ERP Systems bring incredible value to your company by consolidating your information into a single location. Having a specific location to house all of your data is great, but your users also need practical ways to analyze that data quickly. Having the ability to examine comprehensive information and respond accordingly helps you keep your business on track. Your company’s KPI’s (Key Performance Indicators) are essential in measuring the success of your business activities, and your ERP System can help you determine if you are reaching your objectives.
What are KPIs?
KPI’s are performance metrics that indicate if your company is reaching its targets. Therefore, Key Performance Indicators give your managers and leaders the information and insight they need to examine and evaluate all areas of your business. Every organization’s processes and goals are different, so you will need to develop and measure your own specific KPI’s. Even though the actual Key Performance Indicators will vary per company, they are categorized into five main types that tend to be common amongst most organizations – Business KPIs, Sales KPIs, Marketing KPIs, Financial KPIs, and Project Management KPIs.
Selecting Your Company’s KPIs
You want to make sure your business selects the right KPIs upfront to get beneficial information that will accurately tell you about your company’s performance. Here is a brief description of the main types of KPIs and some examples that companies typically use:
- Business KPIs: Business KPIs will help measure how well you are achieving your long-term business goals, and help you identify opportunities for growth (examples include: Revenue Growth Rate, Acquisition Rate, and Return on Equity).
- Sales KPIs: Your company’s Sales KPIs can help you track your monthly results and see your sales growth (examples include: New Leads/Sales, Conversion Rates of Lead-to-Customer, and Customer Lifetime Value).
- Marketing KPIs: Marketing KPIs help you determine your success with acquiring new leads (examples include: Cost Per Acquisition, Marketing Qualified Leads, and Website Traffic Per Source).
- Financial KPIs: Your business’s Financial KPIs provide insight into how well your company is doing in generating profits and revenue (examples include: Net Profit Margin, Operating Cash Flow, and Working Capital).
- Project Management KPIs: Project Management KPIs monitor your organization’s progress to meet deadlines and attain goals (examples include: Actual Cost, Planned Value, and Schedule Variance).
How ERP Systems Help Bring Your KPI Metrics to Life
Once you have chosen the KPI’s that are relevant and beneficial to your company, your ERP System can help you measure and manage all of your business activities through benchmark comparisons, graphical presentations, reports, and more. ERP Systems help to provide you with real-time information about your company’s performance so you can make informed managerial decisions. They also allow you to identify problem areas quickly so you can find solutions before small problems turn into large ones. At Virtutem, we can help you with a customized ERP System Implementation that will help you bring your organization’s KPI Metrics to life. If you have any questions or would like a consultation, please contact us today.