Tag Archives: KPI

If you are a MBA learner,i think you should know what is KPI and Iceberg model .It is a very important metric for an Enterprise. KPI：Key Performance Indicator means organize the key Parameter of input and output of inner process to Setting, sampling, calculation, analysis, performance measurement process as a target-style quantitative management indicators.KPIs can be specified by answering the question, “What is really important to different stakeholders?”. KPIs may be monitored using Business Intelligence  techniques to assess the present state of the business and to assist in prescribing a course of action. The act of monitoring KPIs in real-time is known as business activity monitoring (BAM). KPIs are frequently used to “value” difficult to measure activities such as the benefits of leadership development, engagement, service, and satisfaction. KPIs are typically tied to an organization’s strategy using concepts or techniques such as the Balanced Scorecard.

KPI’s theory

The theory of KPA is 28 Principles，which was came up with by Italy economics Pareto.It means in a enterprise value creation process,8every department and every stuffs spend 20% key behaviors to fufill the 80% job task.You just need to grasp the 20% crucial thing,you could grasp the main significance.

28 principles have a  clear direction for the performance evaluation.you should focus on key results and key process.So,the so called KPI,it is should be the key performance indicator and the assessment work must focus on key performance indicators to start.

The role of KPI

Specifically KPI helps:

(1) According to the organization’s development plan / goal plan to determine the department / individual performance indicators

(2) monitoring the operation and performance goals related to the process

(3) to detect potential problems and find areas for improvement, and feedback to the appropriate department / individual.

(4) KPI output is the foundation and basis for performance evaluation.

When the company, department and even office identified the clear KPI system, you can:

(1) the individual and departmental goals and objectives linked to overall company;

(2) For managers, the stage from departments / individuals to evaluate and control the output KPI can guide the development of the correct target;

(3) measurement companies need to focus on the behavior;

(4) quantitative and qualitative generate profits directly and indirectly created to assess the contribution of profit.

marketing KPIs

Some examples are:

1. New customers acquired
2. Demographic analysis of individuals (potential customers) applying to become customers, and the levels of approval, rejections, and pending numbers.
3. Status of existing customers
4. Customer attrition
5. Turnover (ie, Revenue) generated by segments of the customer population.
6. Outstanding balances held by segments of customers and terms of payment.
7. Collection of bad debts within customer relationships.
8. Profitability of customers by demographic segments and segmentation of customers by profitability.

Many of these customer KPIs are developed and managed with customer relationship management (CRM) software.

Faster availability of data is a competitive issue for most organizations. For example, businesses which have higher operational/credit risk (involving for example credit cards or wealth management) may want weekly or even daily availability of KPI analysis, facilitated by appropriate IT systems and tools.