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Measuring performance in services is ever more important for most companies—but hard. The biggest hurdles: services are highly customizable, and the people who deliver them differ unpredictably in experience, skills, and motivation. Developing internal benchmarks based on detailed metrics is the best way to surmount those hurdles. The first step is to create a cost tree for each service line.
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Only with such cost trees can a company understand its true cost drivers, use similar metrics to compare the performance of different accounts, and learn where and how it achieves its own best practices. Managers can then determine which improvements would actually boost its performance in services. For more on how to understand—and raise—their productivity, read "Measuring performance in services." (Premium)
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