It is important for an entrepreneur to run a profitable and sustainable business. It doesn’t matter whether he is a manager, a creator or an entrepreneur. This is why he must base his business on key performance indicators. These provide him with the opportunity to measure the proper functioning of his company. These include prospecting, quality, profitability, production, etc. But how do you choose the performance indicators for your company?
What is a performance indicator or KPI?
KPI or Key Performance Indicator means performance indicator. It is a set of information that helps the company manager to better manage his company. It provides a global vision on a specific point in the life of a company. This tool also makes it possible to confirm the directions taken so far or to anticipate the future. It affects production processes, human resources, products, stocks, services… In this way, decision-makers can first of all understand the situation of the company and then orient their directions. Their goals are to optimize the way of working to achieve the objectives they have set themselves, click here for more information.
A KPI associated with a specific goal and leading to a decision
A kpi is useless if you have no direct relationship with local and personal orientations. In order to better channel actions, a key performance indicator must be closely related to the selected objectives. Indeed, the latter will guide the measurement of performance. For example, it makes no sense to place a cost-oriented KPI if cost reduction is not one of the selected objectives. A good key performance indicator is an incentive for action and does not leave one indifferent. The decision-maker can react quickly to the reading of a KPI. He can decide to do nothing, for example. If the indicator indicates that everything is under control, and that everything is going well, the decision to take is to change nothing. Since we know that success is at the end of the tunnel, it is important to stay the course by not touching anything.
A simple and effective performance indicator
In order to choose a good performance indicator, it is also necessary to base it on its simplicity and effectiveness. On the other hand, the complexity of information gathering is by no means a valuable criterion for choosing a KPI. It cannot qualify its relevance. An indicator worthy of the name must be simple to build and does not require calculations that are difficult to assimilate or inaccessible information. The more complex it is, the less effective it is. KPIs will be built using data that is technologically accessible. Moreover, there is no point in putting in questionable information that cannot even be confirmed. This is where the cost of obtaining it comes into play. It’s a matter of comparing the cost of the infrastructure needed to obtain data to better assist decision makers in selecting directions and decisions to be made. The KPI can just be presented on the workstation, but nothing should be left to chance. The mode of presentation will be chosen by considering the nature of the data and the choices of each user.