To achieve the set goals Different methods and calculation formulas are used to evaluate the results. Some of them are aimed at a comprehensive assessment, while others determine the profitability of a specific indicator. There are also methods that examine the productivity of employees. For example, the amount of sales of products for the previous month is a general job function email list evaluation criterion, and the number of transactions carried out personally by one of the sales managers is a specific indicator.
In practice, it can be quite difficult
to correctly define KPIs, despite the fact that this approach has been used for a long time and very widely. If management makes a mistake in choosing indicators for assessing the effectiveness of the enterprise, or chooses incorrect methods for determining them, this can lead to an incorrect strategy for further development and the risk of financial collapse of the company.
For example, let’s consider profit
as an indicator of the efficiency of the enterprise. Its planned annual size can be obtained if additional discounts for clients are used. On the one hand, this will lead to an increase in product sales, but at the same time, commercial costs and logistics expenses will increase.
As a result, the profitability of the business
will decrease significantly. This will automatically use an autocomplete function on your lead to a decrease in the company’s competitiveness in the market, as a result of which the enterprise will most likely lose a certain market share next year.
The owners of the organization may consider such a decrease in profitability as their lost profit and make claims on this matter to the company’s management. Therefore, it is necessary to evaluate the efficiency of the enterprise, summing up the annual results, and in case of its decrease, identify the reasons.
Objectives of the analysis of enterprise performance indicators
The goal of the enterprise is to achieve the planned result. The strategy for achieving it includes three main components:
- main objectives of the activity;
- the main elements of policy that set the direction or narrow the field of activity;
- programming of key actions aimed at achieving the intended objectives and within the boundaries of the applied policy.
The goal set before the enterprise is usually expressed in the form of achieving some quantitative or qualitative indicators. This may be the sale of products for a given amount, the conquest of a certain position (market share, position in the rating, etc.), the value of the company itself as a market object, other results.
the paths to them and the means are set, otherwise the company may start to act according to the principle “all means are good on the way” or “the end justifies the means”. Such a policy can lead to serious negative consequences in a short time. Taking this into account, the leading place should be given to the principles of activity.
Over the past 7 years, we have conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.