Why do companies need to measure?
Real and sustainable improvements to the bottom line of the business can only be achieved if we know where we are, where we need to get to, how to get there and whether we are moving in the right direction.
In business, widespread use is made of measurement in order to manage the organisation and all the parts that go to make it up.
If we can measure or quantify something then we have a good basis for analysis and then for deciding what best to do about it. If we do not measure we are likely to be basing our actions on vague ideas and feelings. This can bring big problems!
There are two main kinds of measurement. We tend to think that measurement involves describing something using numbers, figures or statistics. This is a quantitative measure. For example, we could measure the number of completed examination papers, or the percentage of correct answers.
It is also possible to describe something in terms of its quality or qualities, i.e. what it is like. This is a qualitative measure.
Balancing the measurements of QCD.
It is imperative that we do not rely solely on one measurement of business performance, as this could give an unrealistic view of the business. For example, if we only use quality as a measure and focus on quality improvements, we may actually have a detrimental impact on other measures (e.g. cost). For that reason, we need to understand as much about the business performance as possible.
A set of seven common measures has been developed. When used together, they provide a balanced approach to understanding business performance.