Running a business doesn’t leave you with much time to spare, so setting and measuring targets might seem like just another piece of paperwork that you could do without.
The reality is that every organisation needs to know how certain financial and non-financial drivers that determine your overall business success are performing.
It can be a difficult to decide which measures to use, which is why seeking the advice of professionals in this field is a worthwhile investment.
Once you have identified a realistic and manageable number of factors – also known as key performance indicators (KPIs) – to measure, you will benefit from valuable information that puts you in a better position to manage your business effectively.
KPIs give a focus to activity within your business, to improve performance, and make it easier to draw up and develop business strategies. They also allow you to spot potential problems or opportunities. If the trends move in the wrong direction, you are likely to have a problem. If they move consistently in your favour, you may have greater scope for growth than you expected.
KPIs vary from sector to sector and from business to business so you need to choose the factors most relevant to your particular circumstances and objectives and the best way to measure them.
For example, you may decide that customer service is a priority but you could choose to measure this in a number of ways, such as the number of customer complaints, the time it takes to fulfil an order or the percentage of incoming calls answered within a certain time.
Once your KPIs are in place, they also allow you to set targets for departments and employees throughout your business that will deliver your strategic goals.
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