When it comes to understanding the overall health and performance of your business, KPIs (key performance indicators) are the main drivers for revealing the truth across an organization. But according to findings in the new 2020 Vena Industry Benchmark Report, most companies are not commonly sharing KPIs with other business stakeholders.
In the recent report, out of the 350 global business leaders who were surveyed, 60% revealed that business KPIs are not regularly shared with the rest of the company. This indicates that even though finance teams help develop, implement and capture KPIs, most businesses are not acting on those KPIs in a way that matters most for the business--to inform strategic decision making and drive performance company-wide.
Using Key Performance Indicators
Measuring the success of your business doesn't necessarily mean measuring everything. Metrics are important--sales, revenue, profits, leads, clicks--but not all metrics are KPIs. KPIs are your most important metrics and are meant to act as a navigational tool for your business. As the key indicators of progress toward a specific business outcome, KPIs help you and your team make better decisions that keep your business on track to achieving your strategic and operational objectives.
A well developed set of KPIs has measures, targets, clearly defined data sources, timeframes for achieving those targets and reporting frequency. And once the KPIs have been established, it's important for your finance team to keep challenging those KPIs and to make updates whenever there's a shift in business priorities. This makes sure that you are always collecting the right data across departments, communicating the results and using the numbers to answer critical questions for the entire business.
Mind Your KPIs and Act on Key Drivers
Every area of your business has specific performance metrics that should be monitored. Defining and tracking those KPIs can vary for different financial and non-financial units of your business. But if your organization is equipped with a centralized cloud database that collects, integrates and validates all key drivers using a familiar tool like Excel, that's when your finance team can really get behind the numbers with data-driven storytelling to gauge how your business is performing. This centralized center also allows your finance team to build around KPIs and to leverage additional data sources to engage key stakeholders, ensuring the right people are always driving the numbers.
When KPIs are used as a strategic navigation tool and aligned with your business goals, it encourages everyone within the organization to constantly focus on long-term business objectives and to keep measuring how successful team players are in achieving those objectives. As key elements of your business plan, KPIs are the true measure of your organization's success.
Learn more about how to turn your numbers into a narrative using management reporting software that gives you the insights you need to plan for the future of your business.
Download Vena's 2020 Industry Benchmark Report here.
