In Part 1 in this series, I discussed how the limitations of traditional performance metrics might stop your business from reaching its full potential. In Part 2, I looked at the different types of performance metrics you can use to complement traditional KPIs. In the final part in this series, I look at how you can run a smarter, faster, more connected business.
If, until now, you’ve been using mostly traditional metrics to measure business success and to identify growth opportunities, you might be wondering how you can start doing things differently, and how you can start using analytics to gather and benefit from the insights buried in your data.
Here are a few suggestions:
Choose the right solution
Your business intelligence solution should provide specialised, accurate reporting that will help you to identify trends and opportunities that can boost your competitiveness.
With a holistic view of your business, you’ll be able to track, analyse and manage customer and supplier interactions, and make faster, more effective decisions.
White paper: You are what you measure
Data will talk if you ask the right questions. But traditional business metrics force you to ask questions based on historical data. By then, it could be too late to act. In this white paper, we discuss how proactive, indicative business metrics can drive your strategy and operations.
Break down silos
Traditional business metrics, like overall profit, usually highlights the negative. When the sales department sees a fall in revenue, they might question their performance. But the real cause of the revenue drop could lie elsewhere. It’s important that you help your people understand cause and effect.
For example, view your traditional metrics – like revenue goals – as the ‘effect’ and help your people understand the ‘cause’ by layering more indicative, proactive performance metrics on top. This will help them to understand how their efforts contribute to the bottom line.
Here’s another example. The sales team is often measured against traditional metrics like handling a certain number of client queries within a certain time period. But if you share metrics about profitable clients with them, they can focus their attention on better serving these clients, rather than ticking boxes and dealing with queries that don’t necessarily drive business performance.
Similarly, if you share metrics about stock levels with the sales team, they can proactively push these product lines, rather than pushing blindly to meet their own sales KPIs.
It’s up to you to decide how much data you share with your teams, how often, and in what formats. But if your people are all working towards the same goals, they’ll be a lot more effective.
Be responsive and proactive
Traditional metrics measure performance based on old data. By switching to real-time metrics, you’ll be able to see the information as its generated and act on it immediately. You can identify trends before they become problems in your business, or you can leverage positive trends to drive business growth.
Choose a business management solution with sophisticated reporting and dashboard functionality. One that connects your business with smart, cost-effective, scalable and secure functionality. An integrated solution should help you to manage your financials, customers and people while streamlining manufacturing, distribution and key supply chain processes.
When you start using data proactively and pervasively, you can:
- Gain more visibility into financial and client data.
- Reduce complexity when expanding your business.
- Eliminate operational silos that prevent collaboration.
- Reduce uncertainty about things like cash flow shortages and unpaid invoices.
Businesses are operating in a hypercompetitive world. Relying solely on traditional performance metrics will put you in a vulnerable position. You need to embrace and exploit the full range of data available to you, so that you can extract the business insights you need to get ahead.
Be sure to share these insights with the people who could benefit from them, so that all departments are united behind a common goal to increase profitability and drive business growth.