Performance reporting: How to ensure you keep delivering relevant information with an overload of data
Posted by Alar Lange
Performance reporting is often ineffective. Many organizations fail to capture the right kind of data to accurately and efficiently evaluate company performance. Other businesses drown in too much of the wrong kind of data in an attempt to quickly assess performance.
Knowing exactly where your company stands, both financially and in terms of production, is critical to increasing profitability and business stability. For example, if production slips a bit one day, you can ask the relevant questions required to find the cause. However, if you wait two months to ask the production floor about the dip, so much time has passed that the employees most likely will not have an appropriate answer.
You need to identify better ways to gather and analyze data to get the up-to-date information that your business needs to remain competitive in the marketplace. Here are some best practices to consider on your quest to becoming a more aware business owner, capable of catching all issues in order to prevent them from impacting your business. Use this guide to develop your own strategies and systems to monitor your business's performance.
Find automated solutions
When culling figures for performance reporting, a lot of the data is gathered and consolidated manually. By the time you assemble all the data and analyze it, the data is outdated and even more data has been generated in the meantime. Therefore, this is not a great solution to uncover real-time information that can help empower your business, even though monthly and quarterly reports are still important for long-term business evaluations. These reports, however, lack the ability to create timely steps to turn small potential problems around.
You can keep better informed about the changes in production that may impact your business by using an automated solution, such as Unit4's Consolidation software. An automated solution generate instant financial reports and provide an accurate glimpse into how your business is doing, without all of the work that manually generated reports require.
Automated systems often provide business owners access to reports and other information that they did not know that they needed or could benefit from, such as whether the daily cost of labor impacts the profitability of a finished product. This is why it is important to investigate the potential for any automated solution to see what else it could do for your business.
Keep managers informed
If you discover a sudden increase in returned product, it is imperative that you collaborate with department managers quickly to determine the cause. Maybe it is a quality assurance issue or a problem with raw materials. If managers are unable to address these concerns with their teams, they will not be able to remedy the situation quickly enough. By the time that managers are finally able to do something, the problem may have already solved itself. If this happens, managers won't know what exactly fixed the problem and how to prevent it from happening again.
Many automated solutions have built-in systems that send out updates and reports to the people that you specify. Managers should be on the receiving end of these updates on a regular basis so that they are not surprised when an issue does arise, and can solve it quickly. Even if someone has to manually devise these reports, it is important to disseminate this information regularly to managers so they can see how their teams perform.
Implement version control strategies
With many people involved in the generation and use of performance reports across an organization, there are often multiple versions of these reports floating around at any given time. To avoid outdated, redundant or wrong information from finding its way into these reports, you need to implement some kind of version control strategy.
Is one copy of the performance report shared somewhere on the cloud so everyone can access it at the same time? This way, whenever a person makes changes, everyone else gets the opportunity to see them before making their own changes. You could also add a version number at the end of the document's file name, with a date on the title page. This way, all people contributing to the report can know the exact version they are using.
Select the best measures of performance
Despite the overload of data potentially available at your disposal, you need to be able to identify the most relevant information for your business. Not all performance measures mean much to all types of businesses, since they may operate differently. For this reason, it is important that you research different types of performance measures and identify the ones most appropriate for your particular business needs.
However, most companies could benefit from maintaining access to daily profit and loss statements, their balance sheets, and daily operational costs relative to labor. These are just the beginning of the types of performance indicators that can be quantified. There are performance measures specific to employee performance, financial performance and more. By researching what types of key performance indicators are common and relevant for your type of business, you can find different ways to measure your business' success.
Your business performs better when you understand how it is really doing and what you can do to improve. Timely and accurate performance reporting can be the tool you need to increase the profitability of your business. Evaluate your company's performance reporting systems and identify whether there is room for improvement.