Let’s imagine it’s your first day at Insight Driven Contractors (IDC), a company that embraces data analytics to maximize performance. The goal at IDC is to take data insights from invisible to invaluable. Here’s what your tour of the office might look like:

Welcome to IDC! This is the executive suite of the company. The various monitors and video screens allow our executive team to track key metrics that measure company performance, such as strategic objectives, high-level project metrics, financial performance, risk and compliance indicators, recruiting and retention, and even corporate culture. Over the past few years, our executive team has completely transformed the culture from data-averse to data-driven to insight-driven.

You’re now in the project management area, where our PMs have monitors that display key metrics for their projects. These monitors are updated in real time using data from our ERP system, data from mobile devices in the field, data from our equipment and fleet vehicles, and data provided by our subcontractors on a daily basis. This gives PMs valuable insights about their projects’ performance trends. We also use predictive analytics to identify projects that appear to be underperforming early in the project cycle so we can take corrective action and increase our likelihood of success.

Finally, here is the maintenance department, where monitors display the critical metrics on the performance of our office building. We have also leveraged some of the technology from the Internet of Things (IoT) to automate much of the maintenance. For instance, when a light bulb burns out, one is automatically reordered based on a sensor in the bulb. Once scanned in at the loading dock, a maintenance worker is notified for installation.

That completes the tour of the office. In case you haven’t noticed, everything around here is tracked, and data is leveraged to provide insights into the operational performance of our entire company. The data, metrics, and visuals may be overwhelming at first, but remember that the data isn’t what’s important – the insights derived from the data are what matter.

Analytics & Operational Performance

While IDC is a fictitious company, the scenarios described are anything but imaginary. Contractors are leveraging data, analytics, and other technologies to track, measure, and improve their operational performance on a daily basis.

Whether it’s for an individual project or overall company performance, a metric exists that helps determine the quality of that performance. More importantly, insights within this data allow contractors to understand why the performance occurred and what action is necessary to either improve or continue the behaviors that led to it.

Key Operational Performance Questions

Previous articles in this series have addressed how to build an analytics team, how to incorporate analytics into workforce management, and how to use analytics for fraud prevention and detection. Now it’s time to focus on using analytics for improving operational performance. For a contractor, this may mean the operational performance of a particular project, service line, division, location, manager, or the company as a whole.

While some of the metrics and data sources may differ, try to focus on answering the following strategic questions:

• How is my team/project/equipment performing overall?
• If that is below expectations, what caused the poor performance and how can I correct it?
• If that is above expectations, what led to the improved performance and how can I leverage that elsewhere in the organization?

How-What-How

This sequence of questions – How am I doing? What caused that to happen? How can I fix or leverage it? – is quite effective in assessing almost any company’s operational performance.

Managing Financial Performance

Using the analytics framework referenced throughout this article series, let’s first approach the company’s financial performance.

Strategic Question

Are we successfully working toward meeting our financial goals for the current fiscal year?