How To Define KPIs

Key performance indicators measure real-time performance and results of past activity.

Michael Biddick, CEO, Fusion PPT

February 28, 2008

1 Min Read

KPIs are critical metrics that measure actual performance against predefined goals and objectives. There are typically two types of key performance indicators. The first measures real-time performance or predicts future results. These are helpful in ensuring that critical objectives aren't missed. An example may be an IT organization that needs to have 80% of its staff working on active projects. If the system determines that next month there will be a slowdown of project activity and the utilization rate will be only 70%, this allows time to adjust staffing or add more projects.

The second type of KPI measures results of past activity. These indicators are like a report card to see how you did in a particular area. For example, if your IT organization manages critical applications such as PeopleSoft, SAP, and Exchange and you have committed to an overall application availability rate of 99%, you can set a KPI that will measure the health of these apps. This is done by monitoring health and performance and then correlating that data.

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Often you will find that other metrics are helpful in managing the IT organizations, but they may not be "key." It's helpful to group these metrics as well so you can remain focused on the issues that really affect the organization.

Illustration by Sek Leung

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About the Author(s)

Michael Biddick

CEO, Fusion PPT

As CEO of Fusion PPT, Michael Biddick is responsible for overall quality and innovation. Over the past 15 years, Michael has worked with hundreds of government and international commercial organizations, leveraging his unique blend of deep technology experience coupled with business and information management acumen to help clients reduce costs, increase transparency and speed efficient decision making while maintaining quality. Prior to joining Fusion PPT, Michael spent 10 years with a boutique-consulting firm and Booz Allen Hamilton, developing enterprise management solutions. He previously served on the academic staff of the University of Wisconsin Law School as the Director of Information Technology. Michael earned a Master's of Science from Johns Hopkins University and a dual Bachelor's degree in Political Science and History from the University of Wisconsin-Madison. Michael is also a contributing editor at InformationWeek Magazine and Network Computing Magazine and has published over 50 recent articles on Cloud Computing, Federal CIO Strategy, PMOs and Application Performance Optimization. He holds multiple vendor technical certifications and is a certified ITIL v3 Expert.

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