What is a KPIS?
A KPI (Key Performance Indicator) refers to a key indicator in the performance of the business that allows measuring the success of the actions that the business is executing according to its strategy. It can be expressed in monetary terms, units (volume) or percentages (relative indicators).
The key performance indicators should be an X-ray of the business and offer optics that allow us to make better decisions because we will have data in real time, from wherever we are, which allows us to make timely decisions that result in an increase in the profitability of the business. , greater volume of transactions or whatever the objective we set.
The purpose of a KPI must be to show a performance result in order to improve it. It is very important to always establish the "for what" of the target indicator that is followed up. There are indicators for different areas of a company: sales, purchases, inventory management, inventories in process, utilities, margins, visits, claims, contacts, etc. Nowadays, almost all companies have KPIs that show if the developed actions are paying off or if, on the contrary, they do not progress as expected.
We share below some examples of KPIs that can be used in the sales area: • Units billed and not delivered, (amount, # of units and%) • Average billing per sale or average ticket • Inventory age • Profit margin • Sales volume vs. objective
These indicators represent a potential success opportunity for any company, so it is advisable to take into consideration when analyzing their performance and visualize strategies to optimize it.