KPI (key performance indicators) or indicators Key Performance, measure the performance level of a process, focusing on the “how” and giving the performance of processes, so as to achieve the target.
Key performance indicators are metrics financial or otherwise, used to quantify objectives to reflect the performance of an organization, and are usually reflected in its strategic plan. These indicators are used in business intelligence to assist or help the current state of a business to prescribe a future course of action. The act of monitoring key performance indicators in real time is known as business activity monitoring. Performance indicators are often used to “value” difficult to measure activities and the benefits of leading development, employee engagement, service or satisfaction.
KPIs are typically tied to organizational strategy (as exemplified in techniques such as the balanced scorecard). The KPIs are “communication vehicles” allow senior executives to communicate the mission and vision of the company to lower hierarchical levels, directly involving all employees in achieving the strategic objectives of the company. Thus, the KPIs have as main objectives: to measure the level of service, make a diagnosis of the situation, communicate and report on the status and objectives motivating the teams responsible for compliance with the goals reflected in the KPI, steady progress.
Used to calculate, among others:
- Time spent on improving service levels in a given project.
- Level of customer satisfaction.
- Time improvement issues related to service levels.
- Quality impact of additional financial resources necessary to perform the defined service level.
- Profitability of a project (ROI )
- Quality of the management of the business ( inventory turnover , accounts receivable days DCC, and DCP Payable …)
For an organization, it is necessary that you can identify their own KPI’s. The key to this are:
- Having predefined in advance a business process.
- Have clear objectives / performance required in the business process.
- Having a quantitative / qualitative results and possible comparison with the objectives.
- Investigate variations and adjust processes or resources to achieve short-term
When defining KPI’s is usually applied the acronym SMART, because KPI’s must be:
What really is important?
The data on which they base their KPIs must be consistent and correct. These data must be available in time.