What is a KPI? A KPI is a relevant measure of performance. KPIs are a measure of how well companies, businesses, business units, products, projects or individuals are performing compared to strategic goals and objectives. KPIs give us an understanding of the current levels of performance. This post discusses KPIs in the context of presenting data, in a data visualization like a chart or dashboard.

Key means important. So how do you know what’s important? Have a look at your organization’s strategic and business plan or some other plan written or unwritten. Have a look at the mission statement. The reason that it’s key is that it must have a primary relevance for your organization. Avoid measuring things that don’t matter just because a textbook tells you to.

Performance is about tracking the actual performance as compared to the goals. The performance could be total profit in dollars last month. It could be total profit last month in a particular product category. It could have something to do with total sales. There are many types of performance measures.

How do you indicate how the performance is doing compared to the objectives of the organization? The indicator will flag any key performance that falls outside the bounds you have set and notify you quickly. The indicator should use pre-attentive attributes so that the user will access their iconic memory space, or more likely their short-term memory space.

All KPIs must be important, measurable and have some calculation. Also, your KPIs should be updated regularly, meaning as often as possible.

In order to create a KPI in Tableau you need a good understanding of calculated fields.

Sales by Category & Region – An Example in Tableau

Using Tableau’s Sample – Superstore dataset, I will provide a KPI example. We will want to know if the Sales volume has or has not reach a certain threshold for each Region and Product category. The Superstore dataset has four Regions (Central, East, South and West) and it has three categories of products that it sells (Furniture, Office Supplies and Technology). To create a KPI in Tableau, you’ll need an understanding of Calculated Fields. You may also want an understanding of Parameters in Tableau.

Types of KPIs

We can look at KPIs from the following perspectives: financial, customer, marketing and sales, operational processes, employee, and social responsibility. For types of business or corporate KPIs, have a look at the article over at Investopedia called KPIs: What Are Key Performance Indicators? Types and Examples. You could check out the book by Bernard Marr called Key Performance Indicators (KPI): The 75 measures every manager needs to know.