Agricultural practices have been continuously developing in the past years due to science and technology. However, progress comes with a cost. A 2021 study reports that food and agriculture are responsible for 25% to 35% of global greenhouse gas emissions.
Modern agricultural systems are different compared to organic farming systems. The former uses heavily agrochemicals that increase pollution and negatively affect the underground water supplies. Most nutrients in organic agricultural systems come from biological matter additions, including manure, compost, and cover crops. These supplements feed not only the plants but also the land’s microorganisms.
Technological advancements influenced the agricultural sector as well. A method to monitor the impact of technology on the agronomical field is the use of key performance indicators (KPIs). While designed to make farming efficient, modern machines require energy use and other resources that could generate high emissions levels.
By using KPIs in the monitoring process, every farm owner will be aware of both its positive impact on the environment and the damage it may cause. FAO estimates that emissions from animal agriculture represent 14.5% of annual anthropogenic greenhouse gas emissions. By measuring the inputs and outputs, farmers can control and implicitly reduce emissions.
According to The KPI Institute, a KPI is “a measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s activity.” In the agricultural sector, KPIs increase productivity and profitability, help manage daily operations, and contribute to informed business decisions.
KPIs in Farm Management
The increase in crop yields has been attributed to modern agronomy, plant breeding, agrochemicals such as pesticides and fertilizers and technical advancements but at the expense of ecological and environmental degradation. Selective breeding and advanced animal husbandry procedures have enhanced meat output, but these methods have generated concerns regarding animal welfare and environmental pollution.
Some of the KPIs that should be considered in the agricultural sector are:
These KPIs support the decision-making process and give an evolutionary overview of the farm. For example, monitoring the farm size over the years shows the dimensional growth of the initial placement (storage spaces, land, stables). Knowing the percentage of irrigated farming land gives insights into future costs (water supply, irrigation system). It can help approximate the time until the entire surface will be properly irrigated. Cultivated land area and costs for harvesting insights can predict future harvesting costs of a larger (or smaller) surface. Monitoring pesticide consumption indicates the level of soil degradation, water contamination, and the risks of accidentally killing beneficial insects and non-target plants.
Meanwhile, it is important to note that each farm type has specific KPIs based on their characteristics, goals, and operations. For example, farmers on a dairy farm should consider monitoring:
# Milk yield per cow
# Milk flow rate
% Dairy calves deaths under 1-month-old
$ Daily cow replacement cost
$ Concentrate cost per liter of milk produced
# Cows managed per person employed
Agricultural Productivity and Costs
A 2022 study affirms that through accessing finances, the U.S. agricultural sector sequestrated more carbon in 2020 compared to 2019. Overall, U.S. greenhouse gas emissions decreased from 2019 to 2020 by 10.6%. Thanks to technological advancements and innovation, farmers and ranchers maximized their productivity while using the same quantity of inputs.
When analyzing costs, a Market Intel article highlights that chemicals and fertilizer make up the largest share of on-farm expenditures, up to 17.5%. To optimize expenses and lower the contribution to environmental degradation, the use of these materials should be reduced.
In addition, a 2019 study concludes that effective scheduling of land preparation, plantation, and harvesting; use of early maturing crop varieties, seedbeds, and transplanting procedures for intensive land through crop rotation; selection of disease, insect, and weed control methods; and efficient irrigation and fertilizer use are all feasible measures to increase crop yield and production and revenue.
To monitor productivity and costs, farmers can use these KPIs:
# Unit production time
$ Energy costs per unit of production
# Energy used per unit of production
% Input waste materials
# Production per day
FAO describes productivity “as a ratio of a volume measure of output to a volume measure of input use.” It can be determined at any geographical scale for a singular instance (farm, commodity) or a group of farms. Most ranches produce multiple commodities with many inputs that generate costs.
As previously said, advanced technological solutions that enhance productivity without increasing costs have emerged on the market. If the farmer does not have the finances to invest in these technologies, another solution would be to decrease the commodities types and increase the quantity and quality of produced items. This way, the brand focuses on a few product types, gains customers, and increases sales. While constantly developing a customer base, the commodities price could be adjusted to increase profit.
To acquire an in-depth understanding of KPI measurement challenges and ways to address them, join The KPI Institute’s certification program in KPI measurement. The KPI Institute provides toolkits, templates, case studies, and good practice examples from some of the world’s most successful firms, as well as thought-provoking exercises. Enrolled participants will also get free access to the smartKPIs.com premium content, the world’s largest library of documented KPIs.
The business intelligence and analytics industry reached over $ 19 billion globally in 2020, albeit the derailed economic performance caused by the pandemic. The business intelligence market growth experienced a 5.2% increase, and the data analytic growth rate is expected to rise in the coming years as companies realize the need to manage data to make better decisions.
According to Angela Ahrendts, a former retail Vice President at Apple Inc., customer data is the most significant differentiator among businesses in this era. Companies that know how to maneuver heaps of data to create strategic moves usually succeed. To determine how companies adopt and implement data analytics, let’s first understand how data can make a company’s operations efficient.
Data Analytics: Four Ways to Increase Company Performance
As discussed earlier, data analytics is beneficial for making more accurate business decisions. Managers and executives can take action on the data insights they get to drive better competitive advantages in their markets. There are four ways data analytics can accelerate business performance:
The first way is by creating informed decisions. One of the key benefits that businesses look out for when dealing with data analytic solutions is developing better and more accurate decisions from the insights they get from analyzing data.
There are two processes that ensure the development of better decisions: predictive analytics and prescriptive analytics. Prescriptive analytics are utilized to project the way companies react to forecasted trends, whereas predictive analytics focus on events that might occur after analyzing collected data.
Improving efficiency is another route. Data analytics is highly beneficial especially in the operation management for streamlining operations. For example, companies can retrieve and assess their data relating to supply chains to discover where delays in their supply networks happen or to forecast areas where problems emerge and use these insights to prevent any issues.
Data analytics also enables risk mitigation. To cut down losses, data can be utilized to reduce physical and financial risks in business. Through collecting and assessing data, inefficiencies can be either identified or predicted. Also, potential risks are revealed to inform management on creating preventive policies.
Lastly, data analytics enhances security. As many businesses confront numerous data security threats in today’s era, it is essential to keep the company’s cybersecurity out of dangerous attacks that cause financial or brand image blow. A company can evaluate, process, and draw insights from its audit logs to showcase the source of previous cyber breaches. The outcome of this exercise would be to recommend possible remedies to the problem.
Join The KPI Institute’scertification course on data analysis today to learn more about data analytics, improve your analytical skills and make wise business decisions.
Horizontal progression or lattices started to spread among employees, particularly millennials, years ago. Many individuals are working to progress their career paths horizontally instead of vertically. This raises two important questions: Is it better to move up the ladder or across it? Is it better for the companies to hire those who progress vertically or horizontally?
Vertical career progression refers to usual career growth within the same field. Being promoted from a marketing executive to a senior marketing specialist, and then to a marketing manager is an example of that progression. As for horizontal career progression, it refers to growing skills in more than one field. For instance, an individual may start working as a marketing executive, and then decide to shift to the sales department to gain more experience in selling products and dealing with customers.
Vertical career progression has always been the common career path in the workplace across the industries. However, change has been going on at a fast pace. All types of organizations (profit, non-profit, public and private) are all experiencing quick changes in various areas. Especially after the pandemic, things have developed massively, and new skills and competencies are arising everyday in the workplace, particularly in companies working on creating innovative and agile environments.
Benefits of Horizontal and Vertical Career Progression
Both types of career progression are essential and beneficial in the workplace as they will enable managers and leaders to have a wide range of skills within one department. With organizations reducing their boundaries every day due to the changes occurring–managers, leaders, and recruiters need to look at career progression from a different point of view other than the traditional one.
Employees going up the ladder will benefit their departments with their long experience and in-depth knowledge in terms of delivering their projects or tasks on time and with high quality. Even when they deal with their clients, they will be able to reflect easily using their long experience in the field. Moreover, they will be able to transfer their experience and knowledge to the younger ones via coaching, feedback sessions, and on-the-job learning.
Due to the wide range of skills, employees moving across the ladder are also vital and bring a positive impact to their departments. Despite their short experience within one field, they are equipped with a set of skills that will be beneficial to various situations. For instance, an employee who spends some time in the marketing and the sales department will have some experience not only in promoting the company’s products but also in communicating with the customers.
The marketing department can benefit from such employees in enhancing their customer outreach and passing on knowledge to others through tips or advice in communicating with customers. This can be valuable in companies trying to embed agility within their cultures. Most common types of agile environments include scrum and lean. These types of environments require flexibility, continuous problem solving and discovering solutions. As a result, both types of employees will provide lots of ideas and solutions. They will look at problems from different angles.
How Companies Support Employees’ Career Progression
According to Deloitte, due to today’s flatter organizational structures, businesses have less options for developing their employees and moving their career up the ladder. So, lattice organizations are expanding career tracks to incorporate lateral, diagonal, and planned descents as a strategy to help employees progress. They report that employees become more adaptable through career movements across organizational silos, improving their strategic flexibility.
Incorporating different options of career development will require companies to change the way their job structures, work cultures, and career development plans. However, companies will reap its sweet fruit through having more motivated and productive employees, innovative culture, better performance, as well as more flexibility and adaptability. Moreover, it will help companies face their current challenges such as high turnover rates and employees with limited skills that cannot balance the needs of today’s industry.
In the end, it is believed that even with all these changes undergoing in the world, both career paths are needed within the workplace. Employees get to choose the career path that suits their priorities and future plans. But at the same time, their choices have to be well planned and thought of because there is a huge difference between growing horizontally in a structured manner and hopping from one job to another. In the same context , companies need to go beyond the traditional linear career path and embrace other ones to be able to come up with the changes going on.
Whether you go up or across the ladder in choosing a career growth, it is important to be competent. Invite your colleagues and join The KPI Institute’s Certified Performance Management Professional course to boost the knowledge and skills on improving performance at all organizational levels. Visit The KPI Institute’s website for more information.
“If you aim at nothing, you will hit it every time.” — Zig Ziglar
When the cost of managing and measuring your performance is less than the tragic risk of hitting nothing, it pays to get your KPIs right.
KPIs, or key performance indicators, can prove that success is a result of not just one huge undertaking but a series of actions. These actions are taken by decision-makers that consistently rely on data rather than guesswork.
In this guide, you will learn the basics and benefits of KPIs and beyond. Explore the top articles, webinars, reports, and other materials produced by The KPI Institute, a leading global research institute specializing in business performance and KPI research for over 17 years.
Topics include:
What Is a Key Performance Indicator?
Why Companies Should Use KPIs
KPI Examples
Applying the KPI Best Practices
The KPI Measurement Framework
What Is a Key Performance Indicator?
The definition of a KPI, according to The KPI Institute, is “a measurable expression for the achievement of a desired level of results in an area relevant to the evaluated entity’s activity.”
“If a decision support system is put in place, users need the right data granularity and the guidelines or context for making the right decisions. All of these reasons have an underlying story, and top-performing organizations are able to clearly communicate that story to their employees.”
“As performance management & measurement is shaping up as a fundamental capability for organizations across the globe, there are still multiple challenges to be overcome.”
“Nowadays, the challenge is not about accessing information, as most companies are managing large volumes of data. The challenge is to decide which data is the most important for decision making.”
“What have been some of the changes that the Performance Management field has experienced over time? What are some one-size-fits-all style KPIs that any company can employ?”
Discover the role of KPIs in designing a rigorous Performance Management System (PMS) to ensure an optimized implementation across all organizational levels.
Compare KPIs and other performance evaluation criteria, identify the common KPI pitfalls, and discover how to use KPIs to create synergies between departments.
“In many cases, the key performance indicators (KPIs) monitored do not seem relevant as they are not connected to the strategy. To better understand how this problem can be addressed, we must first identify its possible causes.”
“What are the most important guidelines to follow when selecting KPIs for strategic objectives? What are the most efficient KPI Selection techniques, most recommended KPI selection environments, and some Value Flow Analysis technique examples?”
“A KPI implementation project plan provides a structure for the implementation of an organization’s performance management system. Once the project plan is set, all types of activities would have a clear deadline and designated responsibilities.”
“When formalizing and implementing a performance management system (PMS) based on key performance indicators (KPIs), there are multiple activities to be considered and many stakeholders to be engaged in the process. Therefore, you’ll need a project plan to make performance management an ongoing process within your organization.”
“An important component of performance measurement is represented by the data collection capability. However, when applied in the organizational context, this process is neither easy nor lacking obstacles, as practitioners often discover.”
“KPI selection is a process which seems simple, yet is inherently complex, due to the interdependencies involved. Here are 15 things to consider before embarking on this journey.”
“Just reporting performance data will not ensure the improvement of results. Improvement is only possible when decisions are made based on the insights provided by data.”
KPIs are not just about understanding and working with numbers. Using KPIs requires stakeholders to fulfill a vision and commit to ensuring success across all levels of their organization. If you would like to learn how to select the right KPIs for your organization, sign up for The KPI Institute’s Certified KPI Professional and Practitioner live online course today.
Designing and implementing a Performance Management System (PMS) based on performance measurement tools such as key performance indicators (KPIs) is a thorough step-by-step process. It requires effective management of all the phases of the implementation process and proper allocation of responsibilities to all the stakeholders involved. With this, the KPI implementation project plan lays emphasis on conducting KPI selection workshops.
Whether or not the PMS within your organization is comprehensive, KPIs can be measured across organizational layers: Corporate/Organizational, Divisional, Departmental, or Individual/Employee levels in accordance with the organizational context. For these performance indicators to be measured in standardized tools, such as a balanced scorecard, they need to be selected, and such selection should occur during dedicated meetings.
Such meetings require the attendance of specifically allocated stakeholders to provide constructive insights and foster a corporate community culture based on continuous improvement. As a line of practice, the participants of these workshops hold positions, such as department heads, strategists, performance analysts, members of the performance management office, and allocated members of the Board, all based on their availability. Note that other members could attend the workshops as per company practice. Attendance at these important meetings requires an invitation, though.
The invitation is a crucial, pre-workshop phase, as it sets the tone, pace, and mindset of the delegates who will join the event. Such invitation is generally in the form of an email with quite some content and attached materials. The email aims to provide contextualization and reasoning behind the request to certain members of the organization to attend the workshops. It is a request that comes from the Strategy Office or the Performance Management Office or whoever oversees the Performance Management practices in the organization, at least two to three weeks in advance of the date of the event.
What should be included in the KPI selection workshops invitation?
Brief introduction about the upcoming workshop;
Logistical information such as date, time, and location of the event;
Detailed KPI selection workshop agenda;
Reading materials and corporate documentation attached
What are the key documents to be attached to mentally prepare our participants and make this workshop a success?
As a line of practice, it is recommended to share educational materials, prepared by the Performance Management Office, related to KPI selection, KPI Alignment practices, and Performance Measurement and Management tools. The delegates, whether or not they are practitioners in the field, are invited to go through the materials;
Strategic and Performance Management tools linked to previous performance cycles, such as Corporate Strategy Plan, Organizational Scorecards, Dashboards, and Portfolio of Initiatives, must be included.
In certain organizational contexts, a written note from top management and C-Suites may be added in order to highlight one factor: The involvement and support of top management in the design and implementation of the framework. This note could be very beneficial buy-in wise as well.
Setting the right tone and mindset in preparation for the workshop is very much advised. The delegates, especially after the workshops occur, will act as champions in disseminating knowledge and replicating the KPI best practices in their respective departments. Furthermore, it will support the ultimate purpose of securing the much-required buy-in from middle managers and employees across departments towards the PMS design.
If you would like to learn more about KPI selection practices and the follow-up activities to the KPI selection workshops, we kindly invite you to sign up for The KPI Institute’s Certified KPI Professional and Practitioner training course. It will lead you through all the phases of the KPI implementation project plan.
