27 Aug 2022


Metrics and Analytics: How to Measure and Improve Your Business

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Metrics are quantitative or qualitative verifiable measures of an organization, defined with reference to a common point that serves as a unit of measurement. Metrics figures are always proportional and consistent with the value an organization delivers to its target market. The three primary functions of metrics are control, communication, and improvement. Metrics enable operations manager to control their performance and communicate accurately to internal workers and external stakeholders. Besides, metrics allow managers to identify gaps and to effectively make adjustments and improvements (Melnyk, Stewart, & Swink, 2004). This paper discusses essential metrics in operations, their links to an organization's financial performance, and the data involved. 

Chosen Metrics 

The three most important metrics of operations managers are quality of work, employee efficiency, and return on advertisement spend (ROAS). In both service and product industries, quality is the essential aspect that drives the sales and profits of an organization. Quality of work is the measure of the grade of delivered service or product against the ideal standard. Parameters capture under quality measurement include client satisfaction levels, reworks, and rates of errors. Quality of work supports triple bottom line theory by increasing sales and profits, ensuring customer satisfaction, and minimizing wastages. Employee efficiency is the rate at which personnel meets their set goals. Efficiency is measured by checks on productivity, cost while at operation, mistakes made, and met deadlines. Efficiency increases profits by minimizing costs and is sensitive to the environment through minimal errors and wastages incurred. The benefits make it fit in the triple bottom line framework. The last metric, ROAS, is monitors the cost of every advertisement against revenue earned from the advert. The metric enables the identification of profitable and unprofitable adverts for informed decision making (Berenguer, 2015). It's calculated by dividing revenue brought by an advert by the cost of the advert. Monitoring of ROAS helps in filtering unproductive adverts, thus maximizing an organization's profits. It also helps identify adverts that satisfy customers and minimizes environmentally unfriendly materials consumed on unproductive adverts. The three pros make ROAS a match for the triple bottom line framework. 

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Financial Performance 

Quality of work supports financial performance in various ways. First, quality work minimizes the cost of operations by reducing errors and reworks. Lower cost of operations results in more significant profit margins. Also, quality work increases sales volumes, which has a direct impact on the net profits and the financial performance of an organization. Besides, quality work reduces the costs of advertisement since quality requires little marketing efforts. The efficiency of employees ensures that targets are met timely at a minimized cost. Similar to the quality of works, efficiency increases financial performance by promoting lower costs and increased profit margins. ROAS helps elimination of adverts whose cost is uneconomical in comparison to the revenue gained (Berenguer, 2015). Abolishing such adverts saves an organization's revenue, thus a boost to its financial performance. 


The cost of an advert and direct revenue gained are needed to determine ROAS. To ensure data quality, ROAS analysis should be done in a specified geographical boundaries and time. Feedback from customers should also be collected, prompting the effect of the advert on their choices. Data collected to determine the quality of works include customer satisfaction levels, rate of reworks, and errors. Data quality under the quality of work is ensured through an anonymous collection of responses from customers and accurate raw data capturing and documentation within the organization. Under employee efficiency, the cost of production, targets met, and errors made are captured. Online and accurate internal raw data documentation also ensures the integrity of employee efficiency data. 

Data Analytics 

Data analytics is the process of analyzing raw data for business decision making. The analysis process involves observation of previous and existing trends to predict future outcomes. Analytics is vital as it minimizes costs, maximizes profits, and ensures customer satisfaction through fair pricing and quality deliveries. Analytics in manufacturing setups reduces the cost of operation and wastages, thus fitting in the triple bottom line theory. 


Metrics are verifiable measures that offer an organization insight into the past, existing, and future performance of an organization. Among the most critical parameters is the quality of work, employee efficiency, and return on advertisement spend. The collection of quality data and accurate analysis of the three metrics ensures increased financial performance, customer satisfaction, and minimizing of wastages that are unfriendly to the planet. The three positive impacts fulfill the interests of the triple bottom line framework. 


Berenguer, G. (2015). Modeling approaches and metrics to evaluate nonprofit operations.  Advances in Managing Humanitarian Operations , 9-31. http://doi.10.1007/978-3-319-24418-1_2 

Melnyk, S. A., Stewart, D. M., & Swink, M. (2004). Metrics and performance measurement in operations management: Dealing with the metrics maze.  Journal of Operations Management 22 (3), 209-218. http://doi.10.1016/j.jom.2004.01.004 

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StudyBounty. (2023, September 16). Metrics and Analytics: How to Measure and Improve Your Business.


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