Magazine article International Trade Forum

Measuring Performance. (Exporting Better)

Magazine article International Trade Forum

Measuring Performance. (Exporting Better)

Article excerpt

For a county maintaining competitive advantage means managing the system which supports export development -- and measuring performance. The tools are available Nevertheless they are rarely used particularly by developing countries. Why is this so?

Too often, performance measurement is placed at the end of any process. It should, of course, be positioned close to the beginning. As one business participant at ITC's 1999 Executive Forum (Anthony Guiseppi, General Manager, Trinidad & Tobago Manufacturers Association, Port of Spain) remarked: "If you can't measure it, you are not doing it." Some form of assessment mechanism, therefore, needs to be built into the export strategy process at the start.

When performance measurement does take place, it is generally the result of external pressure from a Ministry of Finance and Planning or from an international funding agency in response to a request for funds to implement a national export strategy. A major reason should be to increase effectiveness and efficiency. To quote Raymond Yip of Hong Kong's Trade Development Council (TDC): "To stay relevant and vibrant as trade promotion organizations, we must continue to review, renovate and reinvent ourselves. And to do this we need to establish benchmarks to measure how far we are achieving the objectives we have agreed."

More competitive world

In an increasingly competitive world, neither client nor service provider can rest on their laurels if they wish to remain in business. Performance measurement is a powerful learning tool: it helps both parties to understand better what works, what doesn't and why. As a result, they can change strategy or their way of doing something, in order to increase impact and possibly to reduce costs. Cambodia's Secretary of State for Commerce, Sok Siphana, has even suggested that for developing countries: "Maybe learning should be more important than measurement."

The questions then arise for strategy-makers:

* What should be measured?

* How to measure performance?

* What are the 'best practices' and tools?

What to measure and how?

There are three recognized levels of performance measurement of increasing difficulty:

* The first focuses on inputs (management, strategies and resources such as staff and funds) and throughputs (timeliness, reach and the same resources). All of these are entirely within the capabilities of the trade support institution (TSI) to measure.

* The second focuses on outputs (i.e. services rendered, information provided, documentation issued). These are often measured fairly easily through customer satisfaction surveys.

* The third measurement focuses on outcomes, or impact. But this is very difficult to measure. It concerns effects such as the increase in clients' wealth, on trade flows and on national income. Nevertheless, the ultimate aim should be to measure impact, because that is what really counts.

Strategists must also recognize that 'one size doesn't fit all'. Best practice suggests that one should be monitoring and reviewing all stages of the process on a regular basis. As Mr. Yip observes, strategy-makers and TSI executives must get used to:

"Asking the 'Tough Questions':

* Should we still be doing this?

* Is this the best way to do this?

* Could these resources be put to better use?"

These questions need to be posed at every stage.

Reviewing strategy

Many countries seem to reassess their national export strategy only as part of a review of the national trade promotion organization (TPO). In recent years, Sweden and Switzerland have carried out major reviews of their TPOs, which implicitly involved a review of their national trade strategy. In both of these countries, the TPO structure remained essentially the same. In other countries, however, the review has led to a merger of trade and investment promotion agencies, as is currently under way in Malta, or a separation of agencies, as occurred in Mauritius and was recently being considered in Portugal. …

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