Key Performance Indicators (KPI’s)
Key Performance Indicators (KPI’s) are the quantifiable measures that are used to evaluate the performance of a company with respect to these goals & objectives. In a broader sense KPI’s are important factors that helps us understanding that organisation is on the track.
KPI’s are used as decision making tools which help in better understanding of the organisational performance & in turn help improve the organisational performance.
KPI’s helps in:
To monitor the progress of the efforts towards achieving the target with objective evidence making better decisions by measuring only what is necessary to be measured. Measuring the performance of the organisation with respect to time. All the key metrics can be tracked & measured like quality, productivity, efficiency, utilisation & economics..etc.
To effectively measure the performance of an organisation all the metrics are to be understood and how each metric contributes to predict the performance.
KPI’s can be categorised as below:
Inputs: The attributes are measured like the resources that are required to produce the outputs.
Activity or process measures the consistency of quality or efficiency of processes to produce a specific output.
Process output measures the amount of work completed as against planned.
Outcomes are classified as intermediate and end outcomes. Ex: Brand popularity as a result of marketing as intermediate outcome. End outcome is customer retention or increase in sales percentage.
The statuses of deliverables related to project are measured by important projects.
Operational & Strategic KPI’s are important from an organisational prospective.
Strategic KPI’s track the progress towards long term goals. The following four balanced scorecard prospective are used to depict the organisations progress in achieving the strategic objectives.
- Internal process
- Organisational capacity
Operational KPI’s are the metrics focused on operation for monitoring the day to day processes or functions.
Risk measures that are hurdles or risk factors that may be a cause of concern for the success of an organisation.
Project measures which are used for measuring the progress of a project for effectiveness.
Employee measures focus on the factors like employee satisfaction, human behaviours, skills & performance.