What are KPIs and why are they important for management?
If you are studying Administration or Marketing, You've probably heard the term at some point. KPIs. But what exactly is it, and why is it so important to understand?
In the business world, the KPIs They are a fundamental part of a company's success and define the best way to manage it; in other words, they help to recognize whether the path being followed is good or not.
We prepared this article to help you understand exactly what they are. KPIs And, most importantly, its importance for those who intend to become or already are administrators. Come with us and learn more.
What are KPIs?
The acronym KPI It comes from English. Key Performance Indicator, which, translated into Portuguese, means Key Performance Indicator.
For companies, these are the determining factors that indicate the performance of a business's main internal processes through fundamental quantitative values.
In a management strategy, they are essential because they help to recognize whether the initiatives and actions taken are meeting the expectations of what was proposed.
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What is the use of KPIs?
Its main usefulness is that, with the KPIs, Companies are able to understand more precisely how each of their numbers is performing and to set goals that are plausible and achievable.
They are used to measure the results of marketing strategies, sales, target audience engagement, customer service, among others.
In this way, the leaders They are also able to better direct their teams and efforts, and deliver better results to their superiors.
But KPIs Are metrics and metrics the same thing?
The answer is no. Although they are related, they are not the same thing. Every metric can become a... KPI, but not all KPI It can become a metric.
Look, KPIs Criteria are essential for achieving your goal and moving your business forward, while a metric is simply something to be quantified. If that metric becomes an important point for your overall strategy, it will become a key factor. KPI.
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Some areas of business management in which KPIs The following can be used:
- Productivity indicators: The relationship between a company's use of resources and its productivity.;
- Capacity indicators: These indicators are related to productivity and should be determined to measure the negative aspects during a production process.;
- Strategic indicators: It is possible to measure what the company has achieved in relation to the previously determined objectives, that is, to compare the current situation with the desired one;
- Profitability indicators: Without forgetting its production costs, this KPI is focused on the company's revenue.
Why are KPIs important for those studying business administration?
If you are a student of Business Administration or are at the beginning of your career, it is very important to understand why... KPIs They are important for pursuing your professional path successfully.
The professor José Guilherme Campos, lecturer and coordinator of the course of Administration from the Faculty ESEG, from the Etapa Group, highlights that the KPIs They are fundamental to the administrator's routine. After all, however essential planning is for an administrator, execution is the moment of truth: it is the moment when results will be achieved or not.
“"To know if the trajectory towards the expected results, determined in the planning, is positive and appropriate, we need to have indicative signs," he emphasizes. José Guilherme. This process is known as control, an essential activity in the routine of an administrator, and the KPIs They are important allies precisely for achieving this control.
The professor also highlights that in project management work, for example, one of the fundamental aspects of the activity is the status of how complete a project is. “If a 12-month project is one month from its deadline, but only 50% of the project has been completed, it indicates a delay. In other words, in this case, a [missing word - likely "beginning"] is used. KPI which links time until the final deadline with the level of results delivered," he explains.
In this way, it is possible to understand the importance of KPIs. The results that the company you work for or will work for will achieve will certainly require a manager capable of understanding and applying the fundamentals of... KPIs.
A good course of Administration, such as that offered by ESEG, This can greatly help you become a top professional. Check out our entrance exam dates and register today.
