A KPI (key performance indicator) is a performance measurement that organisations use to track their goals. This is a performance measure, goal or anything someone would like to track.
Why do KPIs matter?
KPIs give a structured and measurable way to track progress towards achieving targets, they enable you to:
- Prioritise efforts and identify what the focus is
- Improve decision-making
- Spot issues early to allow for adjustments
- Enhance accountability
- Monitor for continuous improvement
- Help to motivate a team
Recommended KPI best practices
It’s best to start by clarifying your strategic objectives. Picking KPIs that are significant will depend entirely on your chosen objectives and how you can measure them. Some recommended best practices are that KPIs:
- Clear and focused, aligning with business objectives and business strategy
- Use a mix of leading and lagging KPIs (leading indicators are KPIs that help predict future performance and lagging indicators measure performance that has already occurred)
- Be quantifiable, so that growth can be tracked
- Are actionable to lead decision-making and improve performance
- Be regularly reviewed to ensure they remain pertinent
- Should be delivered throughout the business to ensure that everyone knows how their work contributes to achieving them
Common KPI mistakes to avoid
While KPIs are incredibly useful in driving performance and achieving business objectives, there are some common mistakes that can be avoided when setting up:
- Choosing too many KPIs can lead to confusion and make it difficult to prioritise efforts
- Setting up vague or poorly defined KPIs
- Making KPIs unrealistic
- Not consistently reviewing and adapting KPIs
- Not communicating KPIs throughout the organisation
- Focusing too much on short-term results
- Failing to take action on insights
Common examples of KPIs for sales are:
Revenue per client
Client retention rate
We’ve created a video to show how easy it is to set up KPIs in Power BI. You don’t need to be a technical whizz to do this, just the urge to get your KPIs set up properly.
For this particular video, we will be focusing on the sales revenue that is being tracked through a dashboard in Power BI. As good as the visuals are you need to have the right data flow set up before creating the dashboard
To begin with, we will go over setting up the goal and metrics within Dynamics 365 which conditions are set against selected *fields within an opportunity.
*In Dynamics 365 a field is now referred to as a column. I will refer to them as fields for consistency going forward as this is more common terminology.
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