Additional key performance indicators (KPIs) can enhance these purely financial indicators and provide insight on operational performance. Operational performance indicators are very industry-specific and also vary with a company’s business model and its role in the value chain.
Among the few ratios that probably apply to all industries, we can cite the revenue per staff ratio, although benchmarks here will vary widely from capital-intensive industries to manpower intensive ones, such as services.
In telecom businesses, the following key operational figures are commonly used:
- subscribers per staff (service provider)
- susbcriber per BTS site (service provider)
- average revenue per user ARPU (service provider)
- CAPEX per subscriber (network operator), CAPEX per cell site (mobile operator), CAPEX per building passed (CATV network operator)
- CAPEX percentage of revenues (network operator)
- R&D percentage of revenues (equipment manufacturer)
- subscriber acquisition cost per new subscriber (service provider)
- churn level: this is percentage of customers lost over a certain time period (service provider)
- average selling price (consumer goods manufacturer).
Additional qualitative factors can be taken into account in a balanced scored card approach and linked to quantitative indicators – as the saying goes, only what gets measured gets done.