Jargon Free Blog on KPIs In Power BI

KPIs In Power BI

A set of quantifiable statistics used to judge a company's overall long-term performance is referred to as key performance indicators (KPIs). KPIs are used to determine a company's strategic, financial, and operational accomplishments, especially when compared to those of other companies in the same industry. A Key Performance Indicator (KPI) is a visual indicator that shows how far you've come toward achieving a measurable objective. Let's read more about KPIs. A KPI, or key performance indicator, is a metric used by businesses to determine how well they perform in a certain area that is significant and, in some cases, critical to their operations. Gauges, charts with upward or downward arrows, and color codes of red, amber, or green are some of the most prevalent visualization techniques for displaying KPIs (visualizing the status).

Purpose Of KPIs

KPIs (Key Performance Indications) are important (key) indicators of progress toward a goal. KPIs serve as a focal point for strategic and operational improvement, providing an analytical foundation for decision-making and assisting in focusing attention on the most important issues.

Importance if KPI

Of course, there are other reasons, but here are four that jump out to me:

• Employee morale is boosted through KPIs: I believe it is critical, to begin with, this KPI value because it is the least well-known. The culture of a firm has a significant impact on its performance. A culture that encourages and motivates all of its members is more likely to succeed than one that does not. In this sense, KPI tracking can be about recognizing employees' efforts and assuring their sense of accountability and duty.
• KPIs help to achieve and affect corporate goals: KPIs are critical to achieving corporate goals because they keep them at the forefront of decision-making. It's critical that business objectives are adequately communicated throughout an organization; when employees are aware of and accountable for their individual KPIs, the company's larger goals are kept in mind.
• Personal development is aided by KPIs: Not every campaign or product update will succeed in meeting its objectives. However, tracking performance against those goals, whether good or negative, fosters a learning atmosphere. Teams can know exactly how they are performing at any given time thanks to KPIs. They no longer have to wait until the conclusion of a quarter or project to compile the data
• Performance management requires the use of key performance indicators (KPIs): This, I believe, is the most compelling rationale for using key performance indicators. It encapsulates all of the above reasons: what is measured is managed. Employee morale, culture, and capacity, to name a few factors, all play a role in performance. KPIs make performance management easier since they allow everyone to see not only what they're doing, but also what others are doing.
   

When To Use KPIs?

KPIs are used by businesses to assess how well they are meeting their objectives. Low-level KPIs may focus on procedures across departments such as sales, marketing, HR, or support, whereas high-level KPIs may focus on the overall success of the business. KPIs are an excellent option:

• To keep track of progress. "What am I ahead of or behind on?" is answered.
• To calculate the distance between two points. The question "How far ahead or behind am I?" is answered.

How To Create KPIs 

In this example, you'll establish a KPI to track your progress toward a sales target.

Step 1: Select Sales > Total Units This Year from the Fields window. The indicator will be this value.

Step 2: Time > FiscalMonth should be included. The trend will be represented by this number.

Step 3: Select the ellipse in the upper-right corner of the visual and choose Sort by > FiscalMonth, then select the ellipsis again and choose Sort ascending.

Step 4: Check that Power BI has sorted the columns by FiscalMonth in ascending order.

Your graphic will look like this once it's been properly sorted:

Step 5: Select the KPI icon from the Visualization pane to convert the graphic to a KPI. 

Step 6: Drag Total Units Last Year to the Target goals field to add a goal.

Format the KPI if desired by selecting the paint roller symbol in the Formatting box.

• Indicator: The indicator's display units and decimal places are controlled by the indicator.
• Trend Axis: When the trend axis is turned on, the visual displays the trend axis as the visual's background.
• Goals: When Goals are turned on, the graphic displays the goal as well as the percentage distance from it.
• Color coding > Direction: some KPIs are considered better for greater values, while others are considered better for lower levels. Earnings versus wait time, for example. In most cases, a larger profit value is preferable to a longer wait period. High is a decent choice, and you may modify the color settings if you want to.

KPIs Requirements

A KPI visual is created by a designer based on a certain metric. The goal of a KPI is to let you compare the present value and status of a statistic to a set of goals.

 A KPI graphic requires a value-based base measure, a target measure or value, and a threshold or goal.

The goal values for a KPI must be included in a KPI dataset. If your dataset lacks goal values, you can add them to your data model or PBIX file by including an Excel sheet with goals.

Conclusion

This post walked you through the process of developing Power BI KPIs with Power BI Desktop. It also provided an overview of KPIs and Power BI to help users better comprehend them. It went on to explain the essential components of Power BI KPIs as well as how to apply them. Overall, Power BI KPIs are a new capability that can help organizations achieve their objectives by allowing them to use the visualization tools of Power BI to construct their ideal KPIs.