The growth and ultimate success of any company are determined by the consistency of results. These results can only be achieved if the team consistently meets the desired goals and targets. KPIs are the means of setting and measuring the success of these goals. In this post, we will briefly take a look at what exactly KPIs are and why an organization needs them.
What Is a KPI?
KPIs (Key Performance Indicators) are measurable values that show the effectiveness of a company’s business objectives. A company will set High-Level KPIs that measure the overall performance of the business toward achieving its strategy. Low-Level KPIs measure the performance of departments, units, and individuals.
KPIs Are Different From Goals
Although the terms “KPI” and “goal” are often used interchangeably, they are not really the same. A company’s goals define the outcomes that it desires to achieve, in the form of measurable results. KPIs, on the other hand, are indicators of performance that tell whether the company is on track to achieve those goals.
So, why should you have KPIs for your organization? Here are the top 6 reasons:
1. Transparency Around Performance
Without knowing what the goals of the organization are, there is no way to gauge team or individual performance. Therefore, no ability to guide the team to improve or optimize. With clearly defined KPIs it is easier to give accountability to the specific team members and achieve transparency. Teams can collaborate better when they know exactly where to focus their energy.
2. Accountability Within The Team
Numbers do not lie! It is easy to answer status update-related questions when KPIs are clear as day. Performance analysis and making personal decisions are all easier. Work is not measured by irrelevant benchmarks such as hours at work or the number of emails sent per day. KPIs let team members take responsibility for their time on the job and make sure that they align efforts with goals.
3. They Help With Decision-Making
This is logical. When you implement KPIs, you will automatically need to develop systems/processes to measure them. With this information, the business intelligence gained will allow management to make more informed decisions.
4. You Can Measure Your Targets
Though they may be easily confused, KPIs are not exactly an organization's goals themselves, but they’re a measurement of them.
A KPI can indicate that your sales team is only generating 30% of the targeted number of leads that you have set as a goal. As a manager in this situation, you are instantly aware of your sales team’s progress and the reason for not hitting the desired number of leads.
When you’re able to measure your goals this way, it gives you the opportunity to see where the gaps in your efforts might be and subsequently make decisions that help you reach your goals faster.
5. To Analyze Patterns Over Time
If you measure the same KPIs quarter over quarter, you can begin to detect patterns in your numbers. These patterns can help you optimize your business strategies.
This can allow you to make predictions about slow or high-performing quarters. Or identify over or under-performing team members and help them improve their efforts.
6. You’ll Get an Integrated Overview
One of the main reasons to invest in KPI software is integration. The data flow from different sources can be a big complication if no integration methods are applied.
Using KPI software allows all your departments to enter their data manually into one big system, or the program can connect to different data flows automatically. Whichever method is used, you can be sure that the integrated connection will boost your business management.
StemeXe for Performance Management
Now that you know why KPIs are significant for your business, browse StemeXe, the Ultimate Performance Management application.
StemeXe is a comprehensive productivity software that includes automated task management, collaboration tools, time tracking, advanced analytics, mobile optimization, and more. With StemeXe, you can work better and more efficiently than ever before. Its tagline "Everything you need to work better" speaks for itself. Give StemeXe a try and see how it can transform your business today.