
Meaning KPI
In this article, we're going to talk a little more extensively about the basics of an organizational dashboard. The basis of it is KPIs. And a KPI stands for "Key performance indicator" or "Critical performance indicator. These are the indicators that show how your organization is doing and whether you're achieving your goals. They make progress measurable and concrete.
Always SMART
You set up a good KPI using the SMART principle. SMART stands for:
- Specifically
- Measurable
- Acceptable
- Realizable
- Time-bound
See KPIs as a clock
In this explanation, I want to make a comparison with a clock. In the structure of a clock there are all kinds of cogs that are connected to each other, just like KPIs. You can think of these KPIs as meters and all the meters together is a KPI Dashboard.


Now we still see the clock, but now it looks more like a KPI dashboard. All the KPI wheels together look like a KPI dashboard as a whole. You can think of the KPIs as different gauges.
KPI Examples
Critical performance indicators allow you to quantify virtually any metric you want. Whether it's to drive your macro goals or to create targeted KPIs for departments such as Sales and Finance, the possibilities are extensive!
I want to take you through some common KPIs so it becomes a little clearer. I also want to show how these KPIs are connected. Starting with "Sales KPIs" and then "Finance KPIs.
Tip: Every organization has its own goals, and therefore its own Key Performance Indicators. Therefore, look at what is relevant and important to your organization!
Sales KPIs
Let's start with standard "Sales KPIs.
- Visitors
- Conversion
- Order Value
- Turnover
You need 1. visitors in your store or webshop. 2. Conversion is the conversion rate, that is, the percentage of visitors who actually make a purchase. The 3. order value is the average value of an order. And 4. Revenue, of course, is the revenue that results from 1, 2 and 3.

How are Sales KPIs connected?

I also want to show the connection with an example. Suppose you have a lot less visitors from 225,375 to 100,000, then immediately your sales drop. But this is just as true for your conversion and order value, if something changes at one of the first 3 KPIs in the Sales Flow then it will directly affect your final sales. So these Sales KPIs are interconnected like the radars in a clock.

Finance KPIs and their connection
Then we have the "Financial KPIs. Standard Financial KPIs within an SME store or webshop, for example, are: 5. Purchasing, 6. Margin, 7. Cost of Sale and 8. Gross Profit.

Suppose that purchasing is 40% of sales, and if this increases to 50%, you will see that your Margin becomes lower and your Gross Profit also becomes lower. You can see this in the example in both the ratio percentage and absolute euros. So these Finance KPIs are also intertwined like the wheels in a clock.

Summary and conclusion
In the examples above, you can see how all those KPIs in a Dashboard are connected, just like in the example of the clock's cogwheel. If something spins somewhere, it affects the other parts.
Kpi's are essential because they show you whether you are on track with your plans. They help you track whether an idea is working and whether your goals are achievable. Without these indicators, it's hard to see how far along you are and steering your organization is a lot harder.
When choosing kpi's, you have to be careful not to set too many goals without a clear focus, because then you won't see the forest for the trees. With the help of a good specialist, such as a business consultant or controller, you can get the kpi's you really need in focus.
A good dashboard is indispensable for tracking your kpi's. Such a dashboard converts important business data into clear visuals, so you always know where you stand. Read more about why you should use a dashboard here.