The benefits of Key Performance Indicators (KPI’s)

By | 22/04/2017

Key performance indicators are a method for setting out criteria for measuring performance and understanding success. When is the technique applicable They can be defined for a number of reasons:

  • To assess performance of current state
  • To determine whether future state has been achieved or whether further action required
  • To identify whether business objectives have been achieved
  • To judge the quality of the requirements gathered
  • To measure the quality of each of the solutions being considered when evaluating options
  • To enable the solution being deployed to be monitored

How to use/apply it To apply this technique the key performance indicators:

  • Need to be agreed based on what concerns / objectives need to be addressed
  • Have characteristics that are unambiguous, relevant, not expensive to collate, quantifiable and credible.
  • The method of collection and frequency must be feasible

Worked example The example provided is to identify what measures an existing website could have to be successful. Identifying the key performance indicators in this example will establish:

  • Whether the current performance state of the website is performing adequately.
  • What measures needs to be monitored to ensure it either continues to do so or is improved.
  • Can be included to improve the quality of the requirements.

Concerns:

  • Popularity – to be able to identify future increases in growth to ensure customer service and accessibility are not impacted as a result
  • Accessibility – to identify who uses it and to ensure is available when required
  • Customer service – to understand the response times in providing this service

Measures and actions Website statistics can be used to obtain the following that relate to the concerns identified above to understand the existing state:

  • Trend analysis of hits to website and how changed over time to predict future growth.
  • Comparison with original non-functional requirements and what capacity was originally planned.
  • Location of users and access times to understand the times of when needs to be accessible
  • Entrance page to understand what route is the most popular
  • Response times
  • Frequency of busy page
  • Most visited pages and percentage

Key performance indicators The following key performance indicators and requirements may then be identified for monitoring or to address new requirements if changes have been identified as a result of the existing state analysis.

Objective Measure KPI Target Requirement
Capacity Hits for future performance Estimate of hits for beginning of: 2017 – 20 000 000 2018 – 29 000 000 2019 – 36 000 000 To have the system capacity to handle volumes of hits whilst meeting the other KPI’s.
Accessibility Availability 24 x 7 Normal hours for availability are required to be 24 hours 7 days a week.
Customer service Response times <=5 seconds static page <=12 seconds dynamic page The maximum response time will be a maximum of 5 seconds for a static page and a maximum of 12 seconds for fetching a data from a database for broadband access.
Successful hits >98.34% To exceed the Gomez’s banking GPI benchmark for successful hits.
Busy views 0% The throttle should be 40 concurrent users per server and database connections and no busy views.

Thoughts? Questions? Please share in the comments.

 

If you have found this article useful then you might like my book – The Business Analysis Handbook – Techniques and Questions for better Business Outcomes.  The book is available from www.koganpage.com and all major print and e-book retailers.

Author: Helen Winter

An Management Consultant responsible for structuring programmes, success criteria, mobilisation, management of scope, budget, timely delivery, benefits realisation and stakeholder satisfaction. Helen has led on large transformation programmes to execute delivery along with strategic business outcomes. Helen is also a global business author with publisher Kogan Page where her first book “The Business Analysis Handbook” was a finalist for 2 major industry awards. One was for contribution to project management literature with PMI and the other was the Specialist book category for the business books awards. She is an active member of the APM programme management group. She is currently involved in a focus group sharing examples of good programme management practice and is an established speaker for project management forums. In her free time, she loves sharing her knowledge on her blog BusinessBullet.co.uk which is followed by over 5000 visitors a month.

2 thoughts on “The benefits of Key Performance Indicators (KPI’s)

  1. Mohammad Ali Shahlaei

    Tnx Mrs. Winter. It was useful

    Reply
    1. Helen Winter Post author

      Thanks, glad you found it useful

      Regards, Helen

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.