For CIOs and Business Technology Partners (BTPs), driving corporate success is a multifaceted task. They understand that aligning strategic business goals is the first step towards success.
However, setting these goals is just the start of an intricate journey. Key Performance Indicators (KPIs) play a central role in helping CIOs and BTPs gauge and guide the achievement of these goals. KPIs link aspirations with actual outcomes, identifying any hurdles on the path to success.
Sometimes, it can be hard to identify where your business strategy ends and your process management goals begin. In truth, these areas are very much interlinked, and it’s vital that they work together to achieve the best results for your company.
Your organizational strategy sets out the long-term plan and vision for your business. This strategy is generally broken down into measurable goals that are cascaded down by management to employees. These higher-level goals are then used as a baseline for employees to set their own objectives, ensuring their daily work is focused on value-adding activities that positively contribute towards achieving the overall business goals.
But the key word here is “measurable.” For goals to be meaningful, engage employees to work towards them, and ultimately succeed, they can’t be too vague or undefined. There must be a clear way of ascertaining to what extent they have been achieved – and this is where KPIs perform a crucial role. KPIs analyze and measure the performance of specific business areas and provide management teams with valuable information about how the business is performing.
KPIs can be split into long-term and short-term KPIs. Long-term KPIs relate to the actions that need to take place to achieve your corporate goals–perhaps increasing sales or improving customer retention or conversion rates. From a business process management perspective, you’ll want to consider specific KPIs such as the average time taken to complete a given process, how many steps are in each one, and the average length of time that each part of the process takes.
Short-term KPIs usually have a more specific focus on the here and now and the recent past. BPM goals can be measured using short-term KPIs, such as how long particular steps within a process are taking and what blockages might be occurring to slow it down. The main aim here is to increase and improve overall productivity and efficiency within a determined process or business activity.
KPIs can and should be used to track tangible achievement against all manner of business activities. Let’s say that you want to improve your customers’ average shop value (this would be your high-level goal, though it should be more measurable than this). KPIs can help you achieve this objective by breaking down the steps you need to take to succeed at it, as they are likely to be complex and span several different areas, departments, timescales, etc.
For example, maybe you need a KPI to help you improve customer engagement, increase general traffic to your website, or review your pricing structure to help you meet your overall objective of increasing customers’ average shop value.
The use of KPIs can help meet organizational and personal employee goals by providing us with ways in which to measure progress against them. But they have another important advantage, too. KPIs are a great way of providing meaningful metrics around the areas that can be improved in your business processes. They can give you the objective data you need to make changes for the better, whether this is addressing a performance issue with a team member or tweaking the order of steps that are carried out within a process.
Finally, while KPIs are undeniably a useful way to gain insights into the performance of your business processes, take care when using them to make sure they add maximum value. For example, remember that while KPIs that focus on quantitative data are important, you shouldn’t neglect areas of more subjective, qualitative information, such as customer feedback. Too much focus on the numbers, without a recognition of the story behind them, can lead to an unbalanced focus and a failure to understand customers’ issues and opinions.
Kissflow is instrumental in improving Key Performance Indicators (KPIs) of business processes by providing real-time monitoring capabilities. This allows businesses to identify and address bottlenecks promptly to improve efficiency.