Let’s face it, most of us do a horrible job at defining our KPIs and then permeating them down into our organization. We may do it, but the spirit of what we ask our organization to do often gets lost in translation from corporate objectives down to who needs to see what to keep marching towards the goals that make us win.
The reality all too often becomes we either don’t do it, or we do it, but the spirit of the KPI gets lost in the daily shuffle.
So, what’s the best remedy for this? The theory is simple:
- Schedule a renewed look at your corporate level KPIs
- Translate these KPIs to what various functions in your organization need to see to drive towards the corporate objectives
- Selection of a tool that brings these KPIs to the forefront with a custom view for each role within your organization
We at Rare Crew and Vault ERP focus on this problem for our clients. Read on to understand what our process is to help you attain this goal.
SMART KPIs and why they matter
Whether the KPIs are for a CEO, Software Development, Quality Assurance, Human Resource, etc., it’s vital to ensure that they're SMART. SMART stands for:
- Specific: a clear KPI that measures its importance
- Measurable: the KPI must be measurable with a precise standard
- Achievable: one must be able to deliver on the KPI
- Relevant: your KPI must measure something that matters to the organization or team
- Time-Bound: it's achievable within a specific time frame
Once a goal is defined, it must adhere to the SMART criteria and make sure it is translated appropriately into a metric that drives towards the goal and is appropriate for the target audience.
The importance of KPIs per department
KPIs are more than just numerical values that employees report weekly. Setting and measuring KPIs per department helps the company achieve its goals and objectives. It allows management to understand the overall performance and current health of the business. In addition, management can adjust the implementation of projects so that they can attain specific goals.
KPIs for a CEO
The leader of the company, or a CEO, has a very demanding workload. As a company owner, you manage organizational politics, company growth, and competition, meaning there isn’t much focus on KPIs. However, your company KPIs are the business's bedrock, and all departments should use them to measure their progress.
Business leaders always rely on their Business Intelligence (BI) when it comes to decision-making. That’s why BI requires a good team of data scientists, but this data should be instantly available through a reliable CEO dashboard. Vault can help you manage:
- Resource and HR KPIs
- Project management KPIs
- Financial KPIs
- Internal process KPIs
If you plan to create a CEO dashboard, Vault ERP can guide you and take the burden off your shoulder. You can now expand your business and effectively manage your time.
Read on: CEO KPIs: KPIs a CEO's dashboard must have.
Project Management KPIs
Key performance indicators for project management consist of different measurement tools to indicate how well a team performs in achieving company goals. The management agrees upon them early on in the project. With Vault ultimate guide to tracking projects, you can solidify project responsibility across different company departments.
Collectively, we offer powerful management tools which can provide company-wide success. Our KPIs for project management consist of project indicators which include:
- Schedule
- Status
- Productivity
- Tasks
Vault also offers resource indicators such as:
- Motivation
- Allocation
- Absentees
Read on: Vault's Ultimate Guide: Tracking KPIs for Project Management.
Financial KPIs
A business must have a steady cash flow, or else you’re already at the brink of danger. Hence, if you’re a non-profit business it’s important to know if you’re spending money. It means that financial KPIs are one of the fundamental driving forces of any organization. There must be transparency over all aspects of the cash flow, profit, and losses. If you need to quickly view data in a clear and easy-to-understand format, Vault can help. Effective financial KPIs include:
- Net profit margin
- Gross profit margin
- Operating profit margin
- Operating cashflow
- Profit and loss report
- Balance sheet
- Current ratio
- Return on equity (ROE)
- Return on investment (ROI)
Read on: 30 Financial KPIs and metrics.
Human Resources KPIs
The HR department is an essential asset. It makes sense to understand their progress as bet as possible. Regardless of the industry, a business will not prosper without human capital. If you want to know if your organization is doing it the right way, HR KPIs you should watch include:
- Hiring KPIs
- Recruiting conversion rate
- Cost per hire
- Quality of hire
- Training costs
- Training effectiveness
- Absenteeism rate
- Benefits satisfaction
Read on: Vault's Ultimate Guide: Which KPIs to watch to boost your HR.
Software Development Team KPIs
The engineering or the software development team track improvements using a specific set of indicators. If you want to achieve your business goals, then your software must meet all the standards and requirements. To do so, it’s a must to implement KPI metrics into its development process. By integrating KPI metrics into the software development team, you'll be able to avoid missing deadlines as well as poor-quality products. What you will attain is a very productive team and high-end products. KPIs for your software development team include:
- Lead time
- Cycle time
- Time velocity
- Open/close rates
- Sprint burndown
- Cumulative flow
- Defect fixed per day
- Defect fixed per developer
- Defect resolution success ratio
- Fixed defects percentage
Read on: Vault's Ultimate Guide: Tracking KPIs for your software development team.
Quality Assurance KPIs
The QA manager or engineer is managing the quality assurance team. This department measures a predefined level of quality through every business process, whether you provide services or products to target clients. So, the team needs real-time tracking of quality assurance KPI metrics that include:
- Active defects
- Defects tracked per employee
- Rejected defects
- High/critical defects
- Accepted defects
- Test case effectiveness
- Time schedule and constraint
Read on: Vault's Ultimate Guide: Tracking KPIs for your QA team.
Vault ERP enables companies to focus on KPIs for their organization by placing their business processes, and data, into one tool for their entire organization, and then providing highly configurable dashboards for each role within your team. Our professional services team can additionally custom pull data in from your ancillary systems, and/or create a custom Business Intelligence report for your organization.
Contact us to understand the power of Vault-ERP and what it can do for you.
