KPIs measure efficiency, quality, timeliness, use of resources and much more by evaluating the performance of activities related to business objectives, often determining their success. Let's find out more about them.
KPI is the acronym for Key Performance Indicator, and is a value used by organizations to measure and establish the effectiveness of the activities they implemented to achieve certain business objectives.
KPIs are set according to the different objectives and represent intermediate stages on the way to their achievement. If the various departments of a company monitor and measure their KPIs and obtain good results, it means that they are working correctly to achieve their objectives and towards success.
In short, KPIs work like a compass and without them, and the fundamental information that they continuously provide to companies, it would be much more difficult to achieve the pre-set corporate goals.
A good KPI must be specific, easily measurable, relevant, and realistic.
Furthermore, as mentioned above, each KPI should be aligned with the overall company strategy, and desired results. Moreover, it should be linked to a specific objective, as well as the context of the company in which it is designed and measured. Having said that, we can say that there are some general characteristics that make a good KPI.
Here they are below:
Each KPI represents a fundamental element of every company’s development plan as it expresses and measures what you want to achieve and within which time frame.
Performance indicators are more reliable when they can detect trends over time, rather than isolated performances. Working to make them reliable, accurate and constant can make the difference, thus providing an organization with strategic assets that can guide it successfully in achieving its objectives, but also in developing future objectives and discovering future opportunities.
Companies usually employ multi-level KPIs. High Level KPIs correspond to evaluations of the company's overall performance, while Low Level KPIs evaluate the performance of the various departments, for example, sales, marketing, human resources, customer care…, and their specific performances according to their different goals.
Each department has specific KPIs to refer to. Here are just a few examples.
Retail KPIs measure the performance of a brick-and-mortar store. The main Retail KPIs are:
The raw material supply chain is the backbone of any manufacturing plant. Let's discover the main KPIs for the Supply Chain.
There are multiple KPIs for production monitoring. Let’s look at the most relevant.
These are essential to define efficient action plans and achieve strategic corporate objectives in the medium and long term.
Here are some of the main Management Control KPIs:
Creating KPIs that can provide reliable data on sales performance is essential for evaluating your sales network. Let's look at the most important ones.
There are numerous types of performance indicators for the logistics sector depending on which transport phases you want to analyze, from the procurement of resources, through warehouse logistics, to delivery to the customer.
Accelerate your logistics and shipping KPIs with ShippyPro. Sign up and try your first 30 orders for free.
There are also specific KPIs for ecommerce, from the number of unique visitors to your eshop to customer acquisition and retention data. Let's discover the main ones together.
When it comes to Marketing KPIs, a lot depends on the type of company and the specific objectives. Here we listed some of the most used ones.
There are many KPIs to analyze the presence of an organization on social networks. Here are some:
There are many tools for measuring KPIs that vary according to the type of KPIs needed.
For production KPIs, the most used tools are MES softwares (Manufacturing Execution System), capable of detecting data and indicators related to all production phases directly from production machinery or if operators manually enter them. Among the most popular ones we’d like to mention Katana.
Katana is popular among online merchants, as it optimizes the organization of production, from inventory to raw materials, also through the control of specific KPIs. The system integrates seamlessly with leading ecommerce platforms including Shopify and WooCommerce, and with Xero and QuickBooks accounting services.
SAP SCM, specifically indicated for supply chain management, is probably among the most popular business applications developed by SAP. User-friendly SAP SCM allows you to fully manage the processes related to the Supply Chain, from the procurement to the delivery of goods or services, supporting organizations in their planning, as well as in improvement of their efficiency, control and visibility.
To improve management efficiency, we recommend Wolters Kluwer's CCH® Target. Ideal for reliable planning and greater depth of analysis, thanks to the connection of data, processes, and people on a single platform, it increases the productivity of the whole company. It also allows you to check work progress and have a complete view of the tax, administrative and production processes.
Monitoring the productivity and effectiveness of your sales force while equipping it with an irreplaceable work tool? It is all possible, with the right solution.
SalesForce is probably among the most popular sales management tools in the world. It is a solution suitable for companies of all sizes and in any sector. It will allow you to keep every aspect of the sales process under control with the aim of improving it and increasing the productivity of your sales network. A tool that allows organizations to manage and measure their sales force while allowing the sales team to better manage their customers.
Odoo is among the most loved tools by companies that sell online and therefore specific for ecommerce optimization.
Odoo is an enterprise resource planning software that supports organizations in managing sales, inventory, production, warehouse, stock management, accounting, billing, and customer relationship (CRM). Odoo can be customized according to your needs, and is available in the cloud, as well as on-premises and is compatible with the main operating systems (Mac and Windows), on iOS and Android mobile devices.
Among the most popular tools used to analyze the performance of Marketing and social media we have Google Analytics.
Google Analytics is one of the most popular tools used to analyze and monitor performance marketing. It allows to collect and analyze parameters ranging from the number of unique visitors to the time spent on the pages, the origin of the users, the bounce rate, and the conversion rate.
Thanks to the type of analysis it offers, it is possible to effectively monitor the performance of a site in its complexity, as well as a specific campaign, monitor its KPIs and produce precise statistics. Just click on the Social Acquisition tab to analyze the activities on social networks, analyze which channels generate the traffic of the posts and on which specific ones.
Analyzing and monitoring KPIs is essential to save costs and optimize business processes.
We hope this overview of the most common business KPIs will help you improve your business day after day.
On our blog you will find many other updates and articles useful to manage an international business in every aspect, from marketing to logistics, and sustainability too.