Key Performance Indicators: Increasing Margin and Reducing Risk
A Key Performance Indicator (KPI) is “A quantifiable measure used to evaluate the success of an organization, employee, etc. in meeting objectives for performance.” A KPI considers the business’s context, strategies, and values and is a metric that incorporates performance targets so companies can track their progress toward goals.
There is increased interest in KPIs, with many contractors either currently using them, trying to implement them, or expressing a strong desire to do. Despite growing knowledge of metrics and the benefits of key performance indicators, many contractors have not implemented them because they are unclear how and where to begin.
KPIs are critical both for determining a contractor’s success and making necessary adjustments for optimal success and profitability. The objective of this study was to research and provide a practical guide for contractors to use KPIs in their companies.
KPI Evaluation Tool: Take a deep dive into pertinent key performance indicators (KPIs) and see how your company measures compared to your peers within the electrical construction industry. Functional areas such as business development, estimating, finance, operations, prefabrication, purchasing, field installation and more are built within this benchmarking tool. Properly established KPIs are more critical today and with an understanding of how to use metrics to monitor performance, increase profit margin, and reduce risk will support optimal success and profitability.