Lack of coordination of tasks
If indicators are created for the sake of the process of creation itself, and not for the purpose of improving the efficiency of the enterprise, then this only promises to produce a disjointed information baggage.
Lack of coordination of tasks
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This usually happens when each department and division phone number identifier philippines reates its own performance indicators. Such a system can provide statistics, but does not help in improving productivity.
In the area of software solutions, there is a whole group of systems called BI (Business Intelligence). It allows you to control indicators through the work of analysts who select their own KPIs for each task from a standard set.
They then generate reports that give an overall picture of the situation. The mistake is that some data points to favorable conditions, while others point to the opposite. Due to the limited picture of KPIs, different departments may start to give opposite information.
As an example, consider the supply chain of an organization that was focused on reducing costs.
The main goal was to acquire the cheapest raw materials. To get a discount, the service employees purchased raw materials in large quantities. This overstocked the warehouse, froze financial resources in stocks and diverted funds from circulation.
Moreover, to achieve good discounts, they had to purchase raw materials with a higher percentage of defects. This in turn affected the workload of production.
The production department had its own KPI in the form of equipment utilisation coefficient (employees received a bonus if it exceeded 70%). To ensure the highest utilisation, employees of this department manufactured large volumes of individual types of goods.
Lack of coordination of tasks
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This allowed to reduce the time of reconfiguration of the machines, but it complicated the work of the sales department, for which another KPI was set - fulfillment of the sales volume. In order for customers to be satisfied, it is necessary to provide specific products in a certain period of time, and not sell one product one month and another the next.
In the end, each department accomplished its assigned tasks, but the activities of the entire enterprise fell into disarray.
Lack of persons responsible for the indicators
The motivation system does not provide for an increase or decrease in bonuses for department heads for achieving or failing to achieve set standards.
In this case, first of all, you need to understand what the manager can do - what scale of sanctions he has the right to bring down on the employee. If the manager cannot influence this in any way, then his position is of no use.
In the business sphere, there will always be controversial situations between employees and the organization, which are the responsibility of the manager. And it is not enough to just verbally praise or reprimand employees, so KPI indicators need to be implemented in the motivation system.
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Focus solely on financial KPIs
Profit, marginal profit, sales volume are final indicators by their structure. In other words, the organization performed some actions and received a certain result, but what exactly was done to achieve this result is not clear.
If we want to create conditions in which indicators become management tools rather than merely supporting statistics, we must disclose all financial results down to their underlying non-monetary data.
For example, what should a manager do to meet shipping standards? How many meetings should he hold and how many contracts will he have to sign?
If you identify all these non-financial aspects, you will be able to motivate employees more accurately. Only managers should pay attention to achieving financial indicators.
Another example is the goal of increasing income. How to achieve this? Increase production volumes, update the range of products, or increase the number of outlets? In order to correctly answer these and some other questions, one should look at the above goal systematically.
Failure to implement KPIs into the organization's overall accounting and planning system
If you can't take KPIs from the accounting system, what good are they? When creating a scheme for these indicators, you need to determine in advance the specific type of accounting structure from which it is taken (CRM, operational accounting system, or production accounting).
Failure to implement KPIs into the organization's overall accounting and planning system
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In addition, they should be correlated with the financial management system. Experts do not recommend implementing KPIs if you do not know who is the data provider for each indicator and what formula is used for calculation.
Implementation of the KPI methodology is not a cure for all the diseases of the enterprise. It is necessary to take the idea of introducing performance indicators as seriously as possible, because it implies some risks.
But if you can manage KPI indicators correctly, you will increase the company's performance, increase sales and adjust the activities of employees.
Download a useful document on the topic:
Checklist: How to Achieve Your Goals in Negotiations with Clients
Briefly about the main thing
In 2025, key performance indicators (KPIs) remain a critical tool for measuring success and managing a business. They help organizations track progress toward strategic and operational goals, identify strengths and weaknesses, and identify areas for improvement. Key KPIs that are important to track include:
Revenue: An indicator of the overall financial health of a company.
Gross profit: A measure of profit after subtracting the cost of goods sold.
Net profit margin: a ratio that measures a company's profitability.
Conversion rate: The percentage of visitors who take the desired action on a website.
Average Order Value: The average amount spent by customers per transaction.
Customer lifetime value: the total amount of revenue from one customer over the entire period of cooperation.
Return on Investment (ROI): A measure of the profitability of an investment or marketing campaign.
Customer Retention Rate: The percentage of customers who continue to do business with a company.
Net Promoter Score (NPS): The likelihood that customers will recommend a company to others.
The correct selection and regular review of KPIs ensure stable growth and development o