Revenue per Customer – examples of key metrics:  Sales by product line.  Sales by market.  Sales by customer category. You’d examine each one to uncover the cause of your current sales results. Just like KPIs, each key metric will have its own period and unit of measurement, plus a benchmark. Copyright© 2012 By Boyer Management Group. All Rights Reserved. www.boyermanagment.com 6
  7. 7. Putting KPIs & Key Metrics to Work
  8. 8. Putting KPIs & Key Metrics to Work Q: When are KPIs (and key metrics) the most valuable to your organization? A: When they help you direct and measure its forward progress. 1. Choose the four to six KPIs that are most important for your organization. 2. You’ll need a timely tracking and reporting mechanism. Copyright© 2012 By Boyer Management Group. All Rights Reserved. www.boyermanagment.com 8
  9. 9. Putting KPIs & Key Metrics to Work KPIs and key metrics are most helpful when they are put to work to help you steer your organization: 3. Track and evaluate the trends. 4. Determine how, when, and to whom you will communicate the KPIs. Copyright© 2012 By Boyer Management Group. All Rights Reserved. www.boyermanagment.com 9
  10. 10. Putting KPIs & Key Metrics to Work KPIs and key metrics are most helpful when they are put to work to help you steer your organization: 5. The efforts and output of every business unit directly and/or indirectly impacts one or more KPIs through its operations. 6. Each business unit should identify the KPIs it should track, and four to six key metrics that underlie each KPI. Copyright© 2012 By Boyer Management Group. All Rights Reserved. www.boyermanagment.com 10
  11. 11. Putting KPIs & Key Metrics to Work KPIs and key metrics are most helpful when they are put to work to help you steer your organization: 7. Institutionalize applicable KPIs at both an enterprise and business unit level, along with a plan to manage to and by the KPIs. 8. Create a self-directed staff that utilizes applicable KPIs and key metrics to make decisions and direct each person’s day-to-day activities. Copyright© 2012 By Boyer Management Group. All Rights Reserved. www.boyermanagment.com 11
  12. 12. To learn more about putting KPIs and Key Metrics to work in your organization, please visit www.boyermanagmenet.com

×