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51. Key Performance Indicators - Pg. 108

synthesis / analysis techniqUe 51 Key Performance Indicators When you need to keep a pulse on critical success factors for your product or service, a few well-selected KPIs can keep you informed and guide you when you need to course-correct. 1 Key Performance Indicators (KPIs) are measurements of how well you are doing against quantifi- able, widely accepted business goals. KPIs measure where you were yesterday and where you are today, showing both in relationship to where you are trying to go in terms of some predefined busi- ness objective. In this way, KPIs provide relative measurements that provide stakeholders with data regarding how people are using--or not using--their products and services. Although KPIs are quantitative measures, they should be selected for one reason alone: they are fundamentally action-oriented. KPIs can help you to: 2 · recognize, prioritize, and react to issues as they occur (revenue-based fluctuations are always addressed first, usability metrics second) · meaningfully summarize and compare data and use it to your advantage · document a business case for change to senior management · foster an ongoing organizational understanding of how people are responding to your product or service It's important to remember that KPIs reflect the activities of real people. Each KPI is ultimately some 1. D. Ronald Daniel of McKinsey and Company introduced the concept of "Key Performance Indicators" and "Critical Success Factors" in the 1960s. See: Daniel, D. Ronald. "Management Information Crisis." Harvard Business Review 39, no. 5 1961. 2. Peterson, Eric. The Big Book of Key Performance Indicators, 2006, http://www.webanalyticsdemystified.com 3. See note 1 above. 4. See note 2 above. Further Reading Peterson, Eric. web Site Measurement Hacks: Tips & Tools to Help Optimize your Online