KPI dictionary: what it is and what good looks like

In many organizations, "Gross Margin" is an opinion, not a fact. Sales calculates it one way, Finance another, and Production a third.

This leads to the most expensive meeting in corporate Switzerland: The Reconciliation Meeting. This is where 10 expensive people spend an hour arguing about whose number is right, rather than discussing what to do about it.

The solution is a KPI Dictionary.

More Than Just Definitions

A PDF on Sharepoint is not a dictionary. That’s a graveyard. A functional KPI dictionary is a living artifact that includes:

• Business Definition: Plain English explanation.
• Technical Calculation: The exact SQL or DAX formula.
• Data Source: Which table? Which system?
• Owner: The specific human being responsible for this number.
• Refresh Frequency: Real-time? Daily? Monthly close?

What Good Looks Like

We recommend keeping it lightweight initially. Don't try to define all 500 metrics. Start with the "Board Pack 20"—the metrics that reach the executive level.

The "Golden Thread"

The gold standard is when your KPI dictionary is integrated into your BI tool. When a user hovers over "EBITDA" in the dashboard, they should see a tooltip with the definition and owner.

Practical Steps to Start

1. Inventory: List the top 20 mismatched metrics.
2. Workshop: Get the heads of Sales, Finance, and Ops in a room. Lock the door until they agree on the definition of "Net Revenue".
3. Publish: Put these definitions in a central, searchable place (even a clean Notion page or Excel is better than nothing).
4. Govern: Appoint a "Data Steward" who must approve any changes to these definitions.

Understanding your numbers is the first step to trusting them.

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