At the end of the day we all need just one thing...
Clear, Concise and Precise information that can facilitate management discussion and action, quickly.
KPIs for Planning-your crystal ball in business
Planning is an essential part of all businesses. Too often we think the opposite, that it's a burdensome year end ritual. The businesses that think like that fail to understand that it should be entrenched in the day to day paradigm of a business rather than the year end ritual that some grudgingly undertake and most don't bother.
As a minimum it should be a twelve month planning cycle but with that thought comes the notion that we need to look at it every 12 months. So after nine, ten or eleven months into the year we are still relying on data formulated ten months or more prior. Sounds like nonsense to me. The numbers need to be updated throughout a year to take into account both the changing competitive environment and the changing economic environment.
Why do we bother planning at all?. Planning provides us with the information to take corrective action, to set direction, to take advantage of opportunities, to know if we anticipate resource depletion, to allocate the business resources, to know if we are going to be short of cash etc. That's what planning is about - it's the crystal ball of your business, it will, based on today's information tell you what to expect.
Now there is emphasis on the word "today", for tomorrow your plan is no longer (somewhat) valid. Hard words, but by having that mind set you come to understand that things do in fact change and you need to be aware of the impact every day has. By reviewing your plan throughout the year you'll be better informed and better prepared for any business shocks that might cross your path.
So what do you do with your planning information? If you were insightful you should have produced a range of financial forecasts and also a range of non-financial indicators. With the right accountant or accounting software you can easily track and compare financial data and some systems even allow the tracking of non-finacial data, but as a general rule that becomes an "export to excel" exercise to analyse. And once that's all done you'll get the nice report with comments - but when? This reporting methodology takes time. With a real lot of luck you'll have the information two weeks after month end. And it's not uncommon to have the information 30 or even 60 days after the event. Even within two weeks of month end your data could be as much as six weeks old. There is a solution.
And the solution is the creation of a performance dashboard that tracks your key numbers or metrics in real time. You would have notice that when you are handed your month end reports your eyes go directly to the numbers you deem to be important. You generally don't worry about the detail. It's that handful of numbers you pick up that tells you everything is fine or not. That's your dashboard right there. And more than that a performance dashboard can track those non-financial metrics in real time as well.
Consider your Performance Dashboard as an essential tool to track your Key Performance Indicators and manage your business today. Information to today makes decisions today - when it matters most. EzzyKpi provides all the tools to make it simple and easy to track your key numbers. Make effective business decisions today based on today's metrics. Try our no obligation 30 day free trial............www.ezzykpi.com/