How do we ensure that our change has been successful?
I trust all of us to look at our bank balance every month, possibly every week, because it is an essential indicator of how healthy our finances are. Similarly, organizations, projects, and changes also have to track themselves to ensure that they are healthy and on the right path.
The Metrics and KPI techniques measure the performance of solutions, solution components, and other matters of interest to stakeholders. An indicator shows the degree of progress toward achieving a goal, objective, output, or activity. KPIs are ones those measures progress towards a strategic goal or objective. A metric is considered to be a quantifiable level of an indicator.
Example of HR process KPI
% of resource requests fulfilled within SLA.
Average # of applications received per advertisement.
The ratio of short-listed candidates from applications received.
The ratio of interviews scheduled vs. short-listed candidates.
Reporting is the method of informing stakeholders of metrics or indicators in specified formats and at specified intervals. Monitoring is an on-going process of data collection to determine how well a solution is performing compared to expected results. Finally, evaluation is a systematic and objective assessment of a solution to determine its status and effectiveness to meet objectives over time and to identify ways to improve the solution to meet objectives better.
6 characteristics of good indicators:
- Clear: Precise and unambiguous.
- Relevant: Appropriate to the concern.
- Economical: Available at a reasonable cost.
- Adequate: Sufficient to assess performance.
- Quantifiable: Can be measured.
- Trustworthy and Credible: Based on evidence and research.
Use proxies when direct indicators are not available or expensive. Secondary sources of data are economical but lack quality. Business analysts use primary research such as surveys, interviews, or direct observations if necessary.
Metrics: Can be a specific point, a threshold, or a range. The range can be useful if the indicator is new.
Establish data collection, analysis, and reporting procedures. The data collection procedure covers units of analysis, sampling procedures, data collection instruments, frequency, method, and responsibility for data collection.
Reporting: Reports compare baseline, current metrics, and target metrics. Trends are more useful than absolute metrics. Visual presentations are more effective than tablets.
- Understand the level to which a solution meets an objective.
- Facilitates organizational alignment.
- Can be expensive, bureaucratic, and useless.
- Can distract from key responsibilities.
- Can lead to sub-optimal overall performance.
Worked out Example:
Governance, Risk, and Compliance (GRC) management system is developed for the IT and ITES domain. The primary objective of the GRC management system is to assist companies implement Governance, Quality, and Information Security Management Systems in an integrated manner. It has numerous features, one of which is to plan and track projects and programs using standards such as CMMI, ISO 9001, ISO 27001, etc.
Let us try to understand some of the metrics associated with the Governance, Risk and Compliance (GRC) management system through this example.
|KPI / Metric||Frequency / Event||Target metric|
|Effort spent on managing compliance requirements (KPI)||Monthly||< 5% of project effort|
|% of projects using the GRC system (Metric)||Monthly||> 90%|
|% of Project Managers trained on GRC System (Metric)||Monthly||> 90%|
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