DOT POINT 3 - KEY PERFORMANCE INDICATORS

Question 1

What are Key Performance Indicators (KPIs)?

Answer 1

KPIs provide data that can measure how well a business is performing in different areas. If performance is unsatisfactory in certain areas, this may indicate a need for change.

Question 2

Where does this business have to be before implementing change?

Answer 2

• Is it meeting it’s desired goals or set targets? Effectiveness?
• Is it using resources well to achieve those objective? Efficiency?
• To evaluate the business, managers use KPIs that provide information about how a business is performing in specific areas.
• Measure individual performances or overall business performance.
  Business needs to bench mark.

Question 3

What is benchmarking? (NOT A KPI)

Answer 3

Setting a standard to measure against. (Industry standard).
- Identify whether a business is performing well, or if adjustments and/or radical change is required.
- Whether you have improved or not.

Question 3

What is the use of KPIs after change has been implemented?

Answer 3

Managers can use KPIs to evaluate the success of the change.

Question 4

What is percentage of market share? (KPI)

Answer 4

The percentage of sales that a business has compared to its competitors, expressed as a %.
Common objective:
- Market share increases = taking business from competitors.
- Market share decreases = business losing competitive advantage.

Question 5

What is net profit? (KPI)

Answer 5

The amount of money that is left after expenses have been deducted from revenue earned.
- Revenue - Expenses = NET PROFIT.
- Increased revenue or reduced expenses.
- Determines a business’s long-term success.
- Redistributed to shareholders, retained for business.

Question 6

What is the rate of productivity growth? (KPI)