Localization Academy

Key Performance Indicator (KPI)

With all of the responsibilities that project managers have, how do they measure their performance? Find out how KPIs keep track of performance and ensure alignment to the company’s strategic goals.

What does KPI mean? And how is it used in localization?

KPI stands for key performance indicator. So, it has something to do with performance, it has to be key. And, it is indicating something which is basically our performance. Maybe I’ll best illustrate this on a project manager. What a project manager does on a daily basis is you read, you write a lot of emails, you have chats, you have meetings, you have zoom meetings, you do finances, prepare files, you analyze files, you create quotes, budgets, and so on. And, you deliver the files and you troubleshoot and so on. You do all these different things. And technically, you could have performance indicator or a certain metric for every of this task, right? But if we did this, we would have so many different metrics, or performance indicators for these little things.

Okay, one thing that you could maybe be tracking is, are you replying to your clients emails within 24 hours? So, the thing that we would be tracking is maybe the ratio of how many times you reply within 24 hours to client’s email versus how many times didn’t. So maybe you would score, let’s say, 95%. Okay, but we will have all these different metrics here, which some of them could have more value, some of them not. But the question is, can we maybe come up with one or two, three, really the key, key performance indicators, which would encapsulate, encompass all these things and say, “Are you a good project manager or not?”

So maybe we can, maybe we can. What the clients actually care about is not what how well you do analysis, how well you do it, how will you prepare the files, but they care if you deliver the projects on time. So, delivering the projects on time, especially if you are constrained by SLA. You have a SLA in place with your client, maybe that could be a KPI, which is to track how many projects you delivered within the SLA and how many times you failed. So, maybe this could be tracked on a monthly or quarterly basis. And your score could be, I don’t know, you delivered 97% projects within the time. So, this may be key thing, a key metric for you. But maybe if we zoom out a little bit more, and we really focus on the key part of the metric of the performance indicator.

So, this is more how your work helps the strategic objectives of the company that you’re working for. Maybe even a better one could be the NPS score. So that can be your KPI, so which basically expresses how the customers are satisfied with your service. Okay, so NPS is net promoter score and I think it asks the people how likely they are to recommend your services or your product to others. So this includes everything, not only just delivering the projects on time, because maybe you deliver the projects on time, which is the KPI that we have here. But, what customers care also is the quality, right? The cost, how well they can communicate with you, and so on. So this could all be encapsulated in the NPS score. And maybe for that one, you’re scoring in percent as a whole organization. And this is important for your organization, this KPI, because a lot of the companies especially LSPs, what they want, or what they’re claiming to want is the best customer experience for the customers. So that customers can rely on them, they can trust them and so on. So this could be one of the key performance indicators that you track as a whole organization, especially if you’re working in the, in the production or project management team. Okay, so KPI is really, really something important, important indicator of our performance. So it’s not like, I wake up one day and I feel like okay, you’ve been doing pretty good job. But, I have exact data that goes into the KPI that gets calculated and it gives us an indication who is doing well who is not doing well. And in case we have indication that somebody is not doing well, we can take an action, that is KPI.

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