What are Key Performance Indicators and how to utilize them to your advantage? 🙂 MySkills Academy will explain the meaning of and potential behind KPIs. We will also give you advice on how to work with Key Performance Indicators in your everyday work life. Hopefully, after reading this article, you will also be able to apply useful KPIs in your private life.
KPI is a business abbreviation for the term: Key Performance Indicator. Key Performance Indicators are commonly used by companies to track their performance and set internal goals. As an example for a KPI that is used as an internal target, we can refer to a company’s monthly, quarterly or yearly profit. By setting a quantifiable targets, all stakeholders, from CEO to investor, can easily analyse and compare expectations with the reality. After they are able to define new targets for the upcoming period. As a result, some strategic and tactical steps will be implemented to the company’s activity in order to reach the desired KPIs. What can be done to increase the company’s profitability? Let’s look at some examples:
1. The company could increase the marketing budget to find more customers interested in their product, thus sell more and earn more. A company must always keep a balance between its spending and the benefits resulting from it.
2. Finding new suppliers which are cheaper than the current ones will help to decrease production costs, thus increasing profit.