Metric Management Consulting: Find the Right Metrics

Metric Management Consulting

A business data analyst presents the quarterly business intelligence report to executive management. The executives look over the report, ask questions, and discuss the data among themselves, yet at the end of the meeting no decisions have been made. Furthermore, management is confused about what all the data means. What's the problem? Too many metrics.

As an expert in metric management consulting, I know first-hand that there are literally hundreds of different business metrics a company could use to measure its performance. In fact, the term 'metrics' is broad enough that it can encompass a limitless number of measurements – both financial and non-financial. The mistake many companies make is one of looking at too many metrics rather than focusing on that small number of key indicators that tell the real story.

All Metrics Are Not Equal

A business data analyst can only work within the confines of what management expects. If management wants data from dozens of metrics, the analyst must provide that data. What must be understood is that not all metrics are equal. Furthermore, including too many metrics creates a chaotic picture that makes connecting the dots more difficult than it needs to be.

It is very tempting to try to measure every aspect of a business – from how much is being spent on capital improvements to the number of pencils the accounting office goes through every month. However, reality dictates that there are a limited number of metrics offering information useful to determining organisational health.

Making the most of metric management consulting is therefore a matter of identifying the most important metrics and focusing on them. They may be financial metrics such as liquidity, asset efficiency and profitability, or they can be non-financial metrics like customer satisfaction and product or service quality.

Better Focused through Fewer Metrics

As a business data analyst, I encourage clients to improve their performance focus by reducing the number of metrics they look at. Fewer metrics makes it easier to focus efforts on those things that really matter to organisational health and future performance. Indeed, the phrase 'less is more' should be the underlying theme of business data analysis.

If your company's use of metrics and data analysis is too convoluted to be of any value, it's time to refocus on that core set of metrics that truly defines how your business is doing and where it is going. You may need help getting it done. I would be happy to help you clear the data fog by identifying the most important metrics to your business and then implementing means by which you can make maximum use of the data they generate.

In the end, it's all about finding the right metrics and concentrating on them. There is such a thing as too much data. It is possible to have too many metrics getting in the way of clear, concise vision. Don't let your company fall into that trap. Find the right core metrics and focus on them.

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Author: Chris Scanlon

Hullo.  I'm a graduate chartered accountant with 25 years experience in blue chip businesses and the last 15 years in owner manged businesses.  My particular skill is turning data into information. Bringing the performance management of the business alive so that ...