All metrics are accompanied by targets. For the most part, these are percentages that will be ascertained via a calculation based on the entry of raw data. Some targets have the word “baseline” encoded. Baseline indicates that the metric is informational—for example, only the raw value will be displayed (i.e., aggregated by the specified period—weekly, monthly, etc.). The targets should be set to default (or 0 in the case of baselined targets). The entirety of the metrics provided is greater than the “norm” for a typical balanced scorecard, which usually has just a few key metrics per perspective. It should be noted that many of these metrics can be modified to measure systems developed using social software engineering methods. In particular, note the social software engineering metrics listed at the end of the learning and growth perspective.
FINANCIAL | |||
OBJECTIVES | MEASURES | TARGETS | KPI |
Optimize cost efficiency of purchasing | Cost to spend ratioa | <1% | F1 |
Negotiated cost savingsb | ≥20% | F2 | |
Costs avoided/total costsc | ≥10% | F3 | |
Percentage of goods and services obtained through competitive procurement practicesd | ≥19% | F4 | |
Control costs | Dollar amount under budget | Baseline | F5 |
Dollar amount over budget | Baseline | F6 | |
Budget as a percentage of revenue | ≤30% | F7 | |
Expenses per employee | ≤35,000 | F8 | |
Cost of acquired technology/technology developed in house | ≤50% | F9 | |
Percentage of new products/services where break-even point is within 1 year | 80% | F10 | |
Overtime ratiof | ≤25% | F12 | |
Cost performance indexg | ≥1 | F13 | |
Average break-even pointh | ≤1.5 years | F14 | |
Schedule performance indexi | ≥1 | F15 | |
Total cost reductions due to use of technology | ≥33% | F16 | |
Workforce reduction due to use of new products | ≥10% | F17 | |
Contractor utilizationj | ≤35% | F18 | |
Increase business value | Revenue from new products or servicesk | Baseline | F19 |
Average ROIl | ≥1 | F20 | |
Percentage of resources devoted to strategic projects | ≥55% | F21 | |
Percentage of favorable rating of project management by top management | ≥93% | F22 | |
Average cost/benefit ratio | ≥22% | F23 | |
Net present valuem | ≥1 | F24 | |
Assets per employee | Baseline | F25 | |
Revenues per employee | Baseline | F26 | |
Profits per employee | Baseline | F27 | |
Improve technology acquisition process | Total expenditures | Baseline | F28 |
Total expenditures/industry average expenditures | ≥1 | F29 | |
Amount of new technology acquired through M&A | Baseline | F30 |
a Operational costs/purchasing obligations (goods and services purchased).
b Cost savings compared with total costs.
c Costs avoided compared with total costs. You can avoid costs by reusing hardware/software, utilizing a partner, etc.
d Difference between average qualified bid and the cost of the successful bid. The sum of each calculation is aggregated into a new savings ratio for all transactions.
e Additional capital costs—software, IT support, software, and network infrastructure.
Technical support costs—hardware and software deployment, help desk staffing, system maintenance.
Administration costs—financing, procurement, vendor management, user training, asset management.
End-user operations costs—the costs incurred from downtime and in some cases, end users supporting other end users as opposed to help desk technicians supporting them.
f Overtime hours/regular hours worked.
g Ratio of earned value to actual cost. EV, often called the budgeted cost of work performed, is an estimate of the value of work actually completed. It is based on the original planned costs of a project.
h Break-even analysis. All projects have associated costs. All projects will also have associated benefits. At the outset of a project, costs will far exceed benefits. However, at some point the benefits will start outweighing the costs. This is called the break-even point. The analysis that is done to figure out when this break-even point will occur is called break-even analysis.
i SPI is the ratio of earned value to planned value and is used to determine whether or not the project is on target. (See cost performance index for a definition of earned value—EV).
j Cost of external contractors/cost of internal resources.
k Use real dollars if systems are external customer facing. Use internal budget dollars if these are internal customer-facing systems.
l Return on investment. Most organizations select projects that have a positive return on investment. The return on investment, or ROI as it is most commonly known, is the additional amount earned after costs are earned back.
The formula for ROI is
Organizations want the ROI to be positive.
m NPV is a method of calculating the expected monetary gain or loss by discounting all expected future cash inflows and outflows to the present point in time. If financial value is a key criterion, organizations should only consider projects with a positive NPV. This is because a positive NPV means that the return from the project exceeds the cost of capital— the return available by investing elsewhere. Higher NPVs are more desirable than lower NPVs. Formula for NPV:
where:
from http://www.mtholyoke.edu/~aahirsch/howvalueproject.html
n Use research from a company such as http://www.infotech.com/
CUSTOMER | |||
OBJECTIVES | MEASURES | TARGETS | KPI |
Increase customer satisfaction | Percentage of customers satisfied with system timeliness (speed) | ≥92% | C1 |
Percentage of customers satisfied with responsiveness to questions | ≥92% | C2 | |
Percentage of customers satisfied with quality | ≥92% | C3 | |
Percentage of customers satisfied with sales/customer service representatives | ≥92% | C4 | |
Length of time to resolve disputes | ≤4 hours | C5 | |
Conformance with customer requests | Percentage of baselined projects with a plan | ≥90% | C6 |
Percentage of customer requests satisfied | ≥90% | C7 | |
Increase customer base | Customer lifetime value ($) | Baseline | C8 |
Share of wallet (%)a | ≥25% | C9 | |
Retention % | ≥80% | C10 | |
Win-back percent | ≥85% | C11 | |
New acquisitions/current number of customers | ≥10% | C12 | |
Rate of defection | ≤3% | C13 | |
Enhance customer-facing systems | Avg number of searches per order/query | Baseline | C14 |
Avg number of support calls per order/query | Baseline | C15 | |
Avg elapsed time to select product and select an order | Baseline | C16 | |
Avg elapsed time to search website | Baseline | C17 | |
Number of steps required to select and purchase | Baseline | C18 | |
Avg time to answer incoming phone call | Baseline | C19 | |
Percentage of availability of customer facing applications | ≥98% | C20 | |
Avg cost to service each customer’s transaction | Baseline | C21 | |
Support internal customers | Percentage of better decisions | ≥90% | C22 |
Percentage of time reduction in making decisions | ≥90% | C23 | |
Avg time to answer a support phone call | Baseline | C24 |
a Compare with competition using service such as http://www.lexisnexis.com/marketintelligence/
INTERNAL BUSINESS PROCESSES | |||
OBJECTIVES | MEASURES | TARGETS | KPI |
Improve data quality | Forms inputted | Baseline | I1 |
Data entry error rate | ≤3% | I2 | |
Age of current data | Baseline | I3 | |
Percentage of employees who have up-to-date data | ≥98% | I4 | |
Improve balance between technical and strategic activities | Percentage of time devoted to maintenance | ≤20 | I5 |
Strategic project counts | Baseline | I6 | |
Percentage of time devoted to ad hoc activities | ≤15% | I7 | |
Increase product quality and reliability | Percentage reduction in demand for customer support | ≥25% | I8 |
Number of end-user queries handled | Baseline | I9 | |
Average time to address an end-user problem | ≤4 hours | I10 | |
Equipment downtime | ≤1% | I11 | |
Mean time to failure | ≤1000 hours | I12 | |
Percent remaining known product faults | ≤5% | I13 | |
Percentage of projects with lessons learned in database | ≥95% | I14 | |
Fault densitya | ≤3% | I15 | |
Defect densityb | ≤3% | I16 | |
Cumulative failurec | Baseline | I17 | |
Fault days numberd | ≤1 | I18 | |
Functional test coveragee | ≥95% | I19 | |
Requirements traceabilityf | ≥98% | I20 | |
Maturity indexg | ≥1 | I21 | |
Percentage of conflicting requirements | ≤5% | I22 | |
Test coverageh | ≥92% | I23 | |
Cyc lom at ic complexityi | ≤20 | I24 | |
Percentage of project time allocated to quality testing | ≥15% | I25 | |
Reduce risk | Percentage of definitional uncertainty riskj | ≤10% | I26 |
Percentage technological riskk | ≤45% | I27 | |
Percentage of developmental riskl | <10% | I28 | |
Percentage of nonalignment riskm | ≤4% | I29 | |
Percentage of service delivery riskn | ≤5% | I30 | |
Number of fraudulent transactions | ≤1% | I31 | |
Percentage of systems that have risk contingency plans | ≥95% | I32 | |
Percentage of systems that have been assessed for security breaches | ≥95% | I33 | |
Improve processes | Percentage of resources devoted to planning and review of product development activities | ≥25% | I34 |
Percentage of resources devoted to R&D | Baseline | I35 | |
Average time required to develop a new product/service | Baseline | I36 | |
Person-months of effort/project | Baseline | I37 | |
Percentage of requirements fulfilled | ≤90% | I38 | |
Pages of documentation | Baseline | I39 | |
Percentage of on-time implementations | ≥97% | I40 | |
Percentage of expected features delivered | >98% | I41 | |
Average time to provide feedback to the project team | ≤1 day | I42 | |
Project development time | ≥50% | I43 | |
Percentage of project backlog | ≤10% | I44 | |
Percentage of project cancellation rate | ≤20% | I45 | |
Support personnel to development personnel ratio | ≥35% | I56 | |
Enhance resource planning | Number of supplier relationships | Baseline | I47 |
Decision speed | <5 days | I48 | |
Paperwork reduction | ≥10% | I49 | |
Monitor change management | Number of change requests per month | Baseline | I50 |
Percentage of change to customer environment | Baseline | I51 | |
Changes released per month | Baseline | I52 | |
Enhance applications portfolio | Age distribution of projects | Baseline | I53 |
Technical performance of project portfolioo | Baseline | I54 | |
Rate of product acceptance | ≥95% | I55 |
a Faults of a specific severity/thousand.
b Total number of unique defects detected.
c Failures per period.
d Number of days that faults spend in the system from their creation to their removal.
e Number of requirements for which test cases have been completed/total number of functional requirements.
f Number of requirements met/number of original requirements.
g Number of functions in current delivery—(adds + changes + deletes)/number of functions in current delivery.
h (implementedcapabilites/requiredcapabilities)*(capabilitiestested)/totalcapabilities)* 100%.
i Cyclomatic complexity equals the number of decisions plus one. Cyclomatic complexity, also known as V(G) or the graph theoretic number, is calculated by simply counting the number of decision statements. A high cyclomatic complexity denotes a complex procedure that's hard to understand, test, and maintain. There is a relationship between cyclomatic complexity and the "risk" in a procedure.
j Low degree of project specification. Rate risk probability from 0% to 100%.
k Use of bleeding edge technology. Rate risk probability from 0% to 100%.
l Lack of development skill sets.
m Resistance of employees or end-users to change. Rate probability of risk from 0% to 100%.
n Problems with delivering system—for example, interface difficulties. Rate risk probability from 0% to 100%.
o Rate on a scale of 1 to 2 with 1 being unsatisfactory and 2 being satisfactory.
LEARNING AND GROWTH | |||
OBJECTIVES | MEASURES | TARGETS | KPI |
Create a quality workforce | Percentage of employees meeting mandatory qualification standards | ≥95% | L1 |
Percentage of voluntary separations | ≥98% | L2 | |
Percentage of leaders time devoted to mentoring | ≥45% | L3 | |
Percentage of employees with certifications | ≥54% | L4 | |
Percentage of employees with degrees | ≥75% | L5 | |
Percentage of employees with three or more years of experience | ≥75% | L6 | |
Average appraisal rating | Baseline | L7 | |
Number of employee suggestions | Baseline | L8 | |
Percentage expert in currently used technologies | ≥95% | L9 | |
Rookie ratioa | ≤10% | L10 | |
Percentage expert in emerging technologies | ≥75% | L11 | |
Proportion of support staff | ≥35% | L12 | |
Availability of strategic information | ≥100% | L13 | |
Intranet searches | Baseline | L14 | |
Average years of experience with team | Baseline | L15 | |
Average years of experience with language | Baseline | L16 | |
Average years of experience with software | Baseline | L17 | |
Percentage of employees whose performance evaluation plans are aligned with organizational goals and objectives | ≥98% | L18 | |
Percentage of conformity with HR roadmap as a basis for resource allocation | ≥95% | L19 | |
Percentage of critical positions with current competency profiles and succession plans in place | ≥98% | L20 | |
Percentage number of net meetings | ≥20% | L21 | |
Number of new templates, procedures tools to increase productivity | Baseline | L22 | |
Increase employee satisfaction | Percentage of employees satisfied with the work environment | ≥98% | L23 |
Percentage of employees satisfied with the professionalism, culture, values, and empowerment | ≥98% | L24 | |
Employee overtime | Baseline | L25 | |
Employee absenteeism | Baseline | L26 | |
Discrimination charges | Baseline | L27 | |
Employee grievances | Baseline | L28 | |
Tardiness | Baseline | L29 | |
Number of employee suggestions implemented | Baseline | L30 | |
Percentage of in-house promotions | ≥90% | L31 | |
Enhance employee training | Percentage of technical training goals met | ≥90% | L32 |
Number of training sessions attended per employee | Baseline | L33 | |
Training budget as a percentage of overall budget | ≥20% | L34 | |
Frequency of use of new skills | ≥85% | L35 | |
Enhance R&D | Research budget as a percentage of budget | ≥35% | L36 |
Number of quality improvements | Baseline | L37 | |
Number of innovative processes deployed | Baseline | L38 | |
Percentage of R&D directly in line with business strategy | ≥98% | L39 | |
Number of technologies owned or possessed by company | Baseline | L40 | |
Number of new patents generated by R&D | Baseline | L41 | |
Number of patentable innovations not yet patented | Baseline | L42 | |
Number of patents protecting the core of a specific technology or business area | Baseline | L43 | |
Number of entrepreneurs in companyb | Baseline | L44 | |
Percentage of workforce that is currently dedicated to innovation projects | ≥5% | L45 | |
Number of new products, services, and businesses launched | Baseline | L46 | |
Percentage of employees who have received training in innovation | ≥5% | L47 | |
Social software engineering | Number of wikis | Baseline | L48 |
Number of blogs | Baseline | L49 | |
Number of group workspaces | Baseline | L50 | |
Number of collaborative project plans | Baseline | L51 | |
Number of collaborative spreadsheets | Baseline | L52 | |
Number of teams using social software engineering | Baseline | L53 | |
Number of team members using social software engineering | Baseline | L54 | |
Maturity of collaboration | Baseline | L55 | |
Degree of communication efficiency | Baseline | L56 | |
Collaborative lessons learned | Baseline | L57 |