Glossary
What is KPI?
A KPI (key performance indicator) is a measurable value that shows whether an organisation, department or process is on track to reach a goal. Examples include gross margin, on-time delivery and absenteeism rate.
KPI explained
A good KPI has a clear definition, a source, an owner and a target. Without a definition everyone calculates differently; without a target nobody knows whether the figure is good or bad. So record for each KPI how it is calculated, from which data and how often it is updated.
Not every number is a KPI. A KPI is tied to a goal you steer on; other figures are useful background. Choose a limited number of KPIs per audience, so the dashboard stays focused.
Also keep in mind the difference between leading and lagging indicators. Revenue tells you what happened, while pipeline value or the number of quotes says something about what is coming. A good set combines both.
Example
Acme Groothandel steers on five KPIs: revenue, gross margin, on-time delivery, DSO and inventory turnover. Each KPI has a definition, a monthly target and an owner, so the management team knows who raises the alarm when a figure goes off course.
KPI in ENABLE
In ENABLE, KPIs appear in embedded Power BI dashboards or in custom dashboards from the Dashboard Builder (pilot), with KPI cards and comparison with last year. The built-in Targets app records KPI targets per month.
FAQ
Frequently asked questions
What is the difference between a KPI and a metric?
A metric is any measurable number; a KPI is a metric directly tied to a goal you steer on. All KPIs are metrics, but not all metrics are KPIs.
How many KPIs should a dashboard have?
As few as you need to steer on your goals. A management dashboard with five to ten KPIs is clearer than one with thirty figures nobody looks at.
How do you define a good KPI?
Link the KPI to a goal, fix an unambiguous calculation and data source, assign an owner and set a target. Then check whether the figure really influences behaviour or decisions.
Further reading
- ResourcesHow to build a KPI dashboard: steps and examplesA KPI dashboard is an overview of the key figures you use to steer towards your goals, such as revenue, margin, on-time delivery or absenteeism. A good KPI dashboard does not start with the software, but with the decisions it needs to support. You then choose a limited number of KPIs, define them, sketch the dashboard and only then build it.Read more
- SolutionPower BI dashboard portal: share dashboards securelyShare your Power BI dashboards securely in your own portal, with role-based access.Read more
- PlatformDashboard builder: build your own dashboards (pilot)Build your own dashboards on approved data, with AI that proposes charts. In pilot.Read more
- SolutionSingle source of truth: one version of the truthOne central source for your business data, so every department sees the same figures.Read more
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