Key Performance Indicators (KPI)
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Transcript of Key Performance Indicators (KPI)
Key Performance Indicators (KPI)
By: Monica Moawad
What are Key Performance Indicators?
Key metrics
Different types of measures
Determined by a business’s goals and objectives
Aid decision-making
Why KPIs are Important?
Provide information on the performance of key business activities
Track progress of key business activities
Who Uses KPIs?
Usually used by managers of different departments within a business
Employees
Types of KPIs1. Leading indicators – indicators that measure a
business’s possible future events– E.g. Customer satisfaction ratings
2. Lagging indicators – indicators that measure a business’s past events
– E.g. Profitability
3. Qualitative indicators – indicators that provide observations of specific things
– E.g. Customer loyalty
4. Quantitative indicators – indicators that provide numerical results on specific activities
– E.g. % of new employees that stay in a business for a specific time
Types of KPIs1. Leading indicators – indicators that measure a
business’s possible future events– E.g. Customer satisfaction ratings
2. Lagging indicators – indicators that measure a business’s past events
– E.g. Profitability
3. Qualitative indicators – indicators that provide observations of specific things
– E.g. Customer loyalty
4. Quantitative indicators – indicators that provide numbers on specific activities
– E.g. % of new employees that stay in a business for a specific time
Steps Managers take when Implementing KPIs
1) Identify core business activities
1) Identify key measurements for activities
1) Develop key measurements for activities
1) Implement key measurements to analyze activities
Steps Managers take when Implementing KPIs
Steps Managers take when Implementing KPIs
Steps Managers take when Implementing KPIs
Steps Managers take when Implementing KPIs
Examples of KPIs
Productivity– Dollar revenue from new customers
Quality– Percent returns, customer complaints
Profitability– Profit contribution by customer segment
Examples KPIs (Cont’d)
Recruitment – Average time to recruit
Employee development– Average training costs per employee
Environmental– Amount of energy saved due to conservation
and efficiency improvements
Examples of eCommerce KPIs
% online positive comments– i.e. A business that wants to improve its online
reputation system
# of followers on social media platforms– E.g. Facebook
% customer transactions via Internet– i.e. A business that wants to eliminate physical
stores
% subscription renewal– E.g. Netflix
Approaches to Developing KPIs
Balanced scorecard
Create a list of goals
How are KPIs Organized and Reported?
KPI dashboard
Excel
KPI Challenges
Identifying the right KPIs that help the business achieve its goals and objectives
Gathering the right data for the identified KPIs
KPI Advantages
Gives top managers information on the progress of a business over time
Gives managers of different departments information on the progress of their departments over time
Reliable basis for action
KPI Disadvantages
Might be misleading if it is not the right KPI for the task
Data overload
Interesting Quotes
“Not everything that can be counted counts, and not everything that counts can be counted.” - Albert Einstein
"You get what you measure. Measure the wrong thing and you get the wrong behaviors.” - John H. Lingle
Time’s Up!
OAbout your speaker:OName: Monica MoawadOEmail: [email protected]
Thank You for Listening
References
• Images:– http://www.kaizen-analytics.com/2008/11/defining-actionable-business-
driven.html
– http://www.inetsoft.com/images/screenshots/exec_sales_dashboard.png
– http://www.cartoonstock.com/lowres/dcr0293l.jpg – http://www.m-g-e.org/wp-content/uploads/2011/04/Support-not-Reports-
A-new-way-to-think-about-Management-Information..jpg– http://www.epmreview.com/Experts-Zone/Cartoon-Corner/KPI-Door.htm
l– http://www.sqaki.com/7/BalancedScorecardKpi/screenshot.gif
References (Cont’d)
• Information:– http://www.davechaffey.com/Internet-Marketing/C4-Strategy/leading-lagging-performance-indic
ators-ecommerce/– http://chiefmarketer.com/crm_loop/performance-indicators-062806/– http://www.ap-institute.com/Key%20Performance%20Indicators.html– http://smallbusiness.chron.com/planning-kpi-4607.html– http://www.simplybusiness.co.uk/knowledge/articles/2010/07/2010-07-26-key-performance-
indicators-measuring-the-success-of-your-business/– http://www.clickz.com/clickz/column/2074940/quotes-analytics-success– http://corpslakes.usace.army.mil/employees/perform/quotes.cfm– http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/
Default.aspx– http://www.information-management.com/issues/20041001/1011028-1.html– http://rapidbi.com/created/samplekeyperformanceindicatorskpi/– http://www.smartkpis.com/kpi/functional-areas/online-presence-ecommerce/