An excessively complicated index system may increase the complexity of computation. This work proposes a simplification method of index system based on R cluster analysis and factor analysis to extract the representative elements. This method can control the information loss rate of the representation element and explain the actual meaning of the representation element easily. It also avoids the weakness of factor analysis which is difficult to handle the problem with independent factor. The experiment results show that this method can improve the simplicity and effectiveness of index system significantly, and maintain the completeness of the index information without a prior knowledge is available.