Productivity indices measure how well the company is using its resources, both financial and non-financial (i.e. capital, materials and workforce), to produce a certain output.
As indices, they are expressed by the relationship between a given output (turnover, production, etc.) and the resources used to achieve this result.
The productivity indices help managers, entrepreneurs and professionals to easily understand the efficiency of the use of company production factors and therefore to make decisions to modify, review or confirm existing strategies.
This is why these indices are fundamental in the control and strategic management process.
Even among entrepreneurs there are often those who underestimate them or completely ignore them, making decisions in the wake of emotionality or the "sixth sense" and not on certain data.
KPIs, on the other hand, are the best ally of entrepreneurs, managers and professionals because they help to dynamically evaluate their company, to have full control of the situation and to understand where to focus resources to maximize results.
Even a small business reality can understand if it is working more and more efficiently by comparing its current and past KPIs.
From the comparison, however, between one's own productivity indices and those of similar companies or with sector data, if available, you can have very useful information to understand, for example, your positioning, if you are doing well or better than competitors etc ...
But how to set up an agile and effective KPI system? How to choose between the amount of data, the ones that are really important for the specific case? What is the difference between productivity indices and profitability indices? How often to monitor business numbers?