Wednesday, 22 January 2014

Making Key Performance Indicators work for your business

Key performance indicators are used to measure the results and profits of your business. Each industry has a specific set of KPIs tailored to their specific business needs and operational requirements. Some KPIs are more important in measuring business profitability and efficiencies than others. Having the right dashboard to set out how your business is performing against your KPIs is an effective way of knowing where your business is underperforming. This can help you identify areas for improvement and increase your business efficiencies, and consequently your profits.

Working out what your KPIs are

Determining the right KPIs is all about selecting the right benchmarks to measure the success of your business. Ideally, KPIs should be tailored to the nature of your business, focusing only obtaining and analyzing data that reflects goals unique to your company and your industry. For example, if you want to measure profitability of a client adjusting the length of time for renting a product of yours, you might consider setting as KPIs relating to return dates, fines incurred, average of days, weeks or months the client rents a particular product. Tracking and analyzing this information will help you determine the length of time to rent your products.

The most important thing is to focus on quality over quantity. Avoid any extraneous factors that would not directly impact on the growth of your business. This will save you time, resources and money and help you keep your dashboard clean, organised and relevant to the benchmarks that matter to you and your industry. Setting up the right system of KPIs will help you accurately evaluate your business’ performance and reach all your goals for 2014.

Keeping your system streamlined

Dashboards are customizable digital interfaces, often consisting of a single page, that gather, store, relay and analyze data. In a world full of infographs, it’s easy to want to have as much data as possible. KPIs should be kept simple, and that should be reflected in the methods used to streamline and organize your management systems.

A dashboard is a digital interface consisting of a page that gathers, presents and analyses data in a highly customisable way. In an age driven by information, it is sometimes a trap to want to access as much data as possible. However, it is more effective for your business to keep KPIs simple, organised and streamlined through your management systems.

Equally important is the period of review. Your KPIs should be reviewed every day. If your KPIs were measured infrequently, you risk getting inaccurate data and analysis. KPIs also change over time depending on the nature of your business, the time of the year and how external conditions come together to affect your business. Therefore it is important to measure your business performance against your KPIs daily and analyse the data in real time so that you can detect trends and respond with the appropriate strategies at the first instance.

Finally, being able to communicate KPIs effectively is a consideration when you are determining your business KPIs. Not only do you need to understand your own KPIs and how they relate to your business, you also need to be able to explain the data to your employees and customers. Having a visual, and user-friendly dashboard can be of assistance to you in these situations and allow you to relay the information in a clear and concise way. Being able to communicate your business’ performance clearly will help you strengthen business relationships, save time, and create trust with your customers.

Creating ROIs with KPIs 

As insignificant as they may seem, KPIs can produce big results for your business. Having the right information - properly compiled and tailored towards helping your business - can lead to bigger return on investments (ROI). With the right tools and the right strategy, you and your employees can assist your clients more quickly, accurately and effectively.

Using the right tools to achieve results

inspHire rental software has the right tools for your business to access, analyse and use critical data in real time. Our business intelligence dashboards present information to your company in a way that determines your best KPIs and help you achieve optimum performance.

Contact us today to learn more!

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