Conversations from the Mirror42 Team

Pareto’s Principle and business performance

This interesting blog post comments on choosing Key Performance Indicators (KPIs) wisely to avoid an information overload. Although focused on supply chain management I believe this principle applies when measuring any business process.

“Following Pareto’s Principle and focusing on the 20% of metrics that are actually telling you how 80% [...] of business performance is actually being generated does deliver better results. The issue will become what are you going to use? Concentrating on the basics will provide a far better [...] dashboard to equip managers to focus on the real drivers of the [...] process.“

“Look to provide more than this and you are heading into information replication and data overload resulting in management delays in exercising decision making power and confusion over what the metrics are actually trying to tell you.“

 

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