The capabilities of key performance indicators system as a tool for business decisions

Abstract

Importance: the key performance indicators system is an important tool when making business decisions. The tool is suitable for transforming the strategy of a commercial organization into a comprehensive set of specific and measurable financial and non-financial performance indicators essential for strategical goals achieving. The scientific work uses a practical example to present an approach to developing the key performance indicators system. The proposed system of performance indicators is the tool for monitoring, analyzing and assessing the attainability desired objectives, allowing to evaluate the effectiveness of business processes and the work of employees, as well as give early warning of negative trends in order to make the necessary decisions. Purpose: analysis of the balance of key financial and non-financial performance indicators, development of a KPI system for an industrial enterprise case study. Research design: literature review on the issues of compiling the key performance indicators system via the Google Scholar and «elibrary» scientific search engines. The following formalized and unformalized methods of financial analysis, such as, comparison, statistical evidence, information consolidation, data pooling, classification and analytical tables have been used during the work on the study. Results: the key performance concept indicators was defined and their role in the strategic management of the company has been revealed; the main functions of the key performance indicators system and the principles of its formation have been presented; the balanced scorecard, both a tool for strategic analysis and the most popular concept based on monitoring goals through KPIs, has been considered; the methodology for developing a key performance indicators system and the sequence of stages of its formation has been studied. An analysis of the balance of key financial and non-financial performance indicators has been also carried out through the construction of a strategic map. Through an analysis a key performance indicators system has been developed using the example of an industrial enterprise.