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The Centre for Interfirm Comparison

Consultancy on Performance Indicators

Central to our work is the effective measurement of business performance. Our expertise in devising benchmarking metrics and performance indicators is available to companies on a consultancy basis. We use sets of management ratios which can give fresh insight into the effectiveness of an organisation and direct management attention to areas needing improvement.

It is essential first to identify those factors upon which success depends and to devise the most appropriate measurement for monitoring them. This is an area in which the Centre has unrivalled experience.

pyramid method of analysis

Our approach, which is now widely known as the pyramid method of analysis, is to select the ratio which best measures overall success and then to choose further ratios that examine and explain in greater detail the principal ratios.

These further ratios build up systematically into an integrated set that can be used to quantify the contribution which the various parts of an organisation make towards overall success.

The example shows a typical pyramid of ratios for a manufacturing company; the same principles, but a different set of ratios, can be used to analyse the performance of any organisation, whether it is a private company, a public utility or a professional firm. In fact the set of ratios goes far beyond the pyramid; the complete analysis of a company, may well involve over a hundred interlocking ratios, many of which will be unique to that organisation.

A different set of ratios would be chosen to look at a particular function such as computing, maintenance or marketing within a big organisation.


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