.
What is KPI Provided by : Mahsa Sharifi.
Why is it good for you Email Address:
Sharifi_mahsa@yahoo.com

Measuring performance
• Measuring something is the best way to make
it improve,
• if you don't measure, you don't really know
what's going on.
• To Evaluate
• To Control
• To Budget
• To Motivate
• To Promote

KPI Examples and Templates.
• KPIs, metrics, and ratios for any department in your organization.
Key performance indicators (KPIs) do exactly what their name
suggests: they provide an indication of your performance by
measuring key processes. By monitoring the right KPIs, you can gain
valuable insight into your performance and make the adjustments
needed to optimize your performance.
• they provide an indication of your performance by measuring key
processes
• The challenge is knowing which KPIs are most important to monitor
to get the results you want. That's why we've put together this list
of KPIs for each department in your organization. Each KPI should
come with a definition, calculation, and example.
• The challenge

Categorization of indicators
• Quantitative indicators which can be presented as a
number.
• Practical indicators that interface with existing company
processes.
• Directional indicators specifying whether an organization
is getting better or not.
• Actionable indicators are sufficiently in an organization's
control to affect change.
• Financial indicators used in performance measurement
and when looking at an operating index.

Managers should know the answers…

Why are KPIs important?
• Managers are overwhelmed
and distracted with day to day
activities and tasks.
• Managers must make
important decisions, quickly,
with greater consequences,
and often with limited
information on hand
• Managers concentrate on the
tactical decisions and neglect
the strategic ones

KPI
Row # Progress Change
EX # of new 95% Complete % change increase in sale
customers
Sources Database Project Plan Database
Frequency Monthly Quarterly Monthly
Target

Problems

Still Not convinced ?Why KPI ?
• Say ‘Yes’ to Key Performance Indicators (KPIs)
Because Guess Work is for D!
KPIs give you a complete picture of plan vs.
actual results.
KPIs give you a complete picture of plan vs.
actual results.

KPIs should focus on a single strategy
• KPIs should all be linked to the strategy
• • KPIs should be consistent
• • KPIs should be mutually reinforcing

Measuring performance !

How should KPIs be used?
• Communication
• • Informing
• • Diagnostic
• • Learning
• • NOT controlling

Some Generic KPI Measures to warm up with
Strategy Goal Drivers Measurement
customer Improve customer Decrease lead time Average Lead Time
satisfaction Deliver on time % deliveries on time
Internal Business Continuously improve Decrease Cycle Time Average Cycle Time
business processes Increase Quality # of Defects; %
Increase Productivity Rework
Output per employee
Financial Continuously Improve Decrease Costs Average Unit costs
Financial Increase Sales growth Growth Rate in Sales
Performance Increase Market Market Share
Share
Innovation and Deliver new Products Increase sales of new
learning and Services products and services
Reduce development
time

You are what you measure.
• Measure. Find insights. Take action. OR
die trying

You Are What You Measure, So Choose
Your KPIs Wisely!
• 1. Page Views vs. Visitor Loyalty. It forces a focus on
the long term and on the right entity

• 2. Revenue vs. Economic Value
Economic Value is the
sum of Revenue plus the
Business Value created
by the macro- plus
micro-conversions on
your website
Pick Economic Value,
your parents will be
proud of you !!!!

• 3. Time on Site vs. Task Completion Rate

• # of Installs vs. 30 Day Actives
Use 30 Day Actives as your KPI. Build a stronger profitable business

Are we on the same page ?
• It is important to point out that I'm not advocating that you stop measuring page views,
revenue, time on site or # of installs. They are all fine metrics. You'll most likely use them as
diagnostic measures when you analyze the metrics I do recommend you shift to.
• I'm advocating that you not make them KPIs, don't crown them God, don't allow your
employees to solve just for the primitive six. Because none of these six metrics incentivize
optimal behavior or business outcomes.
• You become what you measure, so why not solve for what actually matters?
• Let me close with a quote on incentives, from the inimitable Steve Jobs…
• "Incentive structures work. So you have to be very careful of what you incent people to do,
because various incentive structures create all sorts of consequences that you can't
anticipate. Everybody at Pixar is incented to build the company: whether they're working
on the film; whether they're working on a potential direct-to-video product; whether
they're working on a CD-ROM. Whatever their combination of creative and technical talent
may be, we want them incented to make the whole company successful."
• No one could have framed it better than Steve.
• Incentive structures are not a web analytics problem. They are an organization design
problem. But in choosing the optimal metrics to crown as heroes we can use data to
incentivize the right behavior, value creation for a company, and deliver happiness to
customer

How to implement KPIs
Step 1: Define Strategic Specifics
• • Define Your Strategy
• • Vision, Mission and Values
reflect strategy
• • Set Goals
• • Most important business
objectives
• • What “drivers” are critical
to success
• • What impacts driver results
(leadership, training)

How to implement KPIs
Step 2: Audit Existing Measures
• • Assess strategic fit
• • Identify what data is available
• • Review Measurement Processes
• • Accuracy
• • Timeliness
• • Identify Gaps

How to implement KPIs
Step 3: Develop New Measures
• • Bridge the gaps, examples of strategic data
• often missing:
• • Employee Satisfaction Survey
• • Customer Satisfaction Survey
• • Rework %
• • On-time Delivery %

How to implement KPIs
Step 3: Develop New Measures
• • Measures must reflect performance and
• progress of the business
• • Must be quantifiable
• • Must be compared to another number
• • last year
• • budget/goal
• • trend
• • Can be acted upon

How to implement KPIs
Step 3: Develop New Measures
• • KPI title: Employee Turnover
• • Defined: number of employees who resign or are
• terminated for any reason divided by the number of
• employees at the beginning of the year. Reductions
• in force excluded
• • Measured: Payroll termination report by reason
• • Goal: Reduce turnover by 10%; FY 2009 objective is
• 15 %.

How to implement KPIs
Step 4: Analyze and Report
• • Easy to Read
• • One Page Summary
• • Graphs

How to implement KPIs
Step 5: Continuous Improvement
• • Set Priorities base a stragegy
• • SMART Goals
• • Assign Accountability
• • Track Improvement
• • Set New Goals

Sample KPI Measures:
Marketing and Sales
• • Market Share
• • Leads by Source
• • Number of Prospects
• • Conversion Ratio
• • Average Dollar Sale
• • Profit Per Customer
• • Sales by Product Line
• • Number of
• Transactions/Customer
• • Customer Satisfaction

Sample KPI Measures:
Marketing and Sales
• • Number of new
• customers
• • Brand Awareness
• • Value of Brand
• • Number of Customers
• • Referrals
• • Sales Mix
• • Customer Profitability
• • Number of Orders
• • Customer Retention
• • Reasons for losses
• • Lifetime

Sample KPI Measure:
Financial
• • Dividends
• • Current Ratio
• • Quick Ratio
• • Credit rating
• • Days Sales Outstanding
• • Revenue
• • Profit Margin
• • Gross margin
• • Revenue/Expense Ratio
• • Variable vs non-variable
• expenses
• • Credit rating
• • Return on Investment

Sample KPI Measures: People
• • Number of Employees
• • # of mangers
• • Manager/employee ratio
• • Absenteeism
• • # new employees
• • Hours or $ of training
• per employee
• • Ratio direct to overhead
• employees
• • Cost per new hire
• • % employees fully
• trained

Things Every Owner
Should Know
• The profitability of the
business depends on
how well the employees
consistently perform
critical activities.
• Employees perform best
when they
understand how their
performance affects the
bottom line, and how their
performance is measured.

Things Every Owner
Should Know
• Small changes in
critical areas can have
a great impact on the
bottom line.
• What gets measured
gets done, and what
gets rewarded gets
done again.

Problems of experts.
• In practice, overseeing key performance indicators can
prove expensive or difficult for organizations. Some
indicators such as staff morale may be impossible to
quantify. As such dubious KPIs can be adopted that can
be used as a rough guide rather than a precise
benchmark.
• Another serious issue in practice is that once a
measure is created, it becomes difficult to adjust to
changing needs as historical comparisons will be lost.
As such measures are kept even if of dubious
relevance, because history does exist.
• Comparisons between different organizations are often
difficult as they depend on specific in-house practices
and policies.

Sample KPI Trend Report

Sample KPI Report Template

NOW please prepare KPI of your
own department.