Benefits of KPI
KPI stands for Key Performance Indicator and it is a tool responsible for assisting organizations,ÃƒÆ’Ã¢â‚¬Å¡’Â businesses, companies and associations in measuring their progress with regards to achievingÃƒÆ’Ã¢â‚¬Å¡’Â their financial goals. In general, a KPI report is used to gauge the current performance andÃƒÆ’Ã¢â‚¬Å¡’Â success rate of a particularÃƒÆ’Ã¢â‚¬Å¡’Â business.
1. Increases efficiency
The KPI report provides all parts of the business
realistic goals that they can now focus on soÃƒÆ’Ã¢â‚¬Å¡’Â as to attain the overall objective. If employees have been given measurable and quantifiableÃƒÆ’Ã¢â‚¬Å¡’Â goals, their work is clearer. KPI also directs human and financial resources to mainly focus onÃƒÆ’Ã¢â‚¬Å¡’Â achieving goals, leading to less waste.
2. Boosts performance
Through setting a KPI, a company can identify individuals and sectors that are performing well.ÃƒÆ’Ã¢â‚¬Å¡’Â It also indicates which people and departments are performing poorly or minimally. The KPIÃƒÆ’Ã¢â‚¬Å¡’Â provides performance based evaluation that is highly beneficial in this modern world. ThisÃƒÆ’Ã¢â‚¬Å¡’Â enables the managers to channel resources to parts of the organization that are performingÃƒÆ’Ã¢â‚¬Å¡’Â very well and provide solutions to under-performing departments.
3. Enhances sales
Firms that set specific goals for their sales departments can go further and set rewards uponÃƒÆ’Ã¢â‚¬Å¡’Â meeting the goals. As a result, the KPI gives sales people a great incentive to attain the setÃƒÆ’Ã¢â‚¬Å¡’Â mark, assisting the firm achieve its objectives. Using the KPI you can easily identify low and highÃƒÆ’Ã¢â‚¬Å¡’Â sales. This increases competition among the employees leading to even more productivity.
4. Assist in budgeting
The KPI report assists in the creation of a new budget and also forecasting. This importantÃƒÆ’Ã¢â‚¬Å¡’Â feature enables managers and business owners to set aside adequate amount of money forÃƒÆ’Ã¢â‚¬Å¡’Â achieving their main objectives.ÃƒÆ’Ã¢â‚¬Å¡’Â If the KPI becomes the only instrument for measuring success for any business, then it canÃƒÆ’Ã¢â‚¬Å¡’Â distort the method in which the company performs. This can even change how people perceiveÃƒÆ’Ã¢â‚¬Å¡’Â the organization.