Members often ask me what the five most important metrics are to track in our industry. Usually members expect a very clear cut answer like: “unit cost, average handle time, time to first decision, abandon rates and NPS.” Unfortunately the answer is not that straightforward as these five measures are often used to stand for a variety of goals or concepts that every Operations executive should be striving for. This topic will be one of the key topics covered by the Operations Council team at our Financial Services Conference in Boston later this month.

If Operations’ mission is to ensure the firm is delivering the optimal level of service at the lowest cost, then there are really only four things Operations executives should be measuring: cost efficiency, quality, productivity and risk. Additionally, tracking the drivers for these key areas helps executives know how to take action should any of these variables begin to deteriorate. For instance, employee engagement and work volumes affect productivity. Timeliness of delivery and errors rates affect quality… And of course, the way you measure these things in each part of Operations also differs. Average handle time is a call center cost measure. Time to first decision is a quality measure in the credit world… and so on and so forth. To further complicate things, what you measure is probably not as important as what you measure yourself against. Most members have standards for their key performance indicators, whether these are employee-level, process-level or customer-level standards, but many of them confess to being unclear on the source of the standard or to having set the standard based on previous year performance. The problem with this approach is that setting standards that are too low and setting standards that are too high both have a detrimental impact on Operations’ cost efficiency. On the one hand setting standards that are too low for key customer metrics such as speed of delivery puts revenue at risk, affecting efficiency. On the other hand setting standards that are too high increases costs without improving revenue gains – also affecting efficiency. To help our members solve this problem we’ve focused a number of resources toward documenting solutions to common performance measurement challenges Operations executives face. You’ll find a couple below:

1) If you’d like to have the opportunity to network with peers around the topic of standards for our industry, please join us at our live event “Using Standards, Not Processes, To Create Efficiency” to be held in Boston on May 23rd.

2) If you’d rather learn how to create an effective Operations dashboard in an interactive virtual format, join us for our May 31st Interactive Workshop on Best-in-Class Dashboards (June 1st for Asia Pacific members).