Indicator management is the constant monitoring and evaluation of certain processes or routine activities in a business. The basic concept is simple: to evaluate, you have to measure first. Therefore, the objective of performance indicators is to be able to measure the efficiency and quality of processes so that it is easier to identify the points that should be improved. In practice, the business uses an analytical dashboard solution that applies key performance indicators (KPIs).

Where to start?

The first step is to establish the basic indicators that are important for your business and create reasonable goals that point to the success or failure of a given process. It is essential that these goals are calculated through an average between the results obtained by the company in recent months and a projection on the objective to be achieved. Hence the importance of all performance indicators being properly aligned in a central strategic plan. This means that there is no point in advancing one leg too much and the other not keeping pace.

What are the advantages of managing indicators?

The main advantage of managing indicators is precisely the possibility of scientifically evaluating the performance of your company's sectors. It is an opportunity to specify the quality of services without shooting in the dark or relying merely on guesswork. Obviously, the indicator alone will not give you all the answers to the problem. But it will quickly tell you whether it's working or not — which is a big help.

How many indicators do you need?

Many entrepreneurs are usually excited about the effectiveness of the indicators and want to implement them everywhere and in all ways possible. Here caution should be observed. You can create indicators for anything, but too many indicators are counterproductive. You only need the indicators that provide the most relevant answers in regard to your business goals.

What to consider to define the most relevant indicators?

Knowing how to establish performance indicators is crucial to ensuring that they provide useful data to the business and support decision making. Make a careful study about the needs, objectives and strategies of your business. This can be done by answering the following questions:

• What are the desired results?
• What is the relevance of these results to the objectives?
• what are the processes that influence these results?
• How are these results measured?
• Who are the employees responsible for these procedures?
• How often should the action plan be reviewed?

To learn more, get in touch with InetSoft.