Key Performance Indicators
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•Give three examples of key performance measures that are forward looking and more predictive.
•What aspect of the value chain are they measuring?
•How do these measures tie to specific strategies in your business unit?
•Does the business' culture enable or block its business strategy and/or does it have an effect on financial performance in the value chain? Provide a rationale in support of your answer.
•What are cultural norms that govern the organization, and what types of behaviors does the culture promote or punish?
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Solution Summary
This solution studies Key Performance measures and their impact on business strategy and the value chain. Cultural norms and organization behavior are also touched upon in the paper.
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• Give three examples of key performance measures that are forward looking and more predictive.
Key performance measures that are predictive and forward looking can drive behavioral reforms and impact performance. Here are three examples of such predictive Key Performance Measures:
1. Sales Contracts:
This KPI will track the following:
• Contracts being now prepared and are pending
• Sales meetings scheduled and completed.
• Active sales prospects and probability of conversion to a successful sales contract.
• Meetings sales managers have with existing and new clients to acquire new work( contracts).
Weekly, monthly, or other periodical targets can be set of the above measures. This will help to predict the outcomes in advance. It will also help in monitoring whether the indicators are lagging or on the top, when making other functional decisions such as purchase, recruitment and also to re-strategize. For example, if the indicators are strong, the company may decide not to take low margin work and if indicators are weak the company may tighten costs.
2. Inventory
It is often felt that there is little risk of over-purchasing. However, inventory buildups often go unnoticed and are in excess of requirements. When inventory builds up it ties up money which will otherwise be available. This KPI can track the following:
1. Exception report that compares monthly purchases of materials with unchanged primary location inventory of the same items.
By comparing purchases to inventory, cases where ...
Education
- BPharm, Mumbai ,India
- MMS, Mumbai, India
- PhD, Madras, India
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