What are the advantages and disadvantages of all the different KPI dashboards for SaaS businesses?
Your KPIs overlap and influence each other. Displaying these alongside each other helps you see instantly which goals are being met at the expense of others. You can start to play around with adjusting targets and policies, in order to be more effective overall.
Typically, too, businesses divide their KPIs into ‘high level’ and ‘low level’ KPIs. These are, respectively, the big, overarching goals of the organization and narrower, departmental or individual targets.
The great thing about having these laid out on a dashboard is that you can see how the smaller goals flow into the bigger ones. You get an instant snapshot of which areas are on target and how this impacts on the company’s overall performance. In turn, this can help you identify where problem areas are forming, as well as giving insights that help you hone your targets and business strategies to meet high-level KPIs. Let’s see some tips and tricks to answer for this question!
Review progress in achieving your strategic plan
You should start this process with a set of goals and, ideally, a list of which KPIs you’ll track to help you reach those goals.
Your organization may have many measures; some for specific divisions and departments, others for your operations. It’s a good idea to set targets for all measures associated with your organization, but in this article, we’ll be focusing on KPIs as they relate to your top-level strategic plan.
Select your most important KPI as it relates to your strategy
If you’re a for-profit organization, this is likely a financial measure centered on profitability or revenue, which is what we’ll focus on in for these KPI target examples. If you’re a nonprofit or municipal organization, your most critical KPI could be mission-centric (like “number of people served” or “delivery value for cost”).
Mathematically determine the five-year target for that KPI
Let’s say your most important financial KPI is to double profits in five years. You’ll need to then do the math and come up with that final number. As an oversimplified example, if you make $50 a year, your goal would be $100 in five years. (Let’s hope for your company’s financial security that your numbers are a tad higher than this.)
Work backward from your five-year target to get to your year-by-year target.
Working from our scenario above of growing our $50 profit to $100 over the course of five years, your company is likely going to fit into one the following growth scenarios:
Scenario A: You want to grow profits consistently from years one to five. This means your target would be $60 in year one, $70 in year two, $80 in year three, and so on.
The scenario you choose will determine how your targets will change over a five-year period, which will impact the method by which you execute your strategy. If you haven’t already made this plan, it’s time to meet with the leadership team and do so.
Nail down the rest of your financial KPIs using the process above
Now that you’ve determined your profit target, it’s time to hammer out the rest of your financial KPI targets. Fortunately, once you know your profitability target, you should be able to make assumptions for several other critical KPIs, like revenue and expense, that will make setting those targets easier. For example, you may need to triple your revenue target in order to double your profit. So if your revenue is currently $500, you may need to see it rise to $1,500 by year five. Whatever your specific case may be, be sure to finalize your financial perspective KPIs (or whatever your most important KPIs are, if you’re a mission-driven organization) before moving on!
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