Introduction to Key Performance Indicators and Metrics as applied to Business Analysis profession. It is well known strategy within many top enterprises today "That which you measure and track you influence" and "You cannot improve that which you do not measure".
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Key performance indicators metrics overview
1. Key Performance Indicators and
Metrics
IIBA Spring 2012 Study Group
Assignment #1
Shankar Somina
April 9 , 2012
2. Introduction
A metric is a quantifiable level of an indicator that an organization
uses to measure progress. Not all metrics can be KPIs.
Some examples of Metrics: Number of trouble tickets closed per week, Number of
overtime hours per week, Net Revenue, Cost per FTE, Gross sales per week etc.
A Key Performance Indicator (KPI) is one that measures progress towards a
strategic goal or objective.
An indicator identifies a specific numerical measurement that represents the
degree of progress toward achieving a goal, objective, output, activity or further
input.
A good KPI has five characteristics: Clear or Uncomplex, Relevant, Economical,
Adequate, Quantifiable.
Use of Metrics and KPI are necessary for data-driven and analytical decision
making.
KPIs must be measured with a metric and tied to a target relevant to the business
success, project and process. Not all indicators can be counted directly.
Examples of KPIs: Gross revenue per release vs. target, Customer satisfaction:
measured response score vs. target response score, Hours of resource usage vs.
expected usage, Actual measured profit vs. Expected profit
3. Business Analysis Performance
A study of section 2.6 in BABOK ver 2.0 provides the purpose, description, inputs,
elements, stakeholders and outputs for the “Manage Business Analysis
Performance” activity.
The purpose of metrics is “To manage the performance of business analysis
activities to ensure that they are executed as effectively as possible.”
Capturing actual performance metrics is a process that occurs through the
business analysis effort and is implicitly a potential output from every business
analysis task.
In this task, actual performance measures are captured, analyzed, and become
the basis for taking corrective or preventive action. The corrective action may
impact development of future BA plans.
Example metrics are frequency of changes to requirements and the number of
review cycles required.
References:
BABOK (2009) 2.0, Sec 2.6, Pg. 49, Sec 9.16.2, Pg. 182, Toronto, ON: IIBA
Kerzner H. (2011). Project Management Metrics, KPIs, and Dashboards. Hoboken,
NJ: John Wiley & Sons.