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[K33]Key Performance Indicators And

by Denise Bendele Cpa, Cva, Den

In order to do so, KPIs must be quantifiable, long-term measurements. In the construction industry, the need to identify a common set of indicators to measure construction performance at the project level is great. Monitoring these Key Performance Indicators in construction to address potential problems and opportunities as they arise allows management to make solid, profitable decisions. Below are nine KPIs construction firms should monitor.

Labor productivity

Problems with labor productivity can erode profit margins and break labor budgets, so it is a particularly important KPI to monitor. By closely watching labor productivity, managers and supervisors can forecast cost-to-complete, identify daily performance goals, improve bidding accuracy, and address current problems.

Cash flow

Knowing whether projects are either generating or consuming cash allows management to identify problems on projects and also helps to ensure timely and accurate billing and collections.

Working Capital

Monitoring liquidity allows your company to determine how much income the work in progress is earning or consuming as you study balance sheet accounts showing current assets and liabilities.

Margin variance

By comparing gross margins to the company's objectives and looking at the gross margins on a particular project in relation to the project estimate, you can determine if the project is reaching its expected profitability. By monitoring the margin variance, supervisors can make any necessary changes to keep project margin variances as low as possible while keeping the overall gross margin stable.

Schedule variance

Communication about project progress and completion are crucial to project owners. To deliver projects on a timeline that meets owners' demands, you must identify and monitor schedule variance. Understanding how variables such as weather or change orders affects the project schedule allows the project manager to plan and coordinate resources to deliver high quality output, better resource utilization, and improved safety. Monitoring schedule variance also helps your company maintain a competitive edge against those firms that all too often fall behind schedule.

Unapproved change orders

There is an increasing economic threat from risk transfer provisions in standard construction contracts. Reduce that threat and increase profit by identifying these unapproved change orders.

Committed cost

When suppliers and subcontractors are not yet committed contractually, especially on long term projects, it is vital to track uncommitted costs to address factors such as labor shortages, rising material costs, and price escalation.

Backlog

Avoid problems with insufficient work and profit fade by properly tracking backlog and the expected gross margins. By doing this, your company can better decide which projects to pursue.

Customer satisfaction

Monitor your company's ability to meet client expectations by analyzing this qualitative feedback. This examination of customer satisfaction in past projects enables you to address deficiencies in both current and future projects and better meet your clients‘ needs.

KPIs help identify those strengths that allow companies to capitalize on opportunities as well as identify potential problems. Because the process can be complex, it may be wise to consult a professional to assist your company in determining and monitoring these KPIs as well as to provide strategic support.

Do you know what's happening in your own site search? Understanding site search is one of the most important KPI (Key Performance Indicator) you should measure. According to a Forrester study, over 50 percent of major web sites fail in search usability. When your search fails to deliver, your conversion suffers. A low converting site will result is less sales and decreased revenue. Search is not just another nice feature to have. You have to think of search as a revenue generating part of your business.

Your company works hard to drive traffic to your site. Many visitors will use your on site search instead of browsing through your site. Online shoppers want to use site search to expedite the shopping experience. The faster and easier they can locate the product they are looking for the more likely they'll buy on your site. The more roadblock you set in place to inconvenience the shopper, the more likely they'll buy from someone else.

Do you know what they are searching for? Are you in any way measuring what search phrases are queried on your site? It is not enough to have site search as a feature. You must analyze it. You have to understand it. Then, you have to make adjustments based on your findings.

The best place to start learning about your site search is through the search log files. If you don't monitor your log files, you will fail to gain an insight into what your customers are looking for on your site. Understanding site search is a KPI that should be part of your tactical operations. Learning about site search will tell you what your customers are looking for.

In addition to understanding what site visitors are searching for, you have to test what results yield from searches. For example, if your customers are searching for ?return policy? what results are they shown? Are the search results relevant to the search queries? If the result you get is not the best possible result, you have to tweak you search engine. The top few results must be relevant, because searchers are not interested in reading deep down your search results. Result number 10 is infinitely more irrelevant than result number 1.

Every reasonable search phrase should result in relevant search results. For example, if the site searcher types ?return policy? in the search field, the search should result in some result. Every e-commerce site should have a return policy; therefore, the site search should yield the relevant result. One of the worst possible outcomes for a search query would be no result. If a user types any relevant key phrase, it should result in relevant results. If they don't, your search is failing your customers.

Site search is a tool to enhance customer satisfaction. If it works as it is supposed to, it has done its job. If site search fails it becomes a frustrating experience instead of a positive experience resulting in lower conversion rates, lost sales opportunities, loss of revenue and unhappy site visitors.

Article Source : Advantage And Disadvantage Of Computers

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Both Denise Bendele Cpa, Cva & George Meszaros are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Denise Bendele Cpa, Cva has sinced written about articles on various topics from Computers and The Internet. Denise has more than 20 years' experience in public accounting and leads the Construction Industry practice for Padgett Stratemann & Co. LLP. She also works with organizations that specialize in wholesale, retail, and manufacturing.. Denise Bendele Cpa, Cva's top article generates over 5400 views. to your Favourites.

George Meszaros has sinced written about articles on various topics from Computers and The Internet, Affiliate Programs and Massage. . George Meszaros's top article generates over 368000 views. to your Favourites.