“If you can’t measure it, you can’t manage it” – this statement by Peter Drucker perfectly captures the meaning and essence of measures, indicators, benchmarks and other business management tools.
This is why Key Performance Indicators (KPIs) are so important in the process of measuring and achieving companies’ goals. They provide a foundation for building a results-oriented company culture or serve as a source of objective feedback for employees, managers and boards. KPIs are a tool enabling quick decision-making, planning activities or reacting to emerging problems.
In order to have full control over what is happening in an organisation, knowledge based on reliable information is essential. But how do you know if your company is meeting its growth targets? Are employees delivering the required outputs? Are administrative costs too high in relation to revenue – and if so, where can savings be made?
A benchmark proves to be crucial.
Performance indicators, i.e. defined levels of achievement of specific tasks, are such a benchmark, providing a basis for further analysis of the performance of the company and its employees.