As businesses continue to embrace data-driven decision-making, Key Performance Indicators (KPIs) have become an essential tool for organizations to measure and monitor their progress toward strategic objectives.
Leveraging Sigma Computing’s KPI element empowers teams to not only easily visualize and track these vital metrics but also to gain valuable insights that can drive growth and boost efficiency.
In this blog, we will cover how to define a good KPI and how to create and customize Sigma’s KPI element.
At the time of this writing, the KPI element is in beta meaning Sigma is continuing to improve the functionality. To learn more about what’s next for KPI Elements, check out Sigma’s KPI Annoucement Release
What Makes a Good KPI?
Businesses should use KPIs to effectively measure and monitor their progress toward strategic objectives, ensuring that they stay on track and make data-driven decisions. KPIs help organizations align their efforts, identify areas for improvement, and ultimately drive growth and efficiency.
With these goals in mind, when deciding what to make Key Performance Indicators (KPIs), there are several important things to consider including:
- Alignment with Business Objectives: KPIs should directly align with the organization’s overall goals and objectives. They should reflect the critical success factors that drive business performance. Don’t make a KPI for the sake of having additional KPIs.
- Relevance and Actionability: KPIs should be relevant to the specific areas of the business they are measuring and should provide actionable insights. They should help identify areas for improvement and guide decision-making. As business priorities evolve, it may be necessary to update or revise KPIs accordingly.
- Measurability and Data Availability: Ensure that the data required to measure the KPIs are readily available and can be tracked accurately. Consider the data sources, frequency of updates, and potential challenges in data collection.
- Clarity and Simplicity: KPIs should be clear and easy to understand by all stakeholders. Avoid complex formulas or convoluted metrics that may confuse or dilute the message. Learn more about Sigma’s Metrics feature that helps clarify KPI formulas: What are Metrics in Sigma Computing?
- Time-bound: By placing time constraints on KPIs, organizations ensure their KPIs are still applicable and a meaningful comparison to the current state of business.
- Balance and Focus: Strike a balance between having too few or too many KPIs. It’s important to focus on the most critical metrics that provide valuable insights without overwhelming the reporting and monitoring process.
By considering these factors, you can select KPIs that accurately reflect your organization’s performance and help drive strategic decision-making.
How to Create a KPI Element
1. Create a child visualization element
2. Change the visualization type to KPI
3. Add the fields for the KPI
- Value: This is the measure you’d like to display
- Timeline: The time field used to create the line/area chart
- Comparison: The time period or measure for the value to be compared to
- Period: The time frame options are based on the date truncation of the Timeline field
- Column: This allows for comparing against a different value, such as cost vs. profit
How to Customize a KPI Element
There are a few different customization options available under the Element Format option.
- Display: How the comparison of the measures will be compared: percentage difference, delta, or absolute
- Direction: Change if a measure increasing or decreasing is better
- Color Options: Choose different colors for the comparison arrow
- Show Arrow: Choose if the comparison arrow shows
- Font Size: Choose the font size of the comparison line (arrow and label)
- Show Label: Add additional text between the arrow and the comparison label
- Show: Show or hide the trend visual (line or area chart)
- Shape: Choose between a line or area chart
- Color: Color of trend visual
- Show tooltip: Adds a tooltip to the trend visual
- Show timeline axis: Labels the timeframe for the trend visual
In conclusion, KPIs are vital for measuring progress, making data-driven decisions, and driving success. A good KPI aligns with business objectives and is relevant, actionable, measurable, clear, time-bound, and focused. Sigma Computing offers a powerful platform making it easy for anyone to build and monitor KPI performance, identify trends, and make informed decisions for continuous improvement.
Here are a few examples of good KPIs that could help your organization:
- Sales Revenue Growth Rate: Track the percentage increase in sales revenue over time.
- Customer Retention Rate: Measure the percentage of customers retained over a specific period.
- Average Order Value: Monitor the average value of each customer’s order.
- Website Conversion Rate: Measure the percentage of website visitors who convert into customers.
- Inventory Turnover: Track how quickly inventory is sold or replenished.
- Employee Satisfaction Score: Evaluate employee satisfaction levels through surveys or feedback.
- Marketing Campaign ROI: Assess the return on investment for marketing campaigns.
- Customer Lifetime Value (CLV): Track the predicted net profit generated from each customer over their lifetime.
- On-time Delivery Performance: Monitor the percentage of orders delivered on or before the promised date.
Ready to harness the potential of your data, build impactful KPIs, and unlock the power of data-driven decision-making? Let us help you determine the best KPIs for your organization and build insightful analyses in Sigma Computing.
Our team of experts is ready to guide you through the process, from defining your objectives to creating visually compelling dashboards. Reach out to us today and take charge of your organization’s performance, identify areas for improvement, and drive success with Sigma. Together, we can revolutionize the way you measure success and achieve remarkable results.
Yes, you can make the KPI element only “to date.” A “to-date” lens can be an important filter for businesses to understand how a partial period compares to a previous partial period and not a partial period to a larger period (for example, Feb 1-17 vs. Jan 1-31). To have a “to-date” view, add a to-date filter to either the parent or KPI element. A to-date filter can be created using this function and filtering to keep only True: DatePart(“day,” [Date]) <= DatePart(“Day,” Today())