What is the KPI Report and How to Create One
You're finally ready to set objectives for your company, business, or organization, but you will need to choose the right measures to track your goals. Key performance indicators or KPIs play a significant role in this process, and every successful organization has already established theirs, so they can follow and meet their objectives. But this is easier said than done.
Choosing and tracking the right KPIs for your company can be pretty complicated, and even when you manage to do it, you still have to figure out how to report it adequately and accurately, and that can be pretty tricky too.
But before you start with your KPI report, you need to have a deep understanding of what KPIs are, how to choose the right ones to track, why they are so critical for your company's success, and many other valuable things, so that you can run a successful organization.
KPI and Metric
What are the KPIs?
Acronym KPI stands for the key performance indicator, and it's representing a measurable value that will tell you how efficiently your organization is accomplishing its goals.
There are a lot of valuable metrics that are important for your organization, but only the crucial ones that are showing you development towards the goal can be called KPIs.
KPIs can be used on multiple levels to evaluate the progress of your company, and we can split them into two main subcategories. There are high-level KPIs, and they are focused on the organization's overall performance. At the same time, low-level KPIs are more focused on tasks or activities for a particular department such as customer support, marketing, human resources, and others.
With KPIs, you will be able to track your progress towards objectives and make better strategic decisions that will lead you to the ultimate success.
Key performance indicators must be:
- Focused on strategic business goals
- They must show you where to direct and focus resources
- Be measured against objectives
By adding quantitative values, your KPIs will be measurable, and you will be able to make the comparisons of performances more obvious whatever you have to measure. Key performance indicators can also be qualitative, but this method isn't recommended because it can drive to confusion and personal interpretations of data.
KPIs are often called health metrics because they will tell you how good or bad your organization is developing towards your goals.
What are the metrics?
Key performance indicators are often confused with metrics, despite there is a clear difference between them.
We explained above how KPIs are measures that have the biggest impact on your organization's performance towards goals. KPIs provide you with an in-depth vision about what you need to measure, track, and evaluate to achieve your long-term goals.
Aldo KPIs are metrics, not all metrics are called KPIs, because not all measures are the crucial ones that have a significant impact on your objectives. You need to learn the difference between five to ten key indicators that are showing you how you're operating towards your higher goals, and the rest of metrics.
Metrics follow and provide you with an insight into the performance of your activities, they are valuable, but they aren't the most important ones. Metrics are more focused on monitoring activities that are part of your everyday tasks, but they aren't the crucial indicators of your company's overall success. They don't define your strategy and central focus.
What is the KPI Report?
A KPI report is an efficient business tool that will help you to measure, organize, track, and analyze your most significant business KPIs over specific periods. With the KPI report, you will be able to identify potential obstacles and weaknesses within your organization and overcome them easier. Also, you will be able to determine trends and areas in your company that need to be improved.
A KPI report is typically performed within an interactive dashboard that will provide you with a visual illustration of the data correlated with your previously determined set of key performance indicators.
A KPI dashboard will provide you with real-time critical insights about your performance in a logical, digestible way, that will make it easier to extract valuable information, construct your strategy and act accordingly towards the ultimate success. This report represents a strategic tracking method that will provide a fast and concise visualization of your business' most vital activities.
Why are KPI Reports Important?
We are living in data-driven times, and if you want to succeed and rise above the fierce competition, you will need to make strategic decisions based on your key performance indicators.
These reports are crucial because they empower businesses to establish meaningful goals and benchmarks, which will help you grow your business, evolve, scale, and become more flexible in an ever-changing digital scene.
When you determine and start measuring your KPIs and customize them through your KPI report, you will have an in-depth insight into your business, from customer behaviors all the way to the content performance.
When key performance indicators are organized in instinctive and visual reporting dashboards, it will be much easier for you to spot patterns as they display and drill down into historical data to make the strategic changes that can ultimately upgrade your business.
The KPI dashboard is an uncomplicated real-time data visualization display that will provide you with in-depth knowledge about your most essential information that will help you manage and accomplish your goals. Key performance indicators dashboard is also known as data or business dashboard, and they typically include graphs and charts that summarize large amounts of data into easy to understand visual representations. Hundreds of activities regularly affect all performances. If you want to have a clear real-time overview of every department's performance, the KPI Dashboard is a great way to do it.
A KPI Dashboard gathers, organizes, and visualizes the organization's critical metrics to provide a fast, precise, and concise insight into business performances and its improvement towards the organization's long term goals.
A great KPI dashboard should be simple, tracking only the crucial KPIs so that you can have a clear and concise visualization. If your organization has several departments, you should divide your KPIs into several tabs for better tracking, visualization, and easier access to the most crucial ones.
A KPI dashboard is the best operational and strategic tool for following everyday processes, so that managers and leaders can react even before the actual problem occurs and affects the performance.
What is the Difference Between a KPI Dashboard and a KPI Report?
A dashboard is fundamentally a visualization business tool.
Dashboards are using multiple graphs and charts, providing you with instant insight about real-time performance of key indicators and metrics.
A report is more focused on an analytical representation of the underlying measures, and it's using trend graphs and tabular formats to help you with the process of making strategic decisions.
Aldo reports and dashboards possess similar functions and advantages when it comes to visualizing key performance indicators, but they aren't the same thing. People often confuse them, and understanding their role in a business environment will help you distinguish them.
Dashboards are focused on operational, day to day performances, and they are better at monitoring than reports. KPI dashboards are designed to have a great visualization of your most important performance indicators, providing you with an update about your processes' performances just at a glance.
For instance, the sales team creates a Sales Dashboard, and they make it open for the entire team so everyone can open the dashboard and check the progress of their performances and compare them to other activities.
On the other hand, the report is used for data analysis. What makes up those key performance indicators numbers? Are there any inconstancies in the data points, and why that occurred, what caused it? You can answer these questions by looking at the historical data of the KPI report. Reports are presented at specific points, usually on monthly meetings, so that employees can discuss and review the report, providing the tabular data with historical context, trends, and interpretations of the metrics.
Which one to choose?
There is no general rule, and you should choose according to the needs of your organization. Reports are used for analysis and dashboards for everyday monitoring, and you can use them both. They are both interactive, and they offer almost the same functions. Choose whatever suits you better, but it's most like better if you use them both for your performance monitoring.
Different KPI Report Types
There are different types of key performance indicators reports, depending on the particular business department and their purpose.
We can divide KPI reports into three categories, according to their purpose:
Analytical KPI reports
Analytical reports provide details behind the KPIs, and they are used in all areas of business. These reports are created to provide answers to the questions about KPI data.
There are static and interactive versions of this KPI report. A static version provides historical values, while interactive allows you to investigate the data by breaking down the individual metrics.
Operational KPI Reports
Operational KPI reports are mainly focused on the everyday activities of your company, providing you with information about those activities to help you make better decisions and take the right actions.
For instance, in the finance department, this report covers the number of debtors retaining the debtor level low.
Strategic KPI Reports
This type of report aims to give a precise and meaningful picture of the businesses' development towards its success. Strategic KPI reports are assigned for owners and shareholders so that they can have an insight into how the company is performing against its goals and key objectives. These reports will help you make the better strategic decision making.
How to Create a KPI Report?
KPI reports are interactive, dynamic, and customized to the individual, department, or company, depending on their operational needs, purposes, goals, and strategies. Thanks to their customizable nature, they represent a powerful tool for drilling into a very specific set of information.
There are many indicators to track your company’s performance efficiently, but you need to know what to consider when you are preparing your report. For successful KPI report creation, you will need to follow a particular process. We will help you understand the whole process, which is structured from five steps, five essential elements you need to cover when building a KPI report:
- With multiple stakeholders, define your strategic business objectives.
- Pick a couple of most significant indicators that will help you track and evaluate the performance.
- Think about your data sources.
- Create a report which you can visualize with an online dashboard.
- Choose the types of data visualization that will provide clear and concise data, so no one gets confused.
Step by Step Explanation
Define your business aims & goals
Every company has its own set of key performance indicators, depending on the company's size, division, core aims, and goals. If you aren't quite sure what your KPIs are and which ones will provide the most significant value to your company, interact with stakeholders. They will help you determine the company's aims, goals, and objectives. By doing this, you will gain a framework of where to aim your efforts, and what metrics you should choose to track your performance towards success. This step is fundamental for the ultimate KPI reporting success.
Choose your KPIs
When you have defined the company's high-level goals, the next step is to select the KPIs according to your ongoing initiatives and strategies. Key performance indicators exist to help you grow and develop your company on every level, from marketing, finance, human resources, fulfillment, and many others.
The right KPIs are linked to your business objectives, and they are designed to provide an insight into how your business is moving towards fulfilling long-term company goals. The main word in KPI is "key" because every KPI should be linked to a specific business goal with a performance measure.
Defining the right KPIs isn't quite so easy, so here is a helpful checklist to evaluate if you have the right key performance indicators:
- KPIs provide you with an insight on whether your strategy is working successfully towards your long-term goals.
- They will point out the most important things your team and the entire staff of your company needs to do to ensure success.
- KPIs will level-up the communication, and they will help you provide a common, understandable language for all your employees towards the performance and growth of your company.
- They will help you to measure the right things!
- KPIs are verifiable and guarantee accurate data.
Consider your data sources
The next step is to consider and review all your data sources. Customized dashboards will help you consolidate all of your data from multiple channels operating with your assigned key performance indicators to give the insights you need for growth, development, and sustainable success.
Before you actually build your data dashboard and KPI report, you need to think about your data sources and align them with your company's goals and choose relevant data sources for your KPIs.
All other data that doesn't fit your requirements should be disabled or excluded from use. By doing this, you will make sure you only serve up the information or insights worth analyzing.
Set up and customize your report
The most efficient way to organize and manage your performance indicator is with a KPI software. KPI software will help you to generate complete summary reports from multiple metrics and visualize them with powerful dashboards. There are many data visualization mediums available, but the KPI dashboard is the most efficient one.
Once you have set up the user access, key performance indicators, and customized the look and functionality of your reports to your preferences, you will be able to have full insight into your most valuable data thought the medium of desktop, tablet, or smartphone application.
Data visualization is a powerful concept that will help you extract value for your crucial data within seconds. With this concept, you will be able to tell a story about your metrics and share vital information with your co-workers inside and outside your company, in an inspirational way. After your report is all set up and running, it's essential that you monitor the performances regularly, so that you can reform or adjust if it's necessary.
Additional Tips for KPI Reports
- Set precise objectives. Create a precise outline for the report and stick to it. If your report is focused on strategy, keep it that way! Don't involve other unnecessary metrics just because it's convenient, you may jeopardize the whole report. Build a separate KPI report for additional KPIs that don't go with the strategic ones.
- Keep it simple, but really. Don't let the data dictate what you need to measure. There are countless KPIs and metrics that could be measured, but the focus is on the word ''key''. In your initial report, measure a small number of your crucial performance indicators, choose to measure only what matters the most.
- Embrace technology. Maybe you are traditional, but be open to a change. It's time to ditch the spreadsheet and start reporting like a real pro. Cloud-based solutions created for KPI reports are now available more than ever, and they have a highly reliable and cost-effective way to create, develop, and share your reports.
- Ensure data consistency. The data accuracy is crucial! If your report is based on misleading and outdated data, you can throw it in the trash. Before you commit to any data source, spend some time testing them to ensure accuracy.
- Coordinate with colleges. You're not creating the report just for yourself or people that will use this report. Interact with employees who hold the responsibility for anything that is related to your report. This way, you will provide input on what needs to be measured, when, and how this will enhance their activities.
- Review regularly. Something you're tracking today, maybe tomorrow won't be crucial. As your company grows, goals and objectives change, so make sure you're keeping regular maintenance and review points that will help you to keep your reports reliable, relevant, and profitable for your business.
Examples of KPI Reports
The Operational Sales Reports
Every successful sales leader knows that reporting is vital for determining whether you're moving in the right direction towards your goals and or ar you on the way to hit your weekly and monthly targets. With reports, you will be able to track the efficiency of your team. As you can see, with the report, you will have real-time sales information in league tables, showing you how each member of your team is performing.
Strategic Organisational Reports
Companies often set annual targets like ''increase growth by 25%'' or ''increase the market share''. The Strategic KPI report is showing you how the organization is moving towards its objectives, motivating the whole organization to put efforts towards those goals.
Marketing Strategic Reports
A strategically focused marketing KPI report can determine whether all your efforts are paying off. Is your market share growing? Is the number of leads increasing, and what is your ROI? Should you adjust something, or you need to change the whole strategy? Strategic KPI reports like this one is a great way to identify possible opportunities or obstacles.
You need to keep on your mind that every company needs its own customized dashboards, depending on the objectives, goals, and audience that will read and use the report.
Choosing the right software for your dashboard is very important, as well. Try finding flexible software that will allow you to create as many dashboards as you want without repeating information.
You may think the process of creating your KPI report and dashboards will take too long, but that's not the case. Once you set your KPIs and determine your goals, everything will run smoothly.
Think about your strategy, take the necessary steps for creating the KPI report and make your goals, and KPIs SMART. It may seem like a massive effort, but once you reach your goals, everything will be worthy!