How Do You Use Key Performance Indicators?
Most firms understand that in order to make improvements, they must be able to measure the problem. Metrics allow companies to measure the effectiveness of their business–from internal controls to workforce diversity. Key performance indicators (KPIs) are the internal metrics that organizations use to measure, monitor and track performance. If your goal is to increase sales by obtaining more customers, a meaningful KPI would be “number of customers added per month” or “growth in new customers month over month.” The challenge for some organizations is figuring out how to best use and analyze this information. Make your KPIs specific and measurable, otherwise you will not be able to monitor or track improvements. Make sure your KPIs come from reliable and accurate data. You should have confidence in the origin of the data: garbage in, garbage out. Align KPIs to your business strategy. Use KPIs to enforce organizational goals. Managers will be reluctant to implement and share KPIs if the
