At the end of the day, your organization is only as good as its employees. Your employees create ideas, plans and goals for the organization. These goals are then strategized to be executed and progress must be monitored. The scenario explained above is what key performance indicators do.
“Key Performance Indicator”, or KPI, helps an organization define and measure progress toward the goals of every single sector within your organization. Key Performance Indicators are quantifiable measurements which reflect the success factors within the organization. These quantifiable measurements must reflect the organization’s goals. Thus, KPI is associated with many different business intelligence analytical activities.
Making KPIs "SMART"
To remember how you should measure KPIs, use this "SMART" acronym:
- Specific – must have a detailed explanation of goal that needs to be achieved
- Measurable – has to be quantifiable
- Achievable – it must be realistic
- Relevant – employees must understand the goal and it must have the same meaning to all parties
- Timely – it must have an appropriate timeframe
The Key Performance Indicator & Business Intelligence Connection
Key Performance Indicator is important to understand in both definition and use, as it is the quantifiable process of Business Intelligence. Key stakeholders must be able to utilize the quantifiable data to measure performance and define achievable targets and use Business Intelligence tools to create informed decisions. Without the knowledge of Key Performance Indicator and how one can use it for their organization, the organization could ultimately fall behind.
In our next “Why Should I Care About Business Intelligence” series, we will discuss about the utilization of Business Intelligence tools and how you can use it to your advantage.
Made-To-Measure Business KPIs & Metrics Bring Companies Closer Together
Using Key Performance Indicators and Metrics to Monitor Your Business
Business Intelligence and Finding the Right KPI Metrics to Analyze
Rethinking Your Business Intelligence Analysis and Process