Tag Archives: systems

Useful Key Performance Indicators

I’ve seen a lot of business statistic graphs over the years and many of them are useless for communicating trends.  Key Performance Indicators (KPIs) should be ubiquitous and understandable to everyone in a business.

Rules to follow

  • Absolute numbers (e.g. page views per day, widgets sold per day) tell us how a business is doing.
  • Ratios of X/unit tell us how systems are doing.
  • Ratios of Units/Profit tell us how much they cost and bridge the gap between Biz metrics and Tech metrics.
  • Simple KPIs with concrete units are easy understand. KPIs without well-understood units require too much explanation.
  • KPI plots must have the actual units specified in the legends.
  • KPI plots with the same numerator should be in the same graphic.
  • Plot Y axies should be appropriately scaled and must have a 0-origin.
  • The collection of the KPI data does not need to be exact, it must only be agreed upon.
  • KPIs must be versioned; if a KPI collection method is changed, the KPI must have a new version.

Examples

The KPIs below are relatively easy to compute and simple enough for anyone to craft given access to basic operational data.

Assume we are selling Widgets, for each Application and collectively for all Applications, sampled for each day:

Biz Metrics

  1. W = number of new widgets sold
  2. P = total money in-flow – out-flow (gross profit)
  3. WP = projected new widgets gross profit (estimated)

Applications (internal and externally facing)

  1. P = page views
  2. PE = page errors
  3. PEP = PE / P = errors / pages
  4. PT = total page time
  5. PTP = PT / P = page time / pages
  6. PW = P / W = pages / new widget sold
  7. PTW = PT / W = page time / new widgets sold
  8. PTWP = PT / WP = page time / new widgets sold gross profit

Offline Processing – Batches

  1. B = batch items
  2. BE = batch item errors
  3. BEB = BE / B = errors / items
  4. BT = total batch item time
  5. BTB = BT / B = item time / item
  6. BTP = BT / P = item time / gross profit