‘My key KPI’ is a weekly content series where we ask CFOs and FDs what metrics and measures they use to drive their businesses forward.
The aim is to understand how different finance professionals across a broad array of industries and sectors use data to inform their decision making.
This week's edition features Norman Thompson, the head of finance for Vidatec, a mobile app developer.
My key KPI: Work-in-progress measure
Vidatec is a company in flux. The Stirling-based app development firm has a new name - it used to be Dogfish Mobile - and big ambitions.
Until now, the company has tended towards creating apps for other organisations (like Public Health England). But Vidatec is now venturing into product development and its FD Norman Thompson is tasked with keeping this transformation on track.
Thompson, an ACCA qualified Irish transplant, has been with Vidatec for five months. Before moving to Scotland, he spent 18 years in London working for well known businesses like UbiSoft and the bike maker Specialized.
He left the Capital after taking a career break, when he realised he wanted to be somewhere more “wilder” and “close to nature”. And so, he decided on Scotland and moved there before landing the gig at Vidatec.
“Vidatec is an SME, so it’s not necessarily hugely complicated in terms of metrics. But it is going through a rebirth. What we want the company to be in a year’s time is very different from what it is now,” he said.
“I’ve got your traditional metrics of cash generation, profit, revenue growth - but, for me, over the next six months to a year, the key metrics will be transformation points.” These transformation points, he explained, are the targets Vidatec must hit if “we want to transform the business”.
“So I’m keeping track of events and making sure those events happen in a way that is still sustainable. We want to push ourselves and reach for something, but they need to be grounded in realism.
“We’re pushing into creating our own products, and that’ll become more important for us over the next few years. We have to keep an eye on the cost of that and the resource allocation and that these things are being done a commercial manner.
“The company needs to be healthy enough to achieve your visions.”
Besides these milestones, there are two two numbered metrics Thompson keeps an eye on. The first is a work-in-progress measure. “We recognise revenue within our accounts on a work-in-progress basis. Our projects go on for a while, so I’ll sit down with operations director once a week, every Thursday.
“We have our tracking sheets, and I track the work-in-progress on every project that month, and we update how the projects are progressing. So that will compare to our budgeted revenue for that month. We watch closely where our revenue is going for that month.”
And then, Thompson said, Vidatec is always looking at invoicing levels. “That feeds into cash and I’m monitoring cash weekly.”
About Francois Badenhorst
I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter.