Maestro Technologies - Intelligent management software for the construction industry.

What do your indicators tell you?

An increasing number of our customers ask us how they can monitor their key performance indicators in maestro*. The answer is that they require the maestro* control panel and our various data extraction tools to provide the desired information to their managers in real time.

Construction companies are continuing to adopt the best management techniques. The regular monitoring of indicators, defined in accordance with the company’s strategic objectives, is a very effective approach to managing performance. When competition is strong and margins are low, it is even more important for managers to keep an eye on key elements that affect the profitability and success of the organization. In contexts of change and continuous improvement, monitoring indicators also lets you observe the progress and effectiveness of implemented measures, and make the necessary adjustments based on concrete results. When correctly identified and based on reliable data, indicators provide essential information for making informed decisions that are based on facts, not only on intuition.

We often classify indicators based on key elements of the organization:

• Financial aspects
• Customers
• Process
• Human resources and innovation

By definition, indicators are measurable data. As the adage says, "that which cannot be measured cannot be managed". These indicators must relate to well-defined business processes and adjusted based on the results obtained. They must be clearly defined over time. Finally, they must be achievable to motivate everybody in the organization.

We also distinguish between leading indicators and result-based indicators. The first allow us to monitor the actions the organization has identified as future generators of results. For example, in a sales process, recruiting potential customers (leading) is an indicator of future sales (result).

Using indicators, the performance of the company can also be compared to data available from the industry (benchmarking or standardization), making it possible to isolate processes that require improvement.

For effective and proactive management, regular monitoring is necessary. Indicators may require daily, weekly or monthly monitoring. It is also important to establish targets. The information must be reliable. An indicator that is questioned loses its relevance. To give management a full picture, it is essential to have a solid, integrated information system that can provide the data in real time.

There are many examples of performance indicators. Some of them may be corporate and affect the entire organization. Departments can determine which indicators are specific to it, while still directly related to corporate indicators.

Often the operating report identifies indicators that deviate from the established target by a certain percentage, making it possible to quickly focus the analysis on potential problem situations. Displaying some of the data in graph form is an excellent method for viewing trends.

Below are some simple examples of indicators monitored by construction companies:

• Profitability of projects, change orders (monitoring of deviations)
• Treasury (graph, trends)
• Collection of accounts receivable, holdbacks (target)
• Usage, profitability of equipment (monitoring of deviations)
• Savings generated by the procurement department (target)
• Inventory turnover (target)
• Response time - service (target)

The issue for construction companies is therefore not whether the monitoring of indicators is relevant, but to determine which ones should be implemented and how the information can be obtained. Fortunately, maestro* users have an excellent integrated management software program to make this an easy task.