Selecting the best Key Performance Indicators (KPIs) is essential to building an effective balanced scorecard. With the millions of potential business metrics available, choosing those that are most useful in your industry can be frustrating. Even though you may be a CEO or executive with years of experience, you may have difficulty creating KPIs that will accurately represent your business performance.
BSC Designer has used its experiences with many different industries to identify the KPIs that are commonly used for specific industries or business aspects. Experts believe that effective management of these KPIs can define whether a particular business will succeed in its industry.
To further simplify the KPI selection process, BSC Designer has developed dozens of business metric packs which include useful KPIs to track your business performance. These collections combine coordinated indicators, along with recommended weights and structures, to ensure effective implementation. You can select the collections that best fit your business strategy and build your balanced scorecard with proven indicators for success.
Key performance indicators are the yardsticks against which an organization can easily measure its current performance and at the same time, devise methods to control future activities.
Financial indicators reflect the performance of the company in financial terms. Revenues generated, profits earned, fee charged etc., can be used as parameters here.The Customer perspective refers to the image of the company among its customers on the basis of its various accomplishments. This can be known by the number of clients, cases resolved, awards and credibility ratings.
The internal processes perspective focuses on the efficiency of the company and could depend on the time it takes to resolve issues, number of experienced employees and different services provided across various fields. The Education and Growth perspective focuses on ensuring that a company’s employees possess the right kind of skills and training to tackle any kind of situation. Therefore, the number of technical and psychological training sessions held, counseling provided and compensation play a significant role.
The key performance indicators are normally the most difficult part in finalizing a Balanced Scorecard and the value of this set of products is that it will guide professionals in choosing the best key performance indicators for their organization.
Business Metric collections are grouped according to their function. Human resources, marketing and sales, finance, project management and development categories includes collections that are applicable to most businesses. Vertical business collections are industry-specific, providing those essential KPIs that predict growth and success in selected industries.
Most businesses can use one or more of the Employee Management Scorecard collections. For example, the HR Metrics pack includes hiring, training, outsourcing motivation and retirement calculations. The Personal Metrics package provides KPIs for individual productivity and time management. Communication metrics help identify performance issues related to internet, cellular, and telephone services.
Marketing and PR Scorecard business metric collections contain many KPI packs that track sales, customer profiles, marketing and advertising efforts. Business Intelligence metrics help your stay on top of market trends, including competitor analysis, benchmarking and market research. Dedicated Marketing packs assist you in reviewing your marketing strategy to determine what aspects are working, including a return on investment calculation for your overall marketing program. Advertising KPI packs compare response rates and subsequent sales with costs of advertising.
Marketing and PR Scorecard collections also include KPI packs for evaluating sales and customer relations. Sales metrics include sales capacity, sales volume and sales income source analysis. Online Business metrics are useful for both web-based businesses and brick-and-mortar business that want to maintain a strong web presence.
CRM metrics packs deal with your customer base, allowing you to analyze your relationship with your customers and identify areas of improvement. Customer Service metrics assist in evaluating performance of call center services.
Finance and Accounting Scorecard business metrics deal with dollars and cents. Banking KPIs provide tools for analyzing costs or risks associated with credit card processing, retail and investment banking. You can also monitor your credit activity and track mortgage or loan factors. Accounting KPIs evaluate the effectiveness of your accounting practices and related costs. Financial service metrics track the performance of your relationships with professionals who manage your finances or investments.
Finance metrics also include a wide variety of important KPIs to help monitor your current financial situation. Financial Statement analysis, budgeting and forecasting KPIs help keep up with day-to-day concerns, while investment portfolio analysis and insurance indicators help you see the long-term view. Metrics for both Activity-Based and Value-Based financial management strategies are available as well. Benchmarking indicators are also included.
Project Management Scorecard metrics include those KPIs that relate to management of your business operations. Packs include risk management, crisis management, and general business management KPIs.
The Project Management metric pack assists through the product development and launch process, helping ensure that you gain the most benefit from the introduction of new products. Knowledge Management metrics provide feedback on the effectiveness of your data collection and intellectual capital.
Business Management metrics allow you to evaluate your strategy and determine whether it is in line with your company mission and vision. KPIs also include indicators for public and private sector industries and non-profit organizations, such as fund-raising effectiveness and fund management.
Operations metric packs are also available. These collections help alert you to issues in your operational strategy so you can address them before they cause performance problems. Operations packs also include indicators related to resource and cost management.
Risk and Crisis Management metrics help you protect your progress from setbacks due to market instability, technology failure or natural disaster. These KPIs help you analyze potential risks and evaluate your level of preparedness.
Development Scorecard metric collections help with product development strategies. Quality packs quantify the quality control process and help you determine whether your product continues to improve to meet changing market needs. Six Sigma metrics and TQM KPIs are also included in the Quality metrics collection. Outsourcing packs help you evaluate your outsourcing contracts. Manufacturing KPIs have indicators for production levels and costs. These can be coordinated with human resource and marketing metrics in your balanced scorecard to better evaluate and predict your profit margin.
Vertical Business packs include those KPIs that characterize high-performing businesses in their selected market. These are designed for combining with the previous packages to add industry-specific KPIs to your balanced scorecard. While all business can benefit from analysis of indicators for human resource or marketing KPIs, only select industries find information such as fuel consumption or software design costs helpful when analyzing performance.
In addition to businesses dedicated to the industries targeted by each Vertical Business pack, organizations that include these functions as a dedicated business unit can also benefit from the use of the performance indicators. For example, if your business has a large IT network requiring significant resources, you can benefit from the Computer Networks KPI package to improve your IT business unit performance scorecard.
Following are a few of the industries which have dedicated Vertical Business packages currently offered by BSC Designer.
- Government and Infrastructure: Social Services, Emergency Services, Energy Production, Environmental Protection, Security
- Leisure and Personal Care Industries: Golf and Tennis Clubs, Athletic Clubs, Museums, Theatres, Resorts, Personal Health
- Manufacturing: Automotive, steel, aluminum, general manufacturing
- Media: Television, Radio, Web, Print, Publishing
- Professional Services: Medical and Dental Practices, Hospitals, Legal Firms, Real Estate Sales, Property Management and Development, Hotel Management, Insurance
- Retail: Food Services, Auto Sales
- Technology: Computer Networking, Software Development, IT Security
- Transportation: Logistics, Transport, Airlines, Travel Agencies
The Business Metric Collections simplify the KPI definition process and help ensure that you’ve selected the best indicators for your company. By combining the KPI packs that best fit your business model, you can ensure that your balanced scorecard is accurate and complete.