Business Efficiency and Target Setting
 

Which of our business units are the most efficient? What levels of performance can we realistically expect? These questions are not straightforward when your units have multiple targets or are judged on a balanced scorecard. 

Efficiency analysis will answer these questions.  It will identify your best-practice units. Based on their achievements, we can then construct realistic and achievable performance targets for each of the other units.

Efficiency analysis ranks your business units in terms of the efficiency with which they convert resources such as staff, customers and equipment into outputs such as products, transactions or sales. A single efficiency measure is computed for each unit even when performance is judged by multiple criteria.

Targets are set for each aspect of performance. Because these targets are based on actual performance levels in your best-practice units, you - and your managers - know they are achievable.

(See also Target Setting Case Study for a real-life example.)

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