Key Performance Indicators: Communicating Corporate Measures

This report provides an overview of Key Performance Indicators (KPIs) in corporate reporting, highlighting their rationale and the issues encountered in their implementation. KPIs are crucial for reflecting organizational success and monitoring progress towards strategic goals, offering insights into both financial and non-financial aspects of business performance. The report identifies challenges such as data inconsistencies, problems with data integration from multiple sources, and the use of inadequate tools like Excel, which can lead to errors and security vulnerabilities. Effective KPI reporting requires addressing these challenges to ensure accurate and transparent communication of corporate performance, driving better strategy execution and long-term success. Desklib provides a platform for students to access this and many other solved assignments.

PROPOSAL FOR POSTER
Area of current interest- Key Performance Indicators
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Table of Contents
PROPOSED TITLE FOR POSTER.........................................................................................................3
RATIONALE FOR KEY PERFORMANCE INDICATORS IN REPORTING.................................................3
ISSUES IN KEY PERFORMANCE INDICATORS IN CORPORATE REPORTING......................................4
REFERENCES.....................................................................................................................................5
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PROPOSED TITLE FOR POSTER
“Key Performance Indicators- Communicating the measures that matter for corporate
performance”
RATIONALE FOR KEY PERFORMANCE INDICATORS IN REPORTING
A Key Performance Indicator (KPI) is usually referred to as a measure used in reflecting the
organisational success and progress that it has made in context to the specified goal
(Parmenter, 2015). The idea behind the use of KPI in corporate reporting is to keep a close
monitor over the progress in direction of the strategic goals and objectives which are laid in a
strategy map of the company (del-Rey-Chamorro et al., 2003).
The rationale behind choosing Key Performance Indicator as an interest area in corporate
accounting is due to the reason that it is a management’s own measures of success which helps
the investors in pondering the insights about the progress and the movement of the business in
terms of the both financial as well as non-financial terms (Wilkinson, 2015). Due to the use of
the KPI in corporate reporting, the trends in the business becomes more transparent and helps
the management of the company to stand accountable by illustrating the good practice of
reporting on KPI (Smith and Van Der Heijden, 2017).
The underlying importance of using KPI as an important reporting area is that it helps in
improvising the strategy execution by effectively aligning the business activities with the
strategic objectives and drawing individual’s actions as well towards the same (Wilkinson,
2015). Thus integration of Financial and non-financial KPIs drives a company towards greater
focus for the achievement of long term success (Smith and Van Der Heijden, 2017).
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ISSUES IN KEY PERFORMANCE INDICATORS IN CORPORATE REPORTING
Some of the main challenges encountered in KPI reporting are as under:
Problems with data
Due to the multiple systems and silos across the organisations, it becomes an issue for KPI to
pull the data together from numerous sources. This also leads to increasing the lead times and
rise in the data governance costs for the organisations (Wilkinson, 2015).
Problems with consistency
Another issue that may encounter with KPI reporting is of the consistency as there are various
departments and divisions in organisations which use the same term with multiple meanings.
There may also be the usage of the different formulas to calculate the indicator which leads to
non-standard reports. This leads to inconsistencies in representing data and leading to false
interpretations (Personal et al., 2014).
Problems with tools
Due to a lot of functionality involved in the use of the number of tools that assist in KPI
creation, there is an alternative that most of the organisations use to create KPIs i.e. excel. This
leads to the creation of the lack of interactivity and disconnected spreadsheets which are
usually error prone and offer little security to the data (Personal et al., 2014). This may thus
lead to an issue of the unauthorised changes and the exposure of the sensitive data of the
organisations that seek for alternatives of the tools such as SAP, IBM, MicroStrategy, and
Teradata and so on (Parmenter, 2015).
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REFERENCES
del-Rey-Chamorro, F.M., Roy, R., van Wegen, B. and Steele, A., 2003. A framework to create key
performance indicators for knowledge management solutions. Journal of Knowledge
management, 7(2), pp.46-62.
Parmenter, D., 2015. Key performance indicators: developing, implementing, and using winning
KPIs. John Wiley & Sons.
Personal, E., Guerrero, J.I., Garcia, A., Peña, M. and Leon, C., 2014. Key performance indicators:
A useful tool to assess Smart Grid goals. Energy, 76, pp.976-988.
Smith, S. and Van Der Heijden, H., 2017. Analysts’ evaluation of KPI usefulness, standardisation
and assurance. Journal of Applied Accounting Research, 18(1), pp.63-86.
Wilkinson, J, 2015. Why KPIs Are Important. Online available at (https://strategiccfo.com/why-
kpis-are-important/) last accessed March 2019.
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