How to calculate profit?
To calculate profit, we start by achieving sales.
Manage your costs carefully to achieve the profit target you have set.
Our cost base includes labor and non-labor costs, which we will manage closely.
We first want to understand two overall indicators.
The first metric, or “”key metric,”” measures the number of units managed per FTE (full time).
We will measure the number of units managed per FTE (full time equivalent) by technology.
This indicator is probably the best measure of efficiency relative to the number of people.
Once you have determined your efficiency metric for the year, it is very important that you achieve it.
The indicator is the percentage of units achieved against the number of units per FTE.
100% is the goal, and anything below 80% is a failing grade.
Productivity achievement should be averaged out according to the number of technologies managed.
In other words, if you have three key technologies that you manage, averaging the achievement across the three key technologies will result in a goal of 100% or higher.
The key here is the planning process you have considered, and don’t fool yourself with made-up metrics.
If your delivery team has a solid set of efficiency metrics in place, it is important to track them closely and adjust them accordingly.