In the first and second section of this four-part article, we explained some basic reasons why key performance indicators (KPI) are important to implement into your construction business. However, analyzing the data and determining how to improve your company’s results is an entirely different task. In this section and the final section, we will discuss ways KPIs can be put into practice in the construction industry.
As Ft. Myers construction lawyers, we know that if properly managed these strategies can create an effective and efficient workplace, improve a company’s profit margin, and can even lead to more winning bids. If you are in need of legal advice, please speak with a Ft. Myers construction attorney today.
Types of KPIs
Generally, there are two types of KPIs companies use to analyze their business practices: lagging and leading KPIs. These indicators can be a great tool to use to evaluate your business to review past results or predict future production. It’s critical that businesses incorporate both leading and lagging KPIs into their operation as these evaluation tools merge to create an effective strategy by looking back and looking forward for solutions.
Lagging KPIs are considered the conventional type of evaluation process. Businesses utilize these KPIs for tasks like analyzing their cash flow. Whether it’s determining the operating income of a business or analyzing a problem after it transpired, lagging KPIs are utilized to review events that have already transpired. The information from this research can educate companies on ways to improve their process for future implementation.
Adversely, leading KPIs focus more on in-process analytics and forward-thinking solutions. Whether it’s predicting the future needs of a project or evaluating projects midway through to discover a solution for an emerging issue, leading KPIs recognize changes in real time and have the ability to shift course to a beneficial solution.
Collecting the Right Data
If you are looking back at a problem or thinking ahead, it all begins with gathering data and analyzing that information. Many construction companies fail because they are not utilizing their resources. Companies that access their performance metrics and closely review the information will prosper. Whether it’s recognizing patterns or discovering the root cause of a problem, businesses that are utilizing the right resources to review the right information are creating ways to improve their process and their performance. In other words, their success is not accidental.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.