Value Metrics' Destination - Essay Example

Value Metrics Qn Value metrics are used during the cases where the setting of targets is necessary, and where the management and the teams using the metrics need to simplify the setting of the targets. The simplification offered by value metrics allows the management to impose goals, without having to counter the questions targeted at the goals behind the targets (Neely, 2002). Value metrics are used when the management of a business wants to streamline the output of their human resources, especially through the cases where incentives are tied to metrics; connecting metrics to incentives increases the performance levels of employees, especially those that are required to work on a specific part of the work process. Value metrics are used and measured because the managers of organizations are, most times, interested in exploring the performance of an organization, beyond the level of return on investment (ROI) (Neely, 2002). Some of the outcome areas that are reflected through the use and the measurement of value metrics include customer interactions, tech-driven innovation and the impact of sales and marketing. Value metrics are used and measured when the management of an organization or business needs to establish the value of a partnership (Segil, 2004). Value metrics offer the management with a system for gauging the contribution of the relationship, at all stages of the alliance, ranging from the stages of creation to that of implementation and later during the termination (Segil, 2004). Some examples of the metrics that are very useful to businesses include sales increment, market shares, customer satisfaction surveys and margins. These metrics are used by the business, so as to enable it to evaluate its situation, following which they can plan the future outlook of the business. Among managers, value metrics are used and measured, as tools for guiding the process of allocating assets and determining the business strategies to employ (Neely, 2002). Other metrics, including Research and development effectiveness index give the business, the basis for the allocation of promotions and businesses, among the employees and the managers of the business. The use of value metrics and measuring them is helpful to businesses and managers, whether they are used to influence the behaviours of employees, to establish future strategies or to evaluate the performance of the business – they become influencers to decisions and actions. For example, in the case than organization measures variables a, d, and e, but do not measure b and c, they will change their outlook, and offer more attention to a, d and e. As a result, within a short time, the organization will be doing well in the areas a, d and e, but will be doing badly in areas b and c. The outcomes may result from the fact that the employees that perform well in the areas that are targeted will be rewarded through pay increases and bonuses (Neely, 2002). In such a situation, the long-term effect of the change of focus on the business may be more destructive than productive, as it will gain strength in the areas offered more attention and focus. The adverse effects of using the metrics may include that, in the case that increasing the focus channelled towards a, d and e leads to the making of counterproductive actions and decisions, the metrics will have failed, and they could also compromise the business (Neely, 2002). This scenario shows that the use and the measurement of value metrics is helpful, only in the cases that it focuses on the variables that are most important to the changes that the business is pursuing. Q2. The differences between internal and external metrics include that, external metrics are those used by the stakeholders from outside the organization, including customers and sponsors, when evaluating the value of an organization or the value of the organization’s training department (Popovici and De Jong, 2005). On the other hand, internal metrics are those that are used by the internal members of the organization or the training department; it employs them towards assuring that the organization or the training department is doing the right things, using the right strategies and making the right decisions. The conclusion that the actions, decisions and the dynamics employed by the internal members are used as the indicators of the future positive outcomes of the business or the department, which become explicit through the results measured using external metrics (Popovici and De Jong, 2005). From an approach-based point of view, external measures are summative in nature, but internal metrics are formative in nature. From the review of internal and external metrics, it becomes clear that internal metrics explore enabling strategies and objectives (the steps and the actions taken along the road), while external metrics are used for the assessment of terminal objectives (Popovici and De Jong, 2005). The ways external and external metrics complement one another is exemplified through the working of software products, in a simpler manner, than in the working of a business or an organization. The relationships between the two include that, internal metrics are used with non-executable software packages during the process of developing the product. Examples of the actions that utilise internal metrics include requirement definitions, requests for proposals, source code and design specification (Popovici and De Jong, 2005). In this manner of use, internal metrics allow the user of the product to evaluate the quality of deliverables, which enables them to make predictions about the quality of the final package. The use of internal metrics allows the users of the package, the opportunity of identifying problems in quality, enabling them to start correcting the issues as early as they can, during the life cycle of the development process. On the other hand, external metrics help the user to evaluate the quality of the package, through the measurement of the behaviour of the systems that they are working with (Popovici and De Jong, 2005). These metrics are only usable during the testing of the life cycle and throughout operational stages. Following the nature of using internal and external metrics, it is important that internal metrics get assigned with the external metrics in mind, which allows the user to establish a strong relationship between the two. The establishment of the relationships between internal and external metrics allows the user to use the internal metrics to predict the nature and the value of the external metrics (Popovici and De Jong, 2005). From the relationship explored, between internal and external metrics, it is evident that the two complement one another in that, internal metrics are used to forecast the outcomes to be attained from the measurement of external metrics, as well as the variables to be captured during the measurement of the metrics. On the other hand, the outcomes of external metrics exemplify the effectiveness of the internal metrics employed, which can indicate the necessity of reviewing the previous. This shows that the nature and the measure of external metrics are dependent upon the nature and the values used and incorporated, for internal metrics. The relationship between the two shows that external metrics complement internal metrics, during the formative stage, allowing the user to estimate the outcomes of processes and its effectiveness (Popovici and De Jong, 2005). Reference List Neely, A., 2002. Business Performance Measurement: Theory and Practice. Cambridge: Cambridge University Press. Popovici, E. and De Jong, K. 2005. Relationships between Internal and External Metrics in co- evolution. IEEE Congress on Evolutionary Computation CEC, 3, pp.2800-2807. Segil, L., 2004. Measuring the Value of Partnering: How to Use Metrics to Plan, Develop, and Implement Successful Alliances. New York: AMACOM. Read More