Understanding Key Business Metrics
Key Business Metrics (KBMs) are business indicators that are used to follow a company's performance.All companies, non-profit organizations, and government entities need to judge their performance on a time-sensitive basis.
These business metrics are the statistics that are deemed important enough to track in order to meet projected business goals.
To see how some common Key Business Metrics can be charted and analyzed in InetSoft's application take a look at the screenshot to the right.
InetSoft's Approach to KBMs
All companies, whether selling products or services, need to track their key business metrics. This screenshot shows an example dashboard created in the InetSoft StyleBI application.
Using the point-and-click interface, this dashboard tracks several very important performance indicators and presents them all in real time to the end-user.
Examples of Key Business Metrics
In the above screen, sales, quantity, and performance vs quota are visible. Other marketing KBMs that can be tracked include: customer acquisition cost (CAC) ratio, sales and marketing cost ratio, average order size, and pipeline dollars per dollar of investment.
Supply chain KBMs contain: number of PO line items with detailed production plan, upside supply chain flexibility, return on assets, and rule management cost.
Common sales KBMs that are tracked include: frequency of business partner sales update, words to sale (phraseology efficiency), order fulfillment costs, number of sales, and sales person productivity.
Popular HR KBMs are: age of HR strategy, percentage of HR budget spent on training, HR department cost per FTE, and HR FTE to total FTE ratio.
Last but certainly not least, seeing as how it has more KBMs than any other sector, examples of finance KBMs include: tax expense, value chain finance costs, return on capital employed (ROCE), economic value added, and internal financing ratio.
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