5 Characteristics of Effective KPIs

Posted on April 11th 2016 5 Characteristics of Effective KPIs

A Key Performance Indicator (KPI) is a measurement of performance related to a specific objective or goal. Typically, KPIs can be thought of in two categories: Drivers, which measure current and future activity, and Outcomes, which measure output of past activity. Both types are important to successful performance measurement and in making informed decisions when applied to Business Intelligence.

Remember that not all measurements are KPIs. It’s important to determine which measurements in your business are indicators of true performance. Paying close attention to those measurements, your KPIs, can help identify areas of success and areas for improvement.

Characteristics of Effective KPIs:

  1. Simple: KPIs should be simple enough that employees know what the KPI is measuring and how it is being calculated. It also helps to keep KPIs to a small, manageable level so as to not overwhelm yourself with too much information at once.
  2. Measurable: Even if a KPI can’t be quantitative, it must still be measurable with clear, concise measurement attributes.
  3. Actionable: A KPI isn’t effective if employees don’t know what to do with the information. An effective KPI should answer a question and provide a further decision to be made based on that answer.
  4. Timely: The frequency of which a KPI is reported on is important – too often, and employees can be overwhelmed with data. Too infrequently, and data can be incomplete or out of date. Businesses should consider the particular nature of a KPI before deciding on the most effective frequency of which to report on it.
  5. Visible: Making KPIs visible across the organization incentivizes employees to be more productive and pay attention to their performance. When the business is more aware of everyday performance, it can make more informed decisions on how to improve.


Want to learn more about how Entrinsik Informer can help maximize your KPI reports? Contact us today!


*From: https://www.betterbuys.com/bi/6-effective-kpis/ 

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