The Difference Between Business Metrics And KPIs

Business metrics also mistakenly called Key Performance Indicators (KPI) provide a measurable value to the progress of an organization’s strategic goals. Without the metrics involved in strategic business planning, an organization would not succeed. Having to make impulsive decisions doesn’t produce desirable or measurable results with accurate data. 

KPI provides desirable results and tracks milestones within your strategy. Moreover, KPI reliably measures the success of your business strategy. The truth of the matter is that businesses rely on accurate and reliable information these days. 

Main Differences: Metrics vs KPIs 

Metrics and KPIs are often mistakenly used interchangeably, but the only distinction is that KPIs are the key measures that will have the most impact on moving an organization forward. It provides accurate insight and solutions into what an organization needs to measure and achieve in order to reach long-term strategic objectives. Simply put, Key Performance Indicators help define your strategy and keep everyone focused. 

On the other hand, business metrics track and provide data on an organization’s business process standards, but it is not the most important metric an organization needs to measure and monitor. Business metrics are not a viable option for an organization’s progress in lieu of objectives and strategic plans. Metrics are “business as usual” measurements that add value to your organization but aren’t the critical milestones you need to achieve. 

Ultimately, business metrics are used to measure the whole organization’s performance. While KPIs are used to measure subject-specific or process-specific methods within the organization. 

3 Components Of KPIs 

  1. Define your measure 

Defining what is needed to gauge performance is the initial step for monitoring KPIs. A descriptive and categorized approach is a better solution for performance measurement. 

  • Activity measure – measures activity that includes percentages, numbers, activities, or processes.
  • Outcome measure – measures output or progress against a defined outcome. Example: An increased percentage of revenue compared to last year. 
  • Project measure – measure the progress of a particular project. 
  • Target Structure – a result-driven measure based on numerical results against a targeted date.
  1. Define your target 

Define an achievable and realistic objective for the project. Use a numeric value when targeting the objectives in mind, it’s important to have the targets match the measurement type and the due date. 

  1. Outline the data source

A KPI needs a clear data source for its output to be accurate. Be certain when pulling data, the calculations needed to be utilized to create uniform and organized metrics. An accurate analysis of the available data is crucial during the KPI creation process. 

Tips For Measuring The Right Metrics And KPIs 

Crucial business decisions are made in economic situations that can break or make an organization’s longevity. As business leaders or supervisors, having a reliable oversight tool that measures the daily, weekly, monthly, or, yearly operations of the company and its employees is important. However, most businesses lack the knowledge to implement an accurate and reliable business metric process and key performance indicators. Here are three tips for measuring the right metrics and KPI: 

  1. Separate metrics from KPIs 

When it comes to separating KPIs from metrics you need to consider what is most important for your business. Any type of indicator can be a metric, but if this indicator is not providing any valuable information to make you improve then you should discard it. Reverting to the three components mentioned above, defining your measure, and target, and outlining the reliability of your data source works best. 

  1. Pick the right KPI

Choosing the right KPI is important to track business performance efficiently. There are two KPI tracking methods to choose from such as the SMART method and the Six A’s

The SMART method is a good guide for goal setting. It stands for specific, measurable, achievable, relevant, and time-bound. As the culmination of the topics expressly mentioned previously, the SMART method is probably the most efficient technique to use for KPIs. Because it provides clarity for the various and intricate processes within the organization’s structure into a simplified measurement of target objectives. 

While the Six A’s Method stands for Aligned, Attainable, Acute, Accurate, Actionable, Alive. In contrast to the SMART method, this practice also aims to evaluate the relevance of a KPI and it is useful for businesses that have too many indicators and need to narrow it down to a few. 

  1. Chose realistic objectives 

For KPIs and metrics to be efficiently measured, a realistic approach is needed for setting objectives. For example, setting targets of more than a 50% increase in sales from an average 10% sales performance from past years is an over-exaggeration and can be considered wishful thinking. Setting an achievable goal of a modest percentage based on the capacity and capability of the company should be the basis of goal setting. 

The Bottom Line 

That said, KPIs are the key measures that will have the most impact in moving an organization forward, while business metrics track and provide data on an organization’s business process standards, it is not the most important metric an organization needs to measure and monitor. As businesses nowadays scramble to function effectively and efficiently, the importance of both cannot be understated. It’s crucial to keep in mind the distinction between the two, to work towards the same end goal for the success of an organization. 

What’s Next for the BPO Industry

What’s Next for the BPO Industry

From far and wide, the BPO industry has been a staple service for numerous industries. The biggest question that comes to mind is “what is the next big thing for the BPO industry?”. Critics often talked about that outsourcing will eventually die out. However, current data shows that global BPO market will grow from USD 245.9 billion in 2021 to 525.2 billion in 2030. An average growth rate of 9.1% per year will consolidate its future as one of the most valuable market. 

Countless calamities, economic downturns, conflicts and a pandemic did not impede the growth of BPOs. the truth of the matter is during the pandemic, businesses in the US opted to maintain their operations by outsourcing to BPOs. This saw an exponential growth for BPO companies around the world. 

Even though uncertainty looms over the geopolitical landscape. Our inter-dependent economies in a globalized business structure will maintain the status quo. The stability of the BPO industry and other businesses will continue to grow or prosper as shown by the numbers stated previously. 

Ultimately, the next big thing for BPOs is to maintain their reliability, flexibility, adaptability, and dependability as a business partner. That being said, the BPO industry will continue to its rise as a market leader in the services sector. 

Early Adapters of New Technologies

Outsourcing companies are eager to incorporate new technologies such as artificial intelligence, digital communications, cloud computing, and the latest trends that will help streamline everything from analyzing data, improving communication with clients, and minimizing the cost of doing business. 

Emerging Technologies:

  • Artificial intelligence
  • Cloud computing
  • Virtual and augmented reality 
  • Blockchain 

Incorporating new technologies may be a hit or miss for success. However, technology is dynamic, a business must never be stagnant when it comes to new technologies or else they will lose out to their competitors and customers. 

Greater Role in Business/Client Operations

Traditional BPO roles such as customer service support, telemarketing, virtual assistants, and data entry are a thing of the past. However, those roles still make up the majority of the outsourced positions offered by BPO companies. 

Years of collaboration and growth by numerous companies and BPO providers have instilled a level of greater trust in each other. That being said, most client companies are satisfied with the service they had experienced and are looking for more ways to outsource other sensitive services to BPO companies. 

Keeping it Affordable

One thing that will ensure the future of BPO companies is to keep their services affordable. The truth of the matter is that, whether or not they will increase their pricing during this time of high inflation. Keeping in mind that they will still have to maintain their prices at an affordable rate without losing profit.

The Wrap Up

All in all, the future of the BPO industry will remain unchanged and some may say saturated. In my honest opinion, that is a good thing. A saturated market will keep the competition healthy. As opportunities and technologies continue to persist, the BPO market is here to stay.

Clark: The Next BPO Hotspot of the Philippines

Clark: The Next BPO Hotspot of the Philippines

Clark Air Force Base, located in the Philippines, has been the American Military’s largest overseas base until they left in 1991. Today, the base saw unprecedented investment by The Philippines Government and private investors. Its openness to foreign investments, highly skilled workforce, lower salaries (compared to the US), mastery of the English language, and good infrastructure in place made it an attractive location for BPO facilities. 

For more than a decade, the Philippines has been one of the top destinations for BPO companies to set up shop. Unknown to most westerners, Clark Freeport Zone is perhaps the most desirable location in the Philippines for setting up outsourcing facilities. 

Located just north of Manila, Clark is perfectly suitable to cater to foreign citizens because of its numerous recreational and leisure amenities such as golf courses, casinos, hotels, and many more. Besides those mentioned previously, Clark has numerous infrastructure projects currently being built. 

Ease of Doing Business

Probably the first factor for investors to consider before opening up a facility, the ease of doing business is aimed at streamlining current systems in place and quick government services that will make it easier for companies to set-up with less red tape involved.

Importantly, the Philippines has been one of the top recipients of foreign investments in South East Asia. Further positioning Clark as one of the top destinations in the country to open up a business facility. 

Business Continuity 

Minor interruptions in business operations can cost a BPO company to lose money and clients. Guaranteed continuity of operations is key for BPO companies.

Envisioned to be a disaster-proof metropolis, Clark embodies the spirit of resiliency that Filipinos are famous for. Located well above sea level, Clark is free from flooding brought upon by strong tropical typhoons experienced mainly in Metro Manila.

Moreover, during the pandemic, Clark Development Corporation (CDC – The governing authority of Clark) offered free COVID vaccination for people who are working in Clark. 

Clark provides security in terms of economic, political, and societal stability. Regardless of the changing situation across the world, Clark will always be open for business. 

Tax Incentives 

Low corporate tax is an attractive benefit for businesses. In fact, one of the primary reasons why foreign companies are leaving their home countries is because of the high obligation to pay corporate taxes.

With that in mind, for decades numerous companies are leaving or had left their home countries to set up their headquarters in countries that offer low-income tax, corporate tax, and tax holidays like Clark. 

  • Flat 5% rate income tax for foreign-owned corporations.
  • 100% foreign-owned companies can lease land for up to 50 years without the need for local partners. 

Infrastructure Investment 

Massive monetary investment by the private and public sectors has developed Clark into the premier business hub in the Philippines. Because of this, it has become a cheaper rival than those of Bonifacio Global City, Metro Manila, and Cebu Business Park, Cebu.

In addition, both BGC and CBP have limited areas for expansion. Clark’s geographic size covers 3,000 hectares while, BGC area is 240 hectares, and CBP is only 50 hectares. Size alone gives Clark more room for future expansion. Current government policy aims to improve existing and build new infrastructure to facilitate the Philippines’ growing economy. 

  • Newly commissioned international airport.
  • On-going construction of the northernmost portion of the North-South Commuter Railway. 
  • Massive Government spending to upgrade infrastructure.

Why Clark will be the BPO Capital of the Philippines

Positioned to be the main bustling metropolis north of Metro Manila, with all the amenities to sustain a global business environment, Clark is poised to be the center of BPO operations in the Philippines. Therefore, foreign-owned companies continue to flock to Clark Freeport Zone seizing the continued allure it may bring.