People work this hard because they all expect a flawless system!
This factor has been a motivation for businesses and enterprises worldwide and will remain so as long as civilisation persists.
The fact that operational excellence drives remarkable results when monitored and analysed is what every COO already understands.
They might need more insight about it with the help of selectively choosing operational KPIs.
If you’re about to become a chief financial officer (COO) or someone who’s already a COO – beginner or experienced – and you’re reading this post, then this post might offer you the help you need.
What Are Operational KPIs and Why the COO Must Know Them?
Well, KPIs, as you’re well aware of being a COO, are known as Key Performance Indicators, which gives you the sneak peek into what works and what doesn’t when we’re considering functional data.
Speaking of enterprise or organisational workforces, operational efficiency comes into relevance because it’s that application that ensures the system runs more effectively and flawlessly.
Where do KPIs fit in then?
Well, simply put, operational KPIs are KPIs that signal the health of the processes of operational efficiency. Yes, these KPIs present data internally to an enterprise or an organisation.
As a COO, you need to work with operational KPIs because they give you the data or fact sheets to actually achieve the scalability factor in your company’s operational efficiency processes.
Moreover, with these metrics, you get to ensure the company’s financial progress, sustainability performance, dynamics of workforce, and more to maintain sound operational efficiency.
Therefore, checking operational KPIs, whether their sales operational KPIs or quality control metrics, remarkably enhances your productivity as a COO because you can now make better strategic analysis and build a failproof system for your brand’s upcoming agendas.
Watch: How to become a successful Chief operating officer | COO | IIM Lucknow | Imarticus Learning
What Operational KPIs COOs Aren’t Supposed to Miss out on
COOs need to check operational KPIs for a variety of reasons, and it may turn out that they must focus on industry-specific KPIs.
Sometimes, discovering these KPIs is as easy as a mandatory part of the operational process. At other times, though, COOs are dictated by generic or situational needs to investigate certain operational KPIs for solving unavoidable issues in the way of operational efficiency.
If this all seems too murky to you, then read about these examples of operational KPIs, which, as a matter of fact, are the ones you need to work with in reality.
- Current Accounts Receivable and Accounts Payable
This KPI tells you how efficiently money flows in and out of your business. A healthy balance means your company isn’t waiting too long to get paid. It’s not even rushing to pay others too early. For COOs, it’s a key pulse check on operational liquidity.
- Net and Gross Profit Margin
These numbers ask you: Are your operations truly making money? Gross margin gives you insight into how well you’re controlling production costs, while net margin takes a step back and shows how efficiently the entire business is running. Together, they help COOs see if their day-to-day efforts are adding up to long-term success.
- On-time Delivery Rate
When customers get what they need, exactly when they need it, that is where the trust grows. This is one of the operational KPIs that measures how consistently your team delivers on promises. Delays here can quietly erode brand value, making it crucial for COOs to keep this rate high.
- Quality Control Index
What if you didn’t show your customers you care, instead of simply telling them about it? A high-quality control index means fewer reworks, fewer returns, and more loyal users. For operational leaders, it’s a sign of discipline and reliability baked into every process.
- Operational Expense Ratio
This ratio compares what you spend running operations to what you earn. telling a very real story. If costs creep too high, profits shrink. COOs use this KPI to trim the fat and keep things running lean without cutting corners.
Watch: Efficiency Ratios Explained – Measure Business Performance & Productivity | Module 04 I Imarticus Learning
- Costs for Employee Training
Training costs may seem like overhead, but they’re actually an investment in smoother operations. This KPI reveals how much you’re putting into upskilling your workforce. Smart COOs know about it. They are aware of the fact that better-trained teams make fewer errors and move faster.
- Return on Equity and Return on Assets
These KPIs zoom out to show how well you’re turning investment and assets into profit. While finance may track them, smart COOs watch closely, simply because strong operations are what make these numbers shine.
- Environmental Sustainability KPIs
From energy use to waste reduction, these KPIs measure how green your operations really are. Customers and regulators are paying attention. So should you. COOs who prioritise sustainability often uncover new efficiencies in the process.
Conclusion
You need operational efficiency to be uncompromised, no matter what business it is.
This is why the industry needs many COOs. These professionals should have in-depth knowledge of everything related to the operational processes, including how to read operational KPIs and make data-powered decisions, to ensure a flawless system we talked about at the beginning of this post.
Imarticus Learning can help you do that. With the platform it created thanks to its faculties, you can upskill yourself with all the technical knowledge you need especially if you are aspiring to become a data-driven strategist and problem solver.
FAQs
- What are operational KPIs, and why do they matter for COOs?
KPIs are numbers that point to what’s going well and where a little extra attention might be needed. When you’re leading operations, it’s these small signals that help you make the right calls without second-guessing. - Where do sales operational KPIs fit into the bigger picture?
Sales operational KPIs may sound like something only the sales team cares about, but they actually show whether your backend is keeping up with customer expectations. - What are operational KPIs, and why should COOs track them?
They help COOs see what’s working and what’s not. These numbers point out areas that need fixing before they become bigger problems. - How do sales operational KPIs relate to operations?
They show if the backend can keep up with customer demand. If delivery or support lags, sales won’t hit the mark, so COOs need to watch them too. - Why should COOs monitor training costs?
Because better-trained teams work faster and make fewer mistakes. Tracking this tells a COO if their people are set up to run things smoothly.