KPI (key performance indicators, KPIs)
KPI – key performance indicators
KPI (key performance indicators, KPIs) — performance of the units (enterprises) that help the organization to achieve strategic and tactical (operational) objectives. The use of KPIs enables the company to assess its current state and to help assess the success of the chosen strategy.
KPI allow monitoring of business activity of employees, departments and the company as a whole. For the term “key performance indicators (KPI)” is often used Russian translation of “key performance indicators” (KPI), however, the correct translation is the version of “key performance indicators”.
By using KPIs, you can establish a complete and effective system of motivation and stimulation of employees, so the KPI and motivation of staff have become inseparable concepts.
Depending on the company’s strategy to distinguish different KPI. They are primarily used to determine the performance of administrative staff.
Key performance indicators can be divided into:
- the trailing — reflect the results of operations for the period;
- the advanced — allow to manage the situation within the reporting period to achieve the desired results in the end.
To include the trailing financial performance. They are, by their nature, cannot describe the current efficiency of the units and the company as a whole.
Operational (leading) indicators allow to evaluate precisely the current activities of departments and the company as a whole, in parallel and indirectly answering questions about what the cash flows may be in the future and also what is the quality of our products and processes, the degree of customer satisfaction.
The introduction of KPI can be obtained the following positive results:
- The efficiency of the enterprise.
- Description of the main factors that affect the success of the enterprise.
- Planning from objectives (above), and not from its performance and existing capabilities (bottom).
- The development of realistic standards.
- Transparent evaluation of effectiveness of personnel.
KPIs can be useful not only for management of the enterprise. They are easy to navigate and rank and file employees, especially those whose income depends on performance.
The KPI modules are part of these solutions offered by the company IT Enterprise as “Sales” (business-analysis of sales) R&D (business process analysis prepare production), Personnel (motivation based on KPI), “Workflow and BPM” (business analysis document and business processes), etc.