Power BI - Explain Key Performance Indicators (KPIs) dashboards

Key Performance Indicators (KPIs) are important metrics that help businesses to evaluate their performance in achieving strategic objectives. In Power BI, KPIs provide a visual representation of progress toward goals by comparing actual performance with target values. They act as essential tools for decision-making and help the organizations to assess whether they are meeting their targets quickly. In this article, we will see how to create KPI visualizations and other core concepts in Power BI.

Creating Key Performance Indicators (KPI) Visualization

To demonstrate how to create a KPI visualization, we will import an Excel sheet into Power BI. The following steps will help us through the process. The dataset used for the visualization is here. Below is the screenshot of the dataset:

Step 1: Under the Home, Tab Click on Get data.

Step 2: Click on Excel Workbook.

Step 3: Import the data from the machine and select the checkboxes for the data fields we want to use in the KPI visualization and then click on Load as shown below:

Step 4: Under the Visualization Tab. Select Build Visuals to start creating the visualization.

Step 5: Now select the KPI icon to begin creating the KPI chart as shown below:

KPIs in Power BI require three main fields:

1. Values: These are the actual performance values compared to the target values.
2. Trend Axis: This represents the time-based axis like month name or number that shows performance over time.
3. Target Goal: This is the target value that the performance is being measured against.

Step 6: Drag and drop the relevant fields from the dataset into the respective rows for Values, Trend Axis and Target Goal. as shown below.

Step 7: Once the steps are completed, the Power BI dashboard will be updated to display the KPI visualization showing actual performance versus targets over time which looks like this:

KPI Advantages

Using KPIs in Power BI offers several advantages for businesses:

1. Monitoring the Target: It allows organizations to visually monitor their performance helps in making it easier to track progress towards goals in real-time.
2. Timely Reports: With KPIs businesses can quickly assess whether their plans are being executed effectively which ensures that timely adjustments can be made when necessary.
3. Simplify Processes: Modern businesses use KPIs to streamline their processes and improve profitability which helps them stay on track with their strategic objectives.

KPI Disadvantages

Despite their many benefits, KPIs have some limitations:

1. Time-Consuming: KPIs provide performance insights but do not offer immediate action items. They track progress but organizations still need to decide what steps to take based on the data.
2. Implementation: It's important not to overload the dashboard with too many KPIs. Start with a few simple KPIs and gradually add more as needed to avoid complexity.

Uses of KPIs

Using KPIs in Power BI provides a clear and effective way to display complex data. There are two main reasons why we use KPIs in Power BI:

1. Measure Progress: KPIs are used to track progress whether positive or negative over time. For example, we can measure whether we are meeting our targets or if we’re lagging behind.
2. Measure Distance to a Target: KPIs also help us measure how far we are from achieving a target. This allows businesses to assess how much work is left to reach their goals and identify areas that need improvement.

With KPIs in Power BI organizations can effectively track performance, visualize progress and make data-driven decisions that align with their strategic objectives.