Metrics and KPIs
Metrics and Key Performance Indicators (KPIs) are quantifiable measures integral to the practice of business analysis, especially in the solution evaluation phase. They are used to assess the effectiveness and performance of a solution or the overall business. The concept is defined within the PMI Guide to Business Analysis (2017) and is critical for evaluating the achievement of objectives and for guiding decision-making processes.
Metrics
A metric is essentially a quantifiable measure used for evaluation. In the context of business analysis, metrics help define how the performance of a solution can be quantified.
Types of Metrics
Metrics are versatile and can take various forms:
Business Objectives: These are metrics that articulate the desired business value of a product or service. Business objectives set the high-level goals that a solution aims to achieve.
Granular Metrics: These are more detailed metrics often used to assess the interim success of a solution either during its development or post-implementation.
Key Performance Indicators (KPIs)
KPIs are a specialized type of metric, usually set by organizational executives, for evaluating progress towards specific organizational objectives or goals.
Relation to Metrics
While metrics provide a broad scope of measurable factors, KPIs are more focused and are usually tied back to strategic objectives. KPIs serve as actionable indicators that show whether an organization is on track in achieving its goals.
Considerations for Selecting Metrics and KPIs
Defining a solution evaluation approach includes deciding on which metrics and KPIs should be employed to assess a solution. When choosing metrics and KPIs, analysts should consider:
Alignment with Objectives: Ensure that the metrics selected align with the business objectives and help in measuring what is vital for achieving them.
Availability: If there are pre-existing metrics within the organization that can be used, consideration should be given to leveraging them to avoid reinventing the wheel.
Acceptance Criteria: In the context of a solution under development, metrics can form part of the acceptance criteria to determine if the solution meets the outlined requirements.
Performance Evaluation: For already deployed solutions, metrics can be used for ongoing performance assessment.
In summary, Metrics and KPIs serve as the linchpins for solution evaluation and organizational performance assessment. They help in translating complex phenomena into quantifiable data points, providing a clear measure for success and areas for improvement. By selecting the right set of metrics and KPIs, business analysts and decision-makers can ensure more accurate evaluations and better-informed decisions.