When it comes to project implementation, it is often the case that strategic planning is only as good as its operational implementation. Accordingly, it is sensible to ensure a healthy level of transparency within the implementation framework in order to be able to recognise plan deviations at an early stage and initiate corresponding countermeasures. This transparency can be achieved through systematic performance management. Depending on the strategic objective, relevant key performance indicators (KPIs) are defined and integrated into a system for continuous measurement. The result is a clearly laid-out performance management cockpit that is tailored to the respective target group and offers the transparent presentation of all relevant KPIs.
Figure 1: Selection of relevant performance management KPIs
In principle, the spectrum of possible KPIs is almost infinite, especially when we consider the possible cross sections (e.g. categories, product groups, etc.) and longitudinal sections (e.g. days, months, etc.). Connections to both external crawling data and internal data are established. As shown in Figure 1; the following three areas must be borne in mind:
- SALES (TOP LINE): This category gathers the KPIs used to measure e-commerce activity at a top line level. The company’s score for a particular parameter – e.g. market share for a product category – is always viewed and analysed in comparison to the competition.
- OPERATIONS: Operating KPIs serve to help analyse and better understand developments and changes in top-line results. Details on product line performance (e.g. average sales per listed item in comparison to the competition) or out-of-stock figures can help explain changes in sales and determine a concrete need for action.
- EFFICIENCY & PROFIT: The KPIs grouped in this category measures how efficiently and profitably sales are realised and ultimately how they contribute to the overall result. Key figures such as customer acquisition costs and conversion rates help channel activities to prioritised in an economical fashion in the context of scarce resources.
As mentioned above, there are many more possible KPIs. However, too many lead quickly to “oversaturation” and to overly expansive reports that readers do not find useful. It is therefore essential to focus the report on the truly important variables in accordance with the degree of maturity and the target group.
We will be pleased to help you establish an appropriate goal-oriented performance management system and to develop your tailor-made cockpit for systematic implementation.
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Markus Fost, MBA, is an expert in e-commerce, online business models and digital transformation, with broad experience in the fields of strategy, organisation, corporate finance and operational restructuring.Learn more