24 May The Best Key Performance Indicators For General Contractors
All businesses and businessmen can benefit from the key performance indicators. This is because they can keep track of their profitability and their efficiency at the same time. If you are working as a general contractor, you also need to make use of these KPIs so that you will be able to determine the best practices and drive success toward your business. If your goal is to become the most profitable company in the industry that you belong in, you should only utilize the best key performance indicators.
It is not a secret that it is difficult to run and manage a company. This is because you will be continuously facing an unprecedented number of pressures that can come from your own business as well as with the external parts. In the latter, this can include the profit margins, the ever changing technology, the expectations and the declining workforce. As a general contractor, you should follow the best practices so that your endeavors will flourish. In doing so, you will be able to achieve higher ROI and even reduce the risks that you might face in the future.
The difficulty of the industry that you belong in is quite evident. According to many reports, over 10,000 construction businesses fail every year and billions of dollars have been lost since 1998 alone. However, there is no need to panic because if you have the best key performance indicators, you can definitely succeed here.
Experts have found out that the contractors that usually do well are those that are able to fine tune their company by means of aligning the processes, the people and the technology so that they can produce results that soar above the average of this industry. The construction industry has already accepted the key performance indicators that are able to indicate the overall health of the company. However, the description and comprehension of each of these KPIs will vary greatly because of the fact that a normal general contracting firm contains a compound grouping of legacy software and different software systems that are utilized to continue the business operations.
Among the best key performance indicators for the general contractors are the liquidity, backlog, scorecard, schedule variance and the work in process reporting indicators. In the WIP, this can include the margin variance, the cash flow of a certain project, the unapproved change order and the committed cost indicators. Although these have been identified as the best ones among the available KPIs today, you are not limited into searching for more indicators for your firm. In addition, you should never forget that the KPIs are only there to help you assess your companyâ€™s performance. There is no way that these indicators can give the whole description entire picture of the business productivity and efficiency. This is why there is a need for indicators on every department or area of the organization.
It is crucial that the indicators are timely and relevant for the company since being aware in the early part of the business can help you and your workforce to avoid problems and get great opportunities instead.