Data Analysis can be defined as a process of cleaning, transforming, and modelling data to discover useful information for business decision-making. Take the example of a decision that we take in our day-to-day lives. To make a decision, we have to analyze our past and future and then make a decision accordingly. Similarly, an analyst who makes decisions for the company by analyzing their past and future is called a Data Analyst. The process of examining and arriving at a conclusion is called Data Analysis. However, just making decisions for the company is not enough, as the company needs to act upon the same to perform well and grow. Therefore, it is essential to check if the company is meeting its objectives from time to time.
A Key Performance Indicator or KPI is a measurable value that demonstrates the efficiency of an organization in achieving key business objectives. KPIs are used by organizations at multiple levels to evaluate the extent of their success at reaching the target. The overall performance of the business is taken care of by High-level KPIs. On the other hand, the low-level KPIs have their focus on processes in departments such as sales, marketing, HR, support, and others.
Using these KPI’s, the performances of the employees can be accurately assessed. They will be able to check if the employee’s performance is of an expected standard. KPI’s can be set and defined to integrate with your own company’s strategy. There’s no specific way in which KPI’s should be constructed. However, they should be quantitative, practical, and directional to determine if the company is heading in the right direction.
KPIs can be used for a variety of reasons. Right from reviewing employee performances to tracking company progress, KPI can prove to be an essential factor for assisting your company’s growth. Here are a few ways in which KPI can be of great help to your business:
Helps to Measure Your TargetsThere might be confusion that KPI’s are the company goals or targets, but actually, they are not. KPIs are a measurement of goals and objectives. For instance, your company aims to sell a certain amount of high ticket products each month. So, your KPIs will show how close or far you are from reaching those targets. For instance, a KPI may indicate that your sales team only generates 20% of the desired amount of leads as per your company benchmark. As a manager, you are instantly made aware of your sales team’s progress. You’ll also be made aware of the reason for not hitting the desired number of leads.
This helps to measure your goals and analyze where you are wrong and make the right decisions. This, in turn, will help you reach your goal faster. This is one of the essential reasons why KPIs should be made use of.
Create an Atmosphere of LearningSince you can measure targets using KPIs, it creates an educative atmosphere within your company. The data which is generated by measuring KPI’s gives birth to essential conversations within the workplace. If you notice a negative reading on a KPI, you will be able to talk to the person or the team associated with that KPI. In this way, you’ll be able to teach the employees to do things differently and perform better to reach set targets.
You can also analyze if the set KPIs is an effective measurement. You will also be able to make necessary modifications if the employee feels that the targets are unrealistic to meet.
Receive Important InformationKPIs can provide you with an immediate snapshot of the overall performance of your company. When you are in a very highly competitive market, that information can be vital for beating your competition. The real-time data which KPIs provide lets you make the systematic adjustments. This ensures that you are not left making frantic changes at every month end to reach your goals.
Encourage AccountabilityKPI doesn’t reveal vital statistics about the company’s performance. This reduces the risk of making the wrong decisions about the employees during the review. There might be an assumption in your mind that the employee is performing poorly. They might have punctuality issues or lack company engagement, but you won’t have any quantifiable proof.
Without KPI’s revealing vital statistics about performance, you run the risk of making wrong decisions about employees during reviews. You may assume that an employee is performing poorly because he/she has punctuality issues or a perceived lack of company engagement, but you have no quantifiable proof. A KPI may reveal that your assessment is incorrect, and the perceived “poor performer” may have some favourable stats and delivers excellent results. Using the KPI, you can determine if your employee is working well or is not very sincere.
Boost MoraleTo Improve company performance and culture, employee motivation, and job satisfaction are highly relevant. When your company hits the set targets only once a quarter or year, it can be reasonably challenging to motivate your team. When the employees receive positive reports for meeting specific KPIs in the interim, they might feel rewarded and motivated. These results are often instant and help them focus on their meeting their goals in a better way.
What should you do?Implementation of KPI is your business can be of great help and can help in determining the current status of the company. A well-chosen combination of High-level KPIs and Low-level KPIs can do great wonders in measuring the company’s success and identifying the areas of improvement and the best areas.
ServicePRO provides a suite of data analysis tools that will allow you to generate canned reports, data visualizations and run custom queries on your service desk data. To learn more about ServicePRO’s data analysis capabilities, click here.