¿TO is KPI? It is what we will be talking about throughout this article, where we will explain its concept, characteristics and a lot of information about it that is important to know. So we invite you to continue reading.
What is KPI?
KPI is the acronym for Key Perfomance Indicator which in Spanish means key performance indicators or also known as management indicators. KPIs allow us to measure any strategy or action of an organization.
These units allow us to measure the level at which we are performing with respect to the objectives that we have previously set as a company. The importance of these management indicators is that in an environment that is constantly changing as it is today, it is necessary for them to periodically evaluate the results obtained based on the objectives that we have set as an organization. .
In this way we can say that Yes we are on the right track and if the KPIs do not show the results we are hoping for, this will allow us to realize it and we can immediately resolve any mistakes we are making within the organization. This is why it is of great importance that we know the KPI what is it, since these indicators are shown in graphs so that company managers can make decisions easily.
KPI characteristics
The KPIs or management indicators have the following characteristics that we will mention below:
- KPIs can be measured in units.
- These can be quantifiable, if we speak in currency we can say dollars or euros.
- They can measure something in specific.
- They can be measured temporarily, that is, daily, weekly, monthly or annually.
- These indicators allow us to evaluate the factors that are of relevance to a company.
Management indicators are of great importance because they keep us informed, in order to control and evaluate the results for decision-making. These indicators of Management can vary in companies, because for example, in an industrial company the management indicator of it is production.
On the other hand, in a company that is dedicated to selling over the Internet, the management index is the digital marketing that the company uses to offer its products. If you want to know what the machines virtual, I will leave you the following link What is a virtual machine for?
Examples of management indicators
As we have commented previously, the management indicators of companies may vary according to the business model with which we are working, since the indicators for a certain company are not necessarily important for another type of company. Therefore, there are management indicators for the following areas:
- In the economic area.
- In the production area.
- On a financial level.
- At the level of product quality.
- In the logistics part.
- And in the area of ​​services.
A continuation, We will give you some examples of marketing and commercial management in KPI so that you have an idea:
- Income and costs, which is where we will see the total sales, sales by products, the cost of achievement per customer and the total investment in marketing among others.
- In customer loyalty we will see customer profitability, customer retention rate, customer satisfaction rates, among others.
- If we talk about digital marketing, we will evaluate the number of visits on the Web, the time spent on the page we are visiting, the clicks, among others.
- In terms of competitiveness and Branding, we will evaluate our market share, the growth rate of the medium in which we enter, the value of the brand, among others.
- And in commercial management we will evaluate the commercial procedures, the budgets delivered, the hiring, among other important elements.
Method to set your own indicators
In order to be able to evaluate the appropriate management indicators for your company in specific, we suggest you follow this method where you have to answer the following questions:
- What do we want to measure?
- Why do we measure this specific data within the company?
- Do you adequately monitor the results of our objectives?
- Is it a factor of great importance for the company?
- Who is responsible for supervising?
- How often is it advisable to monitor?
As you can see, KPIs are a good tool that companies have to supervise and control the planning of actions, to achieve their objectives as an organization. What will allow you to evaluate which are the least profitable and if it allows you to meet the objectives set.
It is important that we know that we do not have to measure everything within a company. This is why we have to discard those things that do not help the fulfillment of our purposes as a company.
Taking into account that companies have to be making decisions constantly, and if we do not have the information on the situation of the company, it will be difficult for us to make the right decisions. This is why KPIs are the fundamental tools that every entrepreneur and director must have.
If you want to continue expanding the knowledge about KPIs, we will leave you the following video. That can be a lot of help to understand about this interesting topic.