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A Primer On Metrics, Part Two 2

Selecting metrics that are valid and relevant to business goals is central to the success of a performance management strategy. This second installment offers a practical guide.
The metrics portfolio is a data repository that uniquely identifies all metrics and their attributes that the enterprise uses. The portfolio repository should include, but not be restricted to, the following attributes:
  • Name of the metric, which must be unique within the metric's context
  • Context, which identifies the group(s) to which the metric is applied — such as division, department, or group/work center (note that some metrics may have applications in multiple contexts)
  • Text description describing the functionality of the metric
  • Inputs, which identify processes and data, including from upstream metrics, which feed directly into the metric (that is, which are no more than once removed from the process)
  • Formulae, describing the internal processing performed by the metric
  • Output data, which identifies the data resulting from the application of the metric, as well as the immediate descendent dependencies of the metric (that is, no more than once removed)
  • Other data attributes that your organization deems necessary: for example, results required to complete Six Sigma or other management objectives.

When new metrics are proposed, you'll be able to survey the portfolio to determine if the metric already exists in the same or similar form. If it is in an identical form, you'll know that the newly proposed metric is simply another application or context and should be uniquely identified as such within the repository. Once again, ensure that the metrics retain their independence. If a proposed metric is similar to an existing one, analyze the possibility of consolidating the two variants into a single metric, which you would then apply within the different contexts. In this manner, you can avoid duplicates and close variants where possible.

Going Forward

In the next (and last) installment in this series, I will focus on metrics implementation. Where metrics have not previously been formalized, significant challenges exist. Six Sigma and other methods of improving performance are also critical factors in implementation — and will be important topics in the final part of this series.

Gary T. Smith [[email protected]] is a consultant with 25 years of experience in all areas of IT, including IT directorship, project management, and consultancy to support global enterprises working with BI, data warehousing, and Oracle database management.

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