If you can’t measure it, you can’t improve it! And if your organization is not measuring its performance, how can you hope to improve? Key Performance Indicators (KPIs) serve as important measures of your organization’s progress. They provide actionable insights to help you run your business on one single screen.
These can be invaluable benchmarks that your team can use to determine if you are on track to reach your project and financial goals, giving you a clear path to growth.
The Advantages of Key Performance Indicators
- They allow you to focus on corporate and strategic goals
- Real-time information gives you the ability to be proactive vs. reactive
- You can study lessons learned so improvements can be made in the future
- They provide insight into what types of projects to chase
Tips for Developing KPIs
It is clear that KPIs can greatly benefit organizations, but how can you ensure your KPIs are the best for your company? Some organizations use common KPIs within their industry. While this can be valuable for gauging industry-wide success, your organization will not grow efficiently unless you develop KPIs specific to your company’s resources, needs, and goals.
Naturally, no two organizations’ key performance indicators will look exactly the same, but here are a few general tips for making sure your KPIs are a good fit:
- Avoid KPI multiplying—KPIs should reflect overall corporate goals
- The data quality must be good to have accurate indicators
- The person responsible for the KPI must have direct control over results
- Relevance to all levels of the organization
- KPIs should be in simple terms
- Benchmark both externally and internally
- Collect lessons learned and learn from the past
- Utilize a system that has easy access to KPIs that are real-time and accurate
- Examples: Utilization, %Complete, Earned Value, Gross Margin%, Net Margin%, Burn Rate, etc.
In addition, you must make sure that your KPIs are not vague, abstract goals you hope to achieve someday. You need clear, actionable performance indicators that your team will use as benchmarks on the path to success. Each KPI you create should have the following details outlined:
- Concrete, specific details about what you hope to achieve.
- Goals that are realistic for your organization. Many organizations think too big and cannot reach these goals within their current means.
- A way to measure your progress. Do not think in abstract terms. Establish a system where each KPI is measured with thorough, real-time data.
- A realistic deadline by which you will complete your goal. Define benchmarks by which parts of the project or goal will be completed to keep you on track every step of the way.
Define and Measure Your Key Performance Indicators with Unanet
ERP software like Unanet is designed to help your organization manage its projects, people, and financials to promote project success and company growth. Unanet provides real-time insights and data that project managers, directors, and CEOs alike can use to measure their organization’s progress and make changes when needed. With an ERP system streamlining your processes, you can watch your business thrive and break new ground.
To learn more about how Unanet’s project based ERP system can benefit your business, download our ebook, Excelling at Business Outcomes or view our on-demand webinar: Selecting the Right Key Performance Indices (KPI) for your Project Based Organization!