KPI reports: Exploring the building blocks and advantages in professional services

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“The goal is to turn data into information, and information into insight.”

~ Carly Fiorini, former CEO of Hewlett-Packard 

What goes through your mind when you hear the term “KPI report”? 

A small percentage of people are already big believers, having seen the results that KPI reports can create. Another slice of folks might not be entirely sure what a KPI report is. And the rest? Well, we can’t blame you if you’re muttering, “Please, not another report!” while pulling your hair out.

But stick with us: a KPI report isn’t just another TPS report. It’s an instrument that showcases progress toward specific goals, and it’s something professional services firms can use to truly move the organization forward through more strategic decisions. Plus, depending on the services your firm offers, you might even find the KPI reporting process useful with your clients.

Let’s dive in with a definition.

What is a KPI report?

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A KPI report is a business tool that outlines and illustrates how well a business is doing in various ways. This report presents a number of key performance indicators (KPIs) and puts them in context against specific business objectives and goals.

Businesses can track KPIs at all sorts of levels and across numerous metrics, but unless the right KPIs are presented in the right context to the right people, they rarely lead to change. And that’s the primary purpose of a KPI report: getting the right strategic information to the right audiences in a format and context that’s clear and understandable.

Specific KPIs that might be included in various types of KPI reports are:

  • Customer lifetime value (CLV)

  • Customer retention rate

  • Sales revenue

  • Total website traffic

  • Conversion rate

  • Number of new customers 

  • Net profit margin

  • Churn rate

  • Burn rate

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Advantages of a KPI report

Collecting good business metrics is an important business strategy, but that data won’t accomplish anything on its own. Your business must drill down into that data before it becomes valuable. 

Turning that research into a KPI report is a good idea. These are a few of the reasons a professional services firm might want to go a step beyond collecting KPI data and actually turn that data into a formal report.

Goal tracking

First, KPI reports assist businesses in tracking their progress toward specific goals. Setting the right goals is key, and so is making sure those goals are measurable. If your agency is setting SMART goals, then a KPI report can show the metrics that measure those goals.

And as a bonus, agencies also using the OKR model (objectives and key results) will get clearer data both to support the creation of OKRs and to measure progress toward those objectives.

Improved decision-making

KPI reports also empower better decision-making by arming those making the decisions with clear data presented in an easily digestible form. Seeing the right set of KPIs in context can help leaders and stakeholders see patterns and trends that weren’t visible before, gaining greater insight into past and current performance. 

Identifying trends

KPI reports can also help firms identify business trends and patterns by bringing to the surface data over time that would’ve otherwise gone unnoticed. When agencies see and then act on these previously hidden trends, they gain the ability to develop strategy proactively, not just react after a problem or crisis develops.

Increased accountability 

Last, KPI reports enhance accountability within professional services agencies by clearly outlining performance expectations and achievements. With clear, measurable goals established, KPIs reveal whether teams, individuals, or the entire agency meet those goals, exceed expectations, or fall behind.

While KPI reports can’t always describe why individuals or groups aren’t meeting expectations, these reports do describe that expectations aren’t being met and point to who’s most likely accountable for that reality.

Essential components of a KPI report

To create a KPI report that delivers on its potential, make sure to include each of these essential components.  

1. Clear and relevant KPIs

First, ensure that the KPIs you include are both clear and relevant.

  • Relevant: All KPIs must align with business objectives. If a professional service firm’s greatest need is increased revenue, then KPIs having to do with number of clients or average contract value are relevant. KPIs about Net Promoter Score (NPS)? Maybe, if contextualized with other revenue-related metrics. But there are plenty of other potential KPIs that don’t contribute to your firm’s understanding of revenue growth.

  • Clear: Think along the same lines as the SMART criteria (specific, measurable, accountable, realistic, and time-bound) here. Is the KPI you’re considering something your typical generalist or stakeholder would understand? If not, can it be recast in plainer language? If so, do it! Remember, the goal here isn’t to look or sound impressive. It’s to get results.

2. Data sources

For a KPI report to be accurate and effective, the data that feeds into those KPIs must be accurate and up to date. It needs to be data you can trust as a benchmark so you can be sure of whether your current business performance is meeting business goals.

Dick Pouw, Associate Partner at Passionned Group, explains why and lays out 6 characteristics that can measure data quality:

“Data quality can be measured. It is complex, but certainly not impossible. The following aspects are used as criteria: accuracy, completeness, format, consistency, duplication, integrity.”

Explain the significance of reliable and accurate data sources for the integrity of KPI reporting and how they impact the report's overall quality.

3. Visual elements

KPI reports are data-heavy, which, for some of us, means they can be hard to process. Data visualizations help turn data into something more interactive, something more like stories, which is why an effective KPI report will sprinkle charts and graphs liberally throughout.

Of course, all the other advice here applies to this point: be strategic about which KPIs you visualize, because these are the ones that will draw the most attention. Make the most important, most relevant, and most explanatory KPIs the most visual, and they can help to fill in the details for the rest. 

4. Current vs. target performance

KPI reports should be descriptive, telling what is. But they should also be directional, showing what should be. That’s what including target performance data accomplishes.

Seeing that your firm grew conversion rate or cash flow or retention by 10% last quarter is probably a good thing. But it’s an absolute cause for celebration if target performance was 2% growth, and it’s a real cause for concern if target performance was 25% growth.

One caveat: those predefined targets need to be realistic to be useful. Our 25% growth example isn’t going to be realistic in every situation, and it makes for a bad target if there’s no reasonable hope of meeting it.

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5. Historical data

If current vs. target performance is one side of the storytelling coin, then historical data is the other.

If you want to use KPIs for trend analysis, then readers need to be able to see more than a single point in time (or even a single year’s worth of activity). For example:

  • Are sales generally trending upward or downward? 

  • How does that affect the change for this year? 

  • Does the change this year track with other operational or industry changes?

Informed decision-making means considering factors like these before making a drastic change based on a single data point.

6. Analysis and interpretation

Providing insightful analysis and interpretation of the data in your KPI reports is an absolute necessity. Raw numbers don’t convey concrete meaning to every reader, and even charts and graphs can leave some readers wondering, “So what?” 

By providing analysis and interpretation alongside the KPI data, you’ll give readers a nudge about how to think about this data, helping them turn raw numbers into meaningful information.

7. Actionable insights

Last, and most importantly: A strong KPI report doesn’t just share data, visuals, and analysis. It leads to action.

Depending on who’s creating the KPI report, this might play out a few different ways. If you’re an executive leader or the accountable person for a specific business area, you may be the one with the insights, which you’re recommending to peers and pushing downward through your team.

In other scenarios (where you’re preparing a report that goes up the chain of command), these insights might need to be phrased as recommendations or suggestions.

Either way, don’t simply unleash the data on the audience, wish them luck, and walk away. Tell them what you believe the data is saying, what actionable steps your firm or department should take as a result.

Best practices for creating effective KPI reports

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Not sure the right way to go about creating KPI reports that actually move the needle? Use these best practices to transform your KPI reports from bland and ineffective into something that makes a lasting impact.

Align KPIs with business objectives

First, make sure your KPIs are the right ones to measure. Does every KPI you’re tracking support one or more specific business objectives? Or is your collection of KPIs cluttered with irrelevant data, vanity metrics, or data that obscures rather than explains performance?

When you’re tracking the right set of KPIs, your reports are instantly more effective, even if you don’t change anything else.

Tailor to audience

If you’re sharing KPI reports with multiple audiences, consider that you might need more than one KPI report.

That’s because different audiences want to get different things out of these reports. The one you create for the executives at your firm is going to use different KPIs than the one measuring the effectiveness of your project management or digital marketing efforts

And none of the three should look the same as the ones you might create for your clients. 

Keep it simple and focused

If the point of a KPI report is to inform decision-making and provide clear insights, then it’s definitely possible to have too much of a good thing.

Resist the temptation to load up the report with every last possible piece of data. Doing so can quickly lead to information overload, making it harder for decision-makers to reach a consensus.

Instead, work toward simplicity and focus by evaluating every single KPI that’s put forward for inclusion. If a KPI isn’t providing clear, direct value, ditch it.

Review and update regularly

Business changes over time, and so do a business’s goals. This is why successful businesses set goals that are time-limited and reassess those goals regularly.

You need to do the same thing with KPIs (and the reports they populate). The data points that mattered 10 years ago might matter less now, and others that seemed relatively low-level back then might be core metrics today.

So make sure to set a cadence where your firm regularly reviews and updates its KPIs to keep them relevant and reflective of changing business dynamics and goals.

Use high-quality visuals

Your reports need to provide the right data, but they should also illustrate that data through the use of high-quality visuals (such as charts and graphs). Visuals can help to enhance readability and facilitate easier data interpretation.

Streamline your KPI reporting process with

The KPI report itself is an extremely valuable tool — but only if it’s well put together using accurate, timely data.

Putting in place the processes and systems to collect that data is a whole separate discussion – one where can lend a hand. is project management software that thousands of professional services firms rely on to plan projects, track tasks, and bill clients accurately. It’s a great solution that acts as a central hub for all your project information, including all the reporting you need to make better business decisions. 

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