Overcoming Challenges When Implementing KPIs
Posted on 17th August 2017 in The Forecast
Written by Freya Hughes
We know that running a business can feel like an uphill battle, so we’re here to help you get back to a level playing field. Read on for the ‘how’s and ‘why’s of choosing, implementing and measuring the core metrics of your business.
A Key Performance Indicator is a quantifiable measure a company uses to determine how well it meets the set operational and strategic goals. They’re a breakdown of your overall business goals. Choose which aspects to measure, and keep tabs on the direction your business is taking. Breaking down your targets into KPIs makes them far more manageable, as looking at the business as a whole can be overwhelming.
Use KPIs to your advantage – you can allocate them to each department of your business and have your managers monitor them. They can be financial or non-financial, so every variable can be looked at.
Need a little more help? Check out our KPI Library to get you started, and have a look at our industry-specific examples of crucial KPIs to measure here.
KPI Challenge 1: Choosing Key Performance Indicators
Choose metrics which directly affect your customers. Customer satisfaction is a crucial element to get right, so look at where in your business they’ll be affected. Happy customers will translate into revenue.
Also look at the KPIs that measure per department, and/or per person. A great example of this is of a sales team; track the sales vs time spent of each sales person, then as a department. You can use these results to identify if this is a strong or weak part of your business. Once you understand how they’re performing, you can then make changes to boost your sales, which in turn will impact your bottom line for the better.
KPI Challenge 2: Implementing Key Performance Indicators
Use KPIs as a way to bridge the gap between you and your team. Sit down with them and share your goals, insights and pain – your staff will understand that, in fact, you are actually human (not just their boss). Once you’re on the same page, you’ll notice you start working more harmoniously. Staff that know what’s expected of them will be more engaged and more willing to go above and beyond for their job.
KPI Challenge 3: Measuring Key Performance Indicators
Once you’ve chosen what to measure, it’s time for the longest part of the entire process: tracking and measuring your results. Some businesses will implement Key Performance Indicators but fail to evaluate the data they push out. This is surprising, as it’s such as waste of time and effort to not use the information.
The top benefit of measuring your KPI results is the ability to prevent financial disaster. Because these metrics are in real-time, you can log in to your forecasting software and get a great idea of how you’re performing at a glance.
Our alerts monitor the current performance of any KPI or metric that is deemed important. You can also set up alerts to be notified about critical changes with your non-financial data. It truly is a game changer. In-app or email notifications will keep you abreast of any changes to your cash position.
KPI Challenge 4: Consistency with Key Performance Indicators
Every KPI must be measured in the same way by managers, otherwise your data will be prone to errors.
Measure the core metrics in your business and you’ll find you have much more control over your cash position. Get started if you haven’t already – it’s the only way to work.