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Why does my organization need Key Performance Indicators (KPI’s)?

Why does my organization need Key Performance Indicators (KPI’s)?

Key Performance Indicators (KPIs) provide your organization actionable metrics in easily accessible, customizable formats so they can be used to increase the effectiveness and efficiency of your operations. What differentiates KPIs from other metrics is they can be generated from all business data to determine key leading and lagging indicators, which ultimately reflect the strategic performance of the organization. In short, they give you beacons to help navigate your ship through highly competitive waters. Our clients frequently ask us “What KPI’s do I need?” I love to hear this question because it opens up a dialogue that allows us to dive deep into the client’s business process. I have three probing questions that help us properly map a custom KPI solution.

 

What are the missions and goals of your organization?
By understanding where the organization is heading, we can determine what drives the success. We can then define what data variables best contribute to your strategic goals. We can also define a clear target so success can be determined by comparing key metrics against industry benchmarks. We will develop a process that allows the KPI values to be used to identify focus and enhance performance.

 

Is the data currently available?
Another factor to be considered is whether the data to be mined for each potential KPI is currently available. The expense of gathering additional data including system changes should be weighed against the value that the measure will provide. If you are already using a CRM system like Microsoft Dynamics CRM, then you certainly have the ability to capture it. There are also tools to synchronize your ERP data to CRM, like Data Sync Cloud. This Microsoft Azure cloud tool keeps your sales team in sync with your financials.

A KPI is simply a snapshot of your data, and is created on a nightly basis. There are several benefits to this approach. Since KPI’s can contain data that is linked & aggregated from multiple areas in your organization, idle nightly resources are utilized. You can quickly look at the data, and easily compare these key metrics.

 

How will it be used as a management tool?
A clear understanding of how this KPI will be used, how improvement opportunities will be developed, and consequences for deteriorating performance should all be clearly mapped out before implementation. Publishing and reporting of KPI’s is critical to monitoring progress. Formats for reports should be customized by role and function so that executives will see a summary view while department heads would have a much richer set of detailed metrics. Microsoft Dynamics CRM allows you to easily build dashboards, which gives you a visual on how your metrics compare across the organization, or even how they perform over time. There’s no limit to the creative ways of interacting with your data.

 

Did these questions stimulate your senses? Implementing a well thought out and comprehensive set of KPIs is the first step to a more proactive operation. KPI’s will provide all levels of the organization clear targets and objectives with the ultimate goal of building success of the organization.

Please reach out to me if you’re interested in determining what KPI’s will help your organization gain a competitive edge!


theProfessor

theProfessor

Rob is the CTO of Beringer Technology Group, and focuses his efforts on software development, cloud engineering, team mentoring and strategic technical direction. Rob has worked with Beringer since 2005, and has influenced every department from Development, Security, Implementation, Support and Sales. Rob graduated with his MBA from Rowan University in 2012, earned his Bachelors of Computer Science in 1997, and is current with several Microsoft technical certifications. Rob is very active, and loves to mountain bike, weight train, cook and hike with his dog pack.

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