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What business metrics matter?

Should we stop looking at vanity metrics and only focus on actionable metrics?

This question was asked by an attendee during the Proformative webinar "FP&A: Innovations in Financial Analytics to Support Organic Growth and Business Strategies" held on October 17, 2013.  A video of the webinar can be viewed here: https://www.proformative.com/events/fpa-innovations-financial-analytics-support-organic-growth-business-strategies   

Answers

Topic Expert
Keith Perry
Title: Director of Global Accounting
Company: Agrinos, Inc.
(Director of Global Accounting, Agrinos, Inc.) |

I'm actually a fan of vanity metrics. It helps to have sizzle to sell the company!

That being said, operationally you need to have the core metrics...cash and cash flow, pipeline and quote to cash, % utilization, revenue / employee, etc.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Kieth -

Sizzle is fine, as long as the road from data to cooked requires zero additional time. Otherwise what really is the ROI on that sizzle.

I've been asked more than once to have reports, spreadsheets, dashboards, you name it, for KPT's/metrics based on a whim. All those hours spent, to be looked at once and discarded....

Chris Shumate
Title: Accounting Manager
Company: Dominion Development Group, LLC
LinkedIn Profile
(Accounting Manager, Dominion Development Group, LLC) |

I think vanity metrics are useful, but perhaps only as a marketing tool. In a large organization a CMO should keep up with the vanity metrics. I feel they do matter to a business, because without vanity metrics a potential customer doesn't know what you may be capable of doing. In order to stay competitive in the market place if a company's competitors are giving vanity information I think it could do harm to the company that decided to only do actionable KPIs.

I do think there is an ROI that is added to the "sizzle". Namely repeat customers, new customers, new vendors even that could become strategic partners for the company.

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