Analysis of measures will help in finding the right KPIs

There has always been competition in business. Now, after the most severe financial crisis since the Great Depression, this competition is even tougher. Companies have to take urgent measures to save business while competitors have just one goal – wipe all companies out. In order to save business, it needs to be always monitored and measured. This is like looking after a sick person – you never know when the illness can cause death.

Business evaluation is very important in all spheres and industries. It does not matter what your company does (sells slippers or develops software), but you need to be constantly keeping your nose to the wind. Moreover, strategic planning is a must for big companies. How can you run business if you do not know where to go? Being aware of business goals is imperative!

Analysis of measures is helpful in business evaluation

Analysis of measures is helpful in business evaluation

Business evaluation is performed using different methods and tools. But Balanced Scorecard system is perhaps the most popular and accurate measurement program. BSC system evaluates different indicators that altogether represent business performance of a company. Sometimes, managers make a very serious mistake of paying attention only to financial indicators like total revenue. Well, of course, making money is an ultimate goal of every business, but there are so many factors to be considered in the process of performance measurement.

Analysis of measures in business is a part of performance evaluation process

Analysis of measures in business is a part of performance evaluation process

Since we have started talking about indicators, it needs saying that not all of them need to be measured. There is such a term as KPI which stands for Key Performance Indicators. These are figures that show how well your business is doing. KPI are not the same for different businesses. A sales company makes money by selling, while a logistics center makes money by delivering products and cargos. Of course, these companies will have different KPI that contribute to business success.

Balanced Scorecard system makes it possible to locate problems before they have serious consequences for a business. Finding the root of the problem is extremely important both for employees and business owners.

By the way, use of Balanced Scorecard system positively affects employees who will be aware of own mistakes. If an employee knows what he is doing wrong he will have enough motivation to correct mistakes. Besides, if you introduce special bonus system your personnel will have even additional motivation to perform better.

Use of Balanced Scorecard system is recommended before strategic planning. Results of evaluation must be carefully reviewed and analyzed.