Full form KPI:- The full forms of KPI include the following:
- Key performance indicators(KPI)
- Kiev Polytechnic Institute (KPI)
- Key point installation(KPI)
Let’s know about them point wise.
#1 What are Key performance indicators?
Key performance indicators which are actually famous in the business world as (KPIs) are business metrics that are used by company executives and other managers to track and analyse the various factors that are considered critical to the success of any particular organization.
Real KPIs focus on the business processes and functions that top management considers most important to measure progress toward achieving strategic objectives and performance objectives.
KPIs differ from one organization to another based on business priorities. For example, one of the key performance indicators for a public company will probably be the price of its shares, while a KPI for a private company could be the number of new customers added each quarter. Even direct competitors in one sector can monitor different sets of KPIs adapted to their business strategies and management philosophies.
KPIs followed more closely by different people in the same organization may also vary based on their role. For example, a CEO can consider profitability as the most important performance measure for a company, while the vice president of sales can see the ratio of sales won and losses as KPIs with higher priority.
Furthermore, the different business units and departments are generally measured according to their KPIs, which translates into a combination of performance indicators throughout the organization, some at company level and others oriented to specific operations.
Real KPIs focus on the business processes and functions that top management considers most important to measure progress toward achieving strategic objectives and performance objectives.
Importance of key performance indicators
The main performance indicators illustrate how well a company works. Without KPIs, it would be difficult for company leaders to evaluate this significantly and then make operational changes to address performance problems.
Keeping employees focused on business initiatives and activities that are critical to the success of the organization could also be a challenge without key performance indicators (KPIs) designed to reinforce the importance and value of these activities.
In addition to highlighting successes or business problems based on current and historical performance measures, KPIs can point to future results, providing managers with timely warnings of any business problems or early indications of opportunities to maximize return on the business.
investment. With this information, they can manage business operations more proactively, with the potential to gain competitive advantages over fewer data competitors.
Types of KPI
KPIs that measure the results of business activities, such as quarterly earnings growth and revenue, are known as delayed indicators because they track things that have already occurred. In comparison, the KPIs that announce the next business developments, for example, the sales reserves that generate income in the future quarters, are known as the main indicators.
There is also actually a difference between the various quantitative indicators that usually have a numerical base and qualitative indicators that are more abstract to the definite interpretation, such as the evaluation of the user’s experience with a product or on a website.
In the case of qualitative indicators, the identification of useful KPIs can be difficult; The selection of the right ones depends on the capacity of an organization to measure them in some way.
For example, the percentage of abandoned transactions in online shopping carts could be an indicator of the customer experience on a retail website. From a functional point of view, the key performance indicators include a wide variety of financial parameters, marketing, sales, customer service, production and supply chain. KPIs can also be used to track performance metrics related to internal processes, such as human resources and IT operations.
How to measure KPIs?
Once key performance indicators have been identified, employees must be clearly communicated so that all levels of the organization understand which business metrics are most important and which constitute a successful performance towards them.
This could include the entire workforce in large corporate KPIs or smaller groups of workers in those that apply to particular departments. Good business versus bad business KPIs In most companies, KPIs are automatically scanned through business analysis and reporting tools that collect relevant data from operating systems and report on measured performance levels.
Multiple KPIs also actually underpins type of systems scorecard frameworks that actually collects sets of various metrics in an attempt to supply a better view of business performance beyond operating income and other various common financial measures. One of the challenges in defining key performance indicators is deciding how many to track to determine the success of the organization.
Having too many KPIs can mitigate the focus on the really important ones. Managers must continually evaluate KPIs to ensure that they remain relevant and aligned with priorities in business operations. If individual KPIs are no longer useful, they must be refined or completely replaced.
Examples of key performance indicators
Beyond income, expenses and profits, the commonly used financial KPIs include the gross and net profit margin, which measures the amount of money a company makes on product sales; stock turnover, which tracks the speed of sales of products in stock; cost of goods sold.
a measure of materials and labour costs incurred in manufacturing the products; credit turnover, a ratio that quantifies the speed with which payments on credit sales are collected by customers; and outstanding sales days, a related metric that measures the number of days of credits that still have to be collected
Key performance indicators in customer service call centres include the first call resolution rate, which tracks the percentage of incoming customer requests that are routed without the need for additional calls; cost per call, to quantify the average cost of handling calls; call volume, which measures.
the total number of calls answered during a given period; waiting time, a measure of the average time customers spend waiting for calls; and asks for abandonment, the frequency with which customers stop while waiting.
Always remember that KPIs can point to future results, providing managers with timely warnings of any business problems or early indications of opportunities to maximize return on the business. investment. With this information, they can manage business operations more proactively, with the potential to gain competitive advantages over fewer data competitors.
KPIs for production and operations.
KPIs for production and supply chain operations include the percentage of defective products produced by a company; the time of the production cycle, which measures the time it takes to manufacture the products; the cost of transport, which gives a value to what it costs to keep the products in the inventory.
Percentage of items not available, to track the number of products that are not available in the inventory when customers request them; Pending order rate, a relative metric that quantifies the number of orders that can not be completed when placed; and refund rate, which evaluates the percentage of items that are returned.
KPIs can be collected to provide a conceptual scorecard for a company and can be associated with a range of different business activities, particularly within our four value areas, such as financial value, productivity, risk and confidence. In fact, it is to define a large number of KPIs in terms of performance measurement associated with different analytical BI activities.
This BI panel shows the results of the analysis needed to configure the KPIs in a succinct visual representation that can be instantly understood or selected to investigate. A BI panel will not only provide a real-time presentation of the selected KPIs, but will also connect directly to the BI components that allow this subdivision
By looking at some examples of performance metrics, we can feel comfortable engaging business users to assess their query and reporting needs and determine the extent to which existing data sets can meet those needs. And the categorization of the business value factors presented earlier in this chapter supports the BI process, which helps clarify overall business objectives and corresponding metrics and performance indicators.
Improving the way the company is managed as a result of the integration of a BI framework goes beyond technology: stakeholders must specify their perception of “performance”, provide performance measures and then define achievable objectives and use tools to inform the decision-making processes. These measures are implemented to evaluate, measure and control the degree of achievement of corporate objectives.
Creating revenue through customer profiles and targeted marketing.
The business intelligence reports and analysis that reflect customer transactions and other interactions allow the development of individual customer profiles that incorporate demographic, psychographic and behavioral data of each individual to support the segmentation of the customer community in a variety of ways.
groups based on different. Attributes and corresponding values. These categories form the basis of sales measures and profitability by customer category, helping to increase sales efforts and customer satisfaction.
Risk management through the detection of fraud, abuse and loss.
The fraud, which includes intentional deception acts with the knowledge that the action or representation could lead to an improper profit, it is often done through the exploitation of systemic scenarios. Fraud detection is a type of analysis that looks for types of prevailing patterns that appear with a certain degree of frequency within certain identified scenarios.
Reports on how the products and services provided match what they sell to customers (in the context of their contracts / agreements) can highlight areas of revenue loss. Both of these risks can be analyzed and brought to the attention of the competent internal authorities for their repair.
Improvement of customer satisfaction through customer profiles, rationalization and analysis of value for life.
The analysis of the customer’s useful life value calculates the measure of a customer’s profitability for the entire useful life of the relationship, incorporating the costs associated with managing that relationship, as well as the expected income of that customer.
Using the results of creating customer profiles can do much more than improve the experience of that customer by customizing the presentation of material or content.
Customer profiles can be integrated directly into all customer interactions, particularly in incoming call centres, where customer profiles can improve a customer service representative’s ability to deal with customers, accelerate problem resolution and even increase sales of products and services.
Improvement in the productivity of acquisitions and acquisitions through the analysis of expenditure.
Cost analysis includes the collection, standardization and categorization of purchase data and product supplier to select the most reliable suppliers, optimize the supply and procurement process, reduce costs, improve the predictability of high value chains supply and improve the predictability and efficiency of the supply chain.
Each of these examples can be seen both in the operational perspective and in the strategic perspective of the company. The operational view provides information on existing conditions and performance, comparing existing activities with expectations. From a strategic point of view, we can assess the degree to which possible measurements affect future company value.
Use of proper knowledge in KPIs
It is important to remember that it is possible to obtain value from information only if you can make positive changes based on that information. This means that some investments will be needed to build the environment in which the data can be transformed into knowledge, but the real advantage occurs when this knowledge is feasible.
This means that an organization can not provide only the mechanisms to create knowledge; You must also have some methods to generate value using that knowledge.
This is not a technical problem, it is an organizational problem. Providing useful knowledge is one thing, but to take the appropriate action, you need an agile organization with people authorized to take that action. And despite the costs, senior managers must be convinced that the investment will produce results.
Therefore, the best thing for the organization is to consider the types of costs inherent in the development of a BI platform to compare them with the expected benefits. This includes the analysis of costs in relation to the performance increase for any controller related to the value related to the activity, such as:
- Fixed costs already incorporated in the BI infrastructure (for example, purchases of databases or queries and tools of reports) );
- Variable costs associated with the activity (for example, are special software components required?);
- Current costs for maintaining this activity;
- The value of the benefits derived from taking actions when the expected knowledge is derived from the activity;
- The costs and benefits of other BI components that should contribute to this commercial activity;
- The expected value model of this activity;
- The possibilities of success of the applications of these actions will be applied to the expected value;
- Determining the time to break even a profitability model.
18 Examples to completely clarify the definitions of key performance indicators
Financial metrics Advantage: It is obvious, but it is still important to take them into account, since it is one of the most important performance indicators in existence. Don’t forget to analyse the gross and net profit margin to better understand your organization’s success in generating high performance.
Cost: measure profitability and find the best ways to reduce and manage costs.
LOB income vs. Objective: this is a comparison between your real income and your expected income. Tracking and analyzing the discrepancies between these two numbers will help you identify the performance of your department.
Cost of products sold: if you count all the production costs of the product sold by the company, you can get a better idea of how the product surcharge and the actual profit margin should be. This information is essential to determine how to sell more than the competition.
Day Sales Outstanding (DSO): Take your credits and divide them by the total number of credit sales. Take that number and multiply it by the number of days in the period of time you are looking. Congratulations, you just found your DSO number! The smaller the number, the better your organization is to collect credits. Do this formula every month, quarter or year to see how it is improving.
Sales by region: By analyzing regions that meet sales targets, you can provide better feedback for regions with under performance.
LOB vs. Expenses Budget: Compare your actual overhead with the budget provided. Understanding where you have deviated from your plan can help you create a more effective departmental budget in the future.
Customer lifetime value (CLV): minimizing costs is not the only (or best) way to optimize the acquisition of your customers. CLV helps you see the value your organization is getting from long-term customer relationships. Use this performance indicator to reduce the channel that helps you get the best customers at the best price.
CAC (Customer Acquisition cost): divide the total acquisition costs by the number of new customers in the period of time you are examining. Voila! You found your CAC. This is considered one of the most important parameters of e-commerce because it can help you evaluate the profitability of your marketing campaigns.
Customer satisfaction and loyalty: on the surface, this is simple: make the customer happy and remain his customer. However, many companies argue that this is more for the value of the shareholders than for the customers themselves. Multiple performance indicators can be used to measure CSR, including customer satisfaction scores and the percentage of repeat customers.
Net Promoter Score (NPS): discovering your NPS is one of the best ways to indicate the company’s long-term growth. To determine your NPS score, send quarterly surveys to your customers to see how likely they are to recommend your organization to someone they know. Establish a baseline with your first survey and establish measures that will help these numbers grow from quarter to quarter.
Customer support tickets: analyzing the number of new tickets, the number of tickets resolved and the time of resolution will help you create the best customer service in your sector.
Percentage of product defects: take the number of defective units and divide it by the total number of units produced in the period of time you are examining.
LOB efficiency measure: efficiency can be measured differently in each sector. We use the manufacturing industry as an example. You can measure the efficiency of your organization by analyzing how many units you have produced per hour and in what percentage of time your system has been installed and functioning.
People Metrics Person Change Index (ETR): To determine your ETR, take the number of employees that left the company and divide it by the average number of employees. If you have a high ETR, take the time to examine the culture of your workplace, work packages and work environment.
Percentage of response to vacancies: when you have a high percentage of qualified candidates for vacant positions, you know you are doing a good job maximizing your exposure to the people who are looking for a suitable job. This will also lead to an increase in respondents.
Employee satisfaction: happy employees will work more, it’s that simple. Measuring employee satisfaction through surveys and other metrics is vital to the health of your department and organization.
#2 Kiev Polytechnic Institute (KPI)
The Kiev Polytechnic Institute (KPI)is one of the leading universities in Kiev, Ukraine. In January 2012 the KPI Webometrics ranking was among the first 1,000, with 957 out of 20,300 universities, 510 (February 2013 ).
The institute was founded on 31 August 1898 as the Kiev Polytechnic of Emperor Alexander II, but its current complex was not built until 1902. Until then, the institute rented its space in the the commercial school building located in Vorovsky street, at that time had four departments: mechanical, chemical, agricultural and civil engineering.
The first registration was composed of 360 students, these also included the main Russian scientists Dmitri Mendeleev, others included Nikolai Zhukov sky and Kliment Arkadyevich Timiryazev provided considerable scientific and various important organizational assistance in the establishment of this amazing institute.
#3 Key point installation (KPI)
A permit for an employee, owner of the critical facility / custodian, who is exempt from routine security checks