Middlesex Consulting Group

› Performance Indicators and Operational Measurements

Public companies are required to measure and report financial activities by conforming to GAAP and being reviewed by auditors. Sole Proprietors annually measure progress by tracking their 1040's. Many companies are implementing dashboards based on "The Balanced Scoreboard" by Robert Kaplan and David Norton. Unfortunately, unless you know what to measure and their significance, these metrics are meaningless to generate Action Plans to improve and grow your business.

Indicators commonly measured by company departments include:

• Sales - cost per lead, lost orders, orders by territory, long term customer value, percent of orders with service contracts
• Development - number of initial bugs per application, ECO's in first months after release
• Manufacturing - warranty costs, inventory turns, defects per units shipped

Some of the operational measurements a customer support organization needs to measure include:

• Percent of calls closed over the telephone
• Percent of repeat visits
• Number of warranty vs. contract vs. non-contract calls
• Percent of contract renewals
• Reasons for call - malfunction, user error, software or hardware issue
• Response time from call to resolution

In addition to providing valuable insight into the profitability of customer support, these issues can greatly impact your sales, manufacturing and distribution operations.

A smaller sized support organization can have more than 10,000 unique telephone incidents, more than 2000 field visits, hundreds of depot repairs and many other customer interactions each year. Larger sized organizations will have many more. Each interaction should generate a unique data point to be consolidated to identify priorities and actions required to improve customer loyalty, product reliability, financial performance, and create new Services products. Knowing what to measure, how often, and how to interrupt the information takes experience, understanding and vision. We provide the knowledge you need.

A typical Performance Indicator and Measurements development project includes:

1. A detailed review of currents metrics and reports
2. An understanding of key processes and information collected from each
3. A review of business and department objectives
4. An independent analysis of what can be measured, degree of difficulty to collect the data, importance to the business, and availability and usefulness of historical data
5. Preparation of report formats for your team to use including Importing relevant historical data
6. Discussion of the metrics including why chosen, how to use to draw conclusions and how to present the results