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Writer's picturePaul Gravina

Why do we Measure Business Performance using KPI's?

Why at Owls Nest Capital do we measure business performance with KPI's? At the end of the month, reports don’t help much because they just look backwards. Effective finance managers need to know much more current information to make decisions that will drive business success forward. KPIs assist in the steering of a company's management toward thinking of their global organizational objectives. For the organization to be successful, you must ask yourself, your team, and the enterprise an essential question: How can management tell which activities are leading the company to global successes and which are merely doing the enterprise harm? Key Performance Indicators provide answers to these basic questions: • Where do we stand as a company? • What objectives do we want to achieve? • What time frame do we want to achieve these objectives? • How can we achieve them, manageable costs, and still be competitive? Key reasons to use KPIs: 1. Allows managers and employees to DEFINE and TRACK measures for every objective. KPIs are quantitative and qualitative reflections on each objective. Organizations use these indicators to decide whether an object can be measured. This is crucial if they would like to improve it. Unless a quantifiable measure is defined as an indicator of this satisfaction, it cannot be tracked. 2. KPIs allow improvement in products and/or services. Once clearly defined and tracked, KPIs help managers address problems, sales, product quality, customer satisfaction, etc. 3. KPIs can assist companies in gaining a competitive edge. Companies will only be able to compete if they know where they stand and where their competitors stand. Use KPIs to set performance goals that match or exceed internal and external benchmarks. 4. Foster a culture based on performance. Organizations can use KPIs to reward employees, teams, or divisions who reach and exceed their goals. Performance-based cultures give employees clear and defined goals and the measurements to reach those goals.


Why do we at Owls Nest Capital Measure Business Performance using KPI's?
Why do we Measure Business Performance using KPI's?


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