10 Steps to Successful KPI and Metric Design Using Dynamics GP, Part 2

This article is the second part in planning for a KPI design project.

KPI1A Key Performance Indicator (KPI) is a lot like a GPS navigation system. A GPS navigation device allows a driver or a passenger to be in charge when making decisions about where to steer next. KPIs are the navigational tools that the team will use to understand whether the business is on a successful journey or whether it’s veering off. As mentioned in the previous article, a KPI can help your company understand if your company is on the right track and if it’s not, it can help your company understand where to focus your attention. According to Klipfolio, a KPI is “a measureable value that demonstrates how effectively a company is achieving key business objectives.” Organizations use KPIs at many levels to assess their success at reaching targets. High-level KPIs focus on the overall performance of the organization whereas low-level KPIs zoom in on processes in departments. In this article, I will cover the last 5 steps in planning for a successful KPI design project for Microsoft Dynamics GP users based on the “Designing Metrics and Key Performance Indicators chapter” of Business Dashboards, a book published by John Wiley & Sons, Inc.

Many companies using Dynamics GP will add a third party Business Intelligence (BI) tool on top of the ERP system to better consolidate data from GP and other data sources required in the KPIs and to professionally present he KPIs in reports and dashboards.

Here are the last five steps to a successful KPI and Metric Design:

1)     Test out KPIs

When your team selects a list of KPIs, do a beta-run to ensure that each one is optimal before you deploy them into your dashboards and reports. KPIs need to be Specific, Measurable, Achievable, Result-oriented, and Time-based (SMART). This definition will assist you and your company to be successful in your business. Select metrics that are actionable. Klipfolio defines a metric as a “quantifiable measure that is used to track and assess the status of a specific business process.” Every area of an organization has specific metrics that should be regularly monitored. Focus on KPIs that can be changed with very specific actions because, when users see that the indicators on a dashboard reveal an issue, the users can take action to alter or correct that issue.

2)     Choose KPIs

When choosing the right KPI, have a goal with a set of metrics that can be used in the company’s dashboard(s) and be sure that these metrics are those that best support managers’ ability to analyze and monitor the performance. Here’s the catch: the right KPIs for your company or department may not be the right ones for another company. The key to having effective KPIs is balance. You don’t want too many because it will divert attention from the ones that are important and you don’t want too few as that will leave people in the dark.

3)     Choose method and interactivity for every KPI

When you have your KPIs defined and selected for your dashboards, the next step is to choose the graphics and interactive features that should represent each KPI, such as colors, indicators like arrows and stop signs, charts, graphs, alerts, interactivity for drill down, annotations, and actions. You can also sketch your KPIs with its related graphics on a storyboard before your team executes it.

4)     Document decisions and get sign-off

I highly recommend you document your team’s conclusions and distribute the document to all the stakeholders in the project, as well as the dashboard team. This will give everyone a chance to review the KPIs that were selected and why they were selected.  The last step is to have all key stakeholders formally sign off on the document. I say this because it will minimize internal politics in the company once you start to deploy the dashboard(s).

5)     Design architecture and dashboards

Once you are finished with the latest step, you can begin working on your data architecture and the dashboard design. For inspiration on architecture design, you can explore part 2 of the Business Dashboards book, written by Nils Rasmussen, Claire Y. Chen, and Manish Bansal.

Many companies with a specific vertical or industry have metrics that are similar to those used by competitors. This can make the process of finding and defining your metrics a lot easier. KPIs that are well designed help companies focus on the important activities that drive performance and less time on activities that are not as relevant. KPIs vary depending on your industry, business, customers, partners, and its staff. KPIs are typically the most significant of an organization’s metrics.  Therefore, they are usually the most valuable content of dashboards.

Also, there are KPI software solutions that are available. They enable companies to create, analyze, and manage data from KPIs. The tool allows companies to enter their data into one system or connect third party tools for faster and more accurate data collection. A KPI tool helps organizations visualize and make sense of their data and KPIs that represent their businesses. KPI solutions help companies by offering instant reports on performance and monitors the success of the company by alerting when a KPI is underachieving or overachieving. They centralize company data, as well as simplify real-time reporting so your company can continue being competitive.

If you haven’t checked out the previous blog article, you will find the first 5 steps for a successful KPI and metric design. Solver, Inc. is happy to answer questions and generally review BI360’s web-powered, easy-to-use Excel and mobile BI tools with both real-time or data warehouse integrated analysis, budgeting and dashboards that enable collaborative, streamlined decision-making capabilities using Microsoft Dynamics GP.

Solver enables world-class decisions with BI360, a leading web-based CPM suite made up of budgeting, reporting, dashboards, and data warehousing, delivered through a web portal. Solver is reinventing CPM with its next generation solution. BI360 empowers business users with modern features including innovative use of Excel in the model design process. If you’re interested in learning more, our team is excited to hear about your organizational needs and goals.

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