Performance assessment in Web Hosting Companies using a Balance Score Card

Evaluating the performance of an organization has always been one of the priorities of its management. KPIs (Key Performance Indicators), together with their target values on a BSC are a means to do that. This act of assessing progress is needed to ensure that the company moves according to the pre-decided strategy.

This also filters the meaningful efforts from the non-paying ones. Owing to the multi-dimensional approach promoted by KPI practice, the benefits too are manifold. Invariably its application has been gaining significance in several sectors, including relatively new businesses like Web Hosting.

One can frame indicators in several directions to measure different perspectives. To start with, those related to financial aspect of the company, internal processes, customers view and growth prospects can be had. Financial perspective is to collect revenues to keep the company alive. Parameters such as price charged for extra disk space, % decrease in refunds for not meeting SLAs, etc. can be used. Efficiency of Internal Processes can be improved by following indicators like time taken to fix problems, disk space, average time for provision etc. Customer perspective can be had from number of support and security systems, downtime per week etc can be used. Growth can be measured via indicators like % increase in number of PHP/CGI/AHP sites the company hosts, percentage increase in disk space and bandwidth and similar ones.

Challenges faced by web hosting companies are numerous. A number of support systems, back-ups, and security provisions are to be in place to provide customers a complete and error free package of services. In addition, the organization is required to be on a consistent lookout for the new technology that is entering the arena. The needed up-gradations in the company's operations should be done as soon as possible. Moreover, arrangements for providing additional services on request by the clients should be there. Add to this the gradual increase both in the number of competitors in the sector and the competitive nature of the existing players. In this regard, the transfer of business to overseas vendors is yet another threat to the traditional web hosting companies.

The hurdles in the path of a web hosting company often create a very complex environment to be in. This demands an effective and efficient gauging system to make pre-planned moves and that too, with minimum deviations. Wastage of resources cannot be allowed at all. To achieve this, performance measurement tools like KPI is used. The management of web hosting companies implements this device to know whether the efforts are paying off in the desired way or not. This is possible by comparing the present values of parameters to target values. This reveals the extent of divergence between the magnitudes. Further, flaws can be dug to draw maximum from the attempts.

In a technology focussed business like web hosting, use of company-specific quantitative measures is imperative as it not only helps top-level managers to check their employees and teams, but it also enables juniors to get a clear idea of what is considered success by the management. Moving on the same lines, the employees will work in a more productive manner and their attempts will stand greater chances of being appreciated and rewarded. All such factors can propel web hosting companies to achieve greater performance.