Indicator Ideas- Measure your business performance
This article discusses major indicators ideas which form the basis for measuring the performance of any business. Check additional information about indicator ideas.
Each and every business needs to evaluate the overall performance level year after year so as to know about the health of the business. Since there is tough competition in the market and it is better to regularly review the performance scenario so as to get the first hand information in time and take the necessary actions before it is too late. Now question arises how to measure the performance of a business and what should be the indicator ideas that can form basis for such a performance testing.
Indicator ideas are set of key performance indicators (KPIs) which are used by most of the business houses to get an insight view of the state of their business health and to predict the performance of their business in the future. Different types of business have different set of key performance indicators. Key performance indicators can be grouped into number of categories. Some of the common categories of indicators are as:
Quantitative indicators: These are the indicators which can be presented as a number. Such indicators are used by financial sector like Banks, Financial corporations. This type of indicator directly states the financial health of a business.
Practical indicators: These are class of indicator which measure the performance of the various processes used by the organisation. Since quality of processes directly impacts the growth of the business such indicator show what are current situation of process and what can be done to improve them. These type of indicators are used where business house want to measure performance of their inherent process.
Directional indicators: Theses are set of indicators which depict the direction in which the business is moving on ie whether it is moving upward or downward. It gives an idea of the improvement or that business has made from the previous quarter specifying whether an organization is getting better or not.
Actionable indicators: As the name suggests these indicators are used to indicate what are the required actions that need to be taken to improve the performance of the business?
Since Key indicators differ from one business to other. For instance for a school key indicator for measuring performance can be failure rate of students whereas for a Bank it can be net income it earned in a year. So it is very important for an organisation to identify the relevant performance indicators which can correctly measure the performance and provide the other information. In order to identify key indicators one needs to look at some factors like:
Business process (BP): Business process can include the manufacturing processes for a manufacturing firm or Software engineering process for a Software company. So, one need to take into consideration the process while selecting the indicators.
Requirements and goal of the Businesses: One needs to take care of business requirements and its goals while selecting set of indicator so that main focus of the performance variable should be in line with the long term goal of the business. This ensures that result of such a performance analysis will focus on only relevant areas which are in cohesion with the goals of the organisation.