In an era of digital transformation, data makes the world go round. Businesses rely on integration and need APIs to function smoothly. All this dependence on technology simply means that data is vital to almost every organization under the sun.
While the world has grasped the importance of data, not everyone can make use of this data to manipulate their business in the right direction. Using data to influence the major decisions in business can boost profits and take your revenue to the next level.
How can this be done? Well, to put it simply, you need to view your organization’s Key Performance Indicator (KPI) through a data-oriented lens and use the data to give your KPI a nudge in the right direction.
We’ll talk about 6 methods through which this can be achieved.
1. Don’t Be Shortsighted
Data-driven enterprises think about where they are, decide where they want to go, and how they want to get there. To make sure they progress steadily, they establish KPIs to monitor the success of business operations, departments, projects, employees, and initiatives. Very often, these organizations also set up a panel (or more) of decision-makers who collectively ensure that business aims, company practices, and technology implementations are in tandem and going according to plan
In other words, you have to think about long-term goals before every business decision you make. Look at the big picture, and figure out where you want to be 5 years down the line.
2.Use KPI Dashboards for Decision-Making and Systems Thinking
The different branches or components of your business need to understand business goals and KPIs and their connection with each other. Instead of locking data away in silos, use APIs to allow the departments of your organization to understand what is happening and how they can do what is best for the company in the long run.
This will also help the business prioritize its actions at any given time and make sure that every decision made is backed by the data. Furthermore, it will allow the technical and business components of the business to work together with no friction.
3. Use Existing Framework of Reference for Faster Orientation
All dashboards, and the metrics within them, either end up building affordances that speed up orientation and decision-making or dissonances which will slow down the Observe, Orient, Decide, Act loop.
One way to create affordance and decrease dissonance is to utilize frames of reference that the audience of your dashboards is already familiar with. Also, when you extend an existing frame of reference it lets new dashboard users orient themselves to the new frame of reference more easily.
4. Utilize Critical Thinking When Relating Thresholds to KPIs
Once you’ve applied a metric to the threshold of your KPIs, you have to think about the thresholds that you want to conceptualize. The three basic thresholds are percentage deviation, hard ceiling, and hard floor.
- Percentage Deviation: This type of threshold tracks if a particular KPI differs from the previous KPI by a large percentage. They are useful when dealing with large deviations where the outcome swings between 2 extremes.
- Hard ceiling: Some deviations are too small to alert the percentage deviation threshold. In this case, applying a hard ceiling fixes this and establishes a number that someone must pay attention to no matter what the trend.
- Hard Floor: Often, businesses won’t put in lower bound thresholds because they think lower numbers are always great news. However, at times numbers drop greatly because of unforeseen circumstances. A hard floor threshold corrects this problem.
5. Manual KPI Reporting is Always a Bad Idea
If you have to manually report your KPI stats, you’re better off without it altogether. This is because it incurs a lot of unnecessary costs and can be pretty time-consuming. Automated KPI collection, management, and tracking is a vital part of speed and agility. Because of this, avoid relying on manual KPI reporting as much as possible.
6. Remember What the KPI is There For
At the end of the day, KPI exists to help people make informed decisions about the business. They don’t have much intrinsic value, but their value is derived from the decisions based on them. When coming up with a KPI formulation you need to determine two factors.
Firstly, who is making the actual decision? Equally important is the level of precision they need to make a good decision. Basing your KPI formulation on the answers to these two points can help improve the directional accuracy when making important choices.
Growing your KPI system is a great way to keep improving the metrics of your business. And to do so you can easily make your API ecosystem flourish with several MuleSoft services. So, if you want to get ahead in the big game, keep an eye on the data and watch your business reach heights you never imagined before.