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Anatomy of a KPI

Excellent thoughts here from Dashboard Spy reader, Terry Brown (Director of Marketing at Klipfolio.com). His article is particularly helpful for KPI dashboard builders.

Anatomy of a KPI: From Raw Number to Clarity

The use of KPIs (Key Performance Indicators) is an integral part of business intelligence. The careful definition and use of a KPI, enable a business or department to monitor its progress against these goals.

Let’s use a simple scenario to take a raw number and turn it into a KPI that is concise, clear and has meaning.

Consider the finance department within a company. One of the key objectives is to reduce the amount of outstanding invoices to increase cash flow.

kpi demo

The overall objective is refined to: Reduce outstanding payables over 30 days to less than $30k.

kpi metric

They wish to compare the current metric to the historical average to indicate movement; trending up, down or unchanged.

kpi traffic lights

We now have a KPI that is not simply a number; we’ve added meaning and insight without adding complexity. Where the above KPI is mean for at-a-glance awareness, tooltips and hover-over states can provide additional context to the metric as seen in step 5.

kpi historic values

This example highlights the key characteristics of a KPI: it is relevant and associated with a high-level goal for the company; it can be measured as a numeric value, one that provides context, from an operational system. It is tied to a group/departments activity; they are accountable to take action to keep the KPI within the identified thresholds.

Alternative visualizations of the above

kpi sparkline

There is significant research regarding which metrics matter to specific industries. However, it is important to understand that the performance indicators that are key for an individual organization cannot be dictated by an out-of-the-box solution. They vary depending on the industry, the functional area of the company, and the unique needs and focus of the organization. Contact us at Klipfolio.

Dashboards Promote User Adoption of Business Applications

Long time Dashboard Spy reader and KPI Dashboard evangelist, Terry Brown sent me this contribution. It’s an excellent article that you should definitely read.

The key takeaway is in this graphic. It details how a business dashboard helped increase the user adoption of a sales force automation application in an enterprise:

Sales force automation dashboard

Here’s the article from Terry Brown of Klipfolio:

How can a KPI dashboard improve application adoption?

Clear metrics + fewer clicks = greater CRM adoption.

Many companies never realize the expected returns from their CRM (Customer Relationship Management) implementation. There is no magic increase in sales, no increase in the customer satisfaction index following the implementation of a shiny new application.

CRM is not just an application you buy and install; it is also integral to business ethos, an essential part of its DNA that touches every part of the organization, is understood, and practiced by its employees.

A well planned and executed CRM implementation can bring huge returns. An IDC study relating to the ROI of successful CRM implementations found companies have yielded returns ranging from 16% to more than 1000%. Over half of the companies surveyed yielded returns of between 50% and 500%. Consider those metrics for a moment. They are nothing short of staggering.

Consider now that Gartner estimates that 60% of CRM implementations fail after the go-live date, usually fizzling out over time as users fail to maintain the information and adoption rates drop. It then becomes a matter of time before the system is abandoned, or worse, the information being gathered from it is out of date and inaccurate.

Some of the main reasons for poor implementation are cited as;

• Failure to define business objectives or develop processes for meeting objectives
• Failure to conduct ongoing reviews of application performance against objectives
• Not setting specific metrics and incentives for users
• Under estimating end user training requirements
How can a KPI dashboard help application adoption?
Definition of business objectives
As part of the initial project scope, the business objectives for each department that will be affected by the implementation should be agreed. This will provide a clear definition of the KPIs that should be tracked and measured using a KPI dashboard.

Ongoing review of performance against objectives

A KPI dashboard provides real-time notification and visibility of key metrics, and progress against them, highlighting trends and additional insight to aid better decision making.

Specific metrics and incentives for users

Each department should have a clear understanding of the metrics that will change after the implementation of a CRM system. Providing users a KPI dashboard enables them to track their individual or the department’s progress against business goals. It can also increase productivity by simplifying workflow. In a sales environment a dashboard can increase productivity by up to 85% simply by integrating into the sales workflow, reducing the time taken to access information.
If we take the example of checking for a new lead;

1. The dashboard provides an alert as the new lead arrives in the SFA application.
2. Clicking on the lead in the dashboard application launches the SFA application and opens the appropriate record for review.
3. This eliminates the need to launch and login to the SFA to check for new leads periodically saving both time and the number of clicks required to access information.

The table accompanying this article illustrates some of the savings in time for regular tasks using Klipfolio Dashboard to integrate into the workflow.

Giving users the ability to make tactical decisions based on up-to-date information from the CRM application, and affect business outcome increases personal productivity and application adoption.

Under estimating end user training requirements

According to a recent IBM/MIT survey adoption of new technology is hindered, not by cost or complexity, but by human nature. This inbuilt resistance to change highlights the importance of training for new users. Using KPI dashboard to reduce the learning curve for new users by makes it easy to access a customer record or be directed to the correct page for data entry.

It is important that new users understand how it will benefit their role as well as the overall benefits to the business. A KPI dashboard achieves this by providing relevant business information, improved visibility of key metrics and increased productivity

Every business is dynamic; change in process or metrics that measure its success are inevitable. Integrating a KPI dashboard as part of a new or existing deployment provides focus on the definition of objectives and metrics, provides visibility and feedback on the effectiveness of these metrics and progress against them, and most importantly, can increase application adoption by streamlining workflow and making it easier to use.

What are your thoughts regarding CRM adoption, and the use of dashboards to improve adoption?