Any kind of business, big or small, needs efficient tools to ensure that goal and objectives are achieved. Metrics, including balanced scorecards and KPIs, are one of the more popular management tools that companies utilize to accomplish this important task. Many companies rely on monitoring and evaluation systems to determine whether measures or metrics are functional or not. But when there are no competent monitoring systems are installed, then it will be difficult to judge the serviceability of the metrics with any accuracy. To prevent this from happening, management has to make sure that metrics have undergone a process where all potential problems that can arise in implementation are identified and addressed. This is where metrics SWOT comes in.
SWOT, which stands for Strengths, Weaknesses, Opportunities, and Threats, is not a new method of analyzing the overall proficiency of management, strategic and immediate goals, objectives and plans. SWOT analysis supplies management the means to formulate the appropriate balanced scorecards and metrics that address identified weaknesses and threats and the means to exploit identified strengths and opportunities in each of the key performance areas.
SWOT analysis tells an organization what it should do, what resources are available for use, how and where to access additional resources, what it is capable of doing, and most importantly, a clear idea of the current and future business climate it has to adjust to in the course of operations. It provides the organization not only the appropriate framework, but also the comprehensive one for preparing the best metrics and potential alternatives. In addition, because of the comprehensive nature of SWOT analysis, it is an excellent instrument for weighing the risks involved in actions being considered.
The use of SWOT analysis demands that management gather enough relevant data and information since formulation of applicable metrics is based on a precise assessment of the internal as well external conditions. And managers will have a hard time arriving at correct conclusions and judgment when data being presented to support the conduct of SWOT analysis are scarce and irrelevant.
The format of the SWOT analysis is flexible enough to accommodate the key performance areas of companies in whatever kind of business they are engaged in. The relevance of the information gathered on finance, internal processes, customer, and learning and growth will be dependent on the quality of questions asked and the answers given. The questions should be comprehensive as to cover strengths and weaknesses of current programs or plans, as well as implementation strategies under each key performance area. The threats and opportunities must also be clearly identified. For example, SWOT analysis for customer development program will start on analysis of strengths and weaknesses of the current program. This could cover a lot of questions that need careful preparation. The same is true in the analysis of opportunities and threats. From the answers to the questions, management can now formulate the applicable metrics required for the company to move forward.
The importance of metrics to management efficiency cannot be overestimated and companies are always trying to improve those that are already in place by doing metrics research. However, it has been proven time and again that the most applicable to specific needs are those internally developed. The conduct of metrics SWOT analysis is one of most valuable methods of developing reliable metrics.