It doesn’t matter how much data you collect if you have no idea what to do with it.
If a reporting project is to succeed, you must clearly establish your objectives at the outset. Perhaps more importantly, you must understand your key performance indicators (KPI).
And that means knowing what data is available and whether or not that data actually provides any relevant KPIs that are either skewed, incomplete, or simply inaccurate.
Let’s talk about how you can ensure that doesn’t happen — and how you can ensure you select the right KPIs for your dashboarding project.
In order for a KPI to have value within the scope of your project, it must possess several key characteristics.
First and foremost, you’ll want to define what relevance is in the context of what you’re trying to achieve. You need fixed goals. Once you have those, you can examine each metric gleaned from available data, determining relevance on a case-by-case basis.
For example, let’s say your organisation’s end goal is to increase sales by 10%. One KPI you might measure to mark your progress is new customer acquisitions. Let’s further posit that per the data, your customer base has increased by 5%.
Seems good so far, right? The issue is that this metric on its own isn’t enough to indicate the business’s performance. It does not, for instance, account for:
While it may still be valuable to measure new customer acquisitions, this metric on its own is likely not a relevant KPI for the stated goal.
In addition to relevant, your KPIs must also be actionable. When someone reviews a report, it should be clear what changes need to be made in order to proceed towards the end goal. It should also be clear in what timeframe that action must be carried out.
A good KPI shows clear and measurable progress towards (or away from) the goal. There should be a clear view of ongoing trends within your project (and within the wider organisation). Most importantly, measuring these trends should provide you with insights that will help you continue on the road to your end goal.
As you might expect, KPIs generally tend to be rather time-sensitive. With that in mind, the information provided by each KPI must arrive in as timely a manner as possible in order to align with the goals of the report. Too early, and you might be left with incomplete data that offers no insights of note.
Too late, and you’ll end up facing down missed projections and outcomes.
KPIs must be based on agreed upon data sources and owners to ensure their calculations remain consistent and accurate.
Now that you have a general idea of what goes into a proper KPI, let’s talk about how you can separate the good from the bad. After all, just because a KPI seems relevant, doesn’t mean it’s valuable. And just because a metric is actionable, doesn’t mean it has any bearing on your project’s objective.
Your end goal is to narrow down your list of KPIs to between four and five. When it comes to reporting, less is more. Don’t just jam KPIs in because they seem relevant.
Instead, for each KPI, ask yourself:
Answering each of these questions should give you a relatively good idea of which KPIs will be most valuable in helping you fulfill your goals. It’s important to understand over the course of this process that reports aren’t necessarily meant to show how your entire company is doing. Instead, they provide a glimpse into one facet of the company, coupled with insights to drive more effective decision-making.
Choosing the right KPIs is the goal of any reporting project since they can make or break these types of projects.
Today, it’s important that you select the right ones to avoid using irrelevant data that may skew the accuracy of your reporting project. That way, they can be used to create actionable reports and drive positive outcomes. Here’s where Amos comes in.
Amos | 3D gives your organisation everything it needs to successfully navigate complex data and reporting projects. From our proven process, KPI expertise, and more — we can help you achieve the results you want using the data you have.
Are you interested in learning more about Amos | 3D? Get in touch with our reporting project specialists today to get started.