Most CIOs use metrics and Key Performance Indicators (KPIs) to evaluate the effectiveness of their IT teams and plans, but these measurements are not always accurate. Enterprises must avoid a few KPI mistakes at all costs that they consistently commit in order to succeed.
Metrics interpretation is essentially a game of numbers; like any game of numbers, one can win or lose.
Key Performance Indicators (KPIs) are one of those business subjects that have been covered so extensively in management and leadership circles through writing and discussion that most people assume they know about them. But like most familiar things, this familiarity can also create contempt, leading to significant mistakes when applying KPIs.
Here are three ways that KPIs and other critical business and IT measures can lead IT leaders astray.
Ignoring the value of ownership, balance, and staff involvement
Metrics offers excellent opportunities for ownership, staff involvement, continuous process control, and quality improvement. Engaging the entire team and using the analytics to enhance processes collaboratively is the key to correctly analyzing metrics.
Striking a balance between cost, quality, and service is crucial when analyzing metrics. Cost metrics, for instance, might be tracked in terms of completed tickets by person, but reworked or repeated tickets could have a negative impact on ticket quality. Response time, backlog, and uptime could then have an effect on the quality of the service. The key is hitting the ideal balance.
Failing to look past the statistics
While often instructive and important, metrics might not always be the whole picture. In reality, drawing judgments based just on a metric’s appearance might potentially be disastrously incorrect. Firms occasionally need to look farther with other, less visible measures to find out what’s really going on.
For instance, a high memory utilization level reading could indicate that a program is using too much memory. However, something entirely different could be the problem; perhaps it’s a component that’s not clearing the memory quickly enough. According to further analysis, the true bottleneck may not even be in the memory. For instance, if I/O consumption is excessive and the storage engine is unable to scrap the data to discs efficiently, memory would quickly fill up and affect system performance.
Companies must develop critical thinking skills and learn to delay jumping to conclusions that seem to be the most obvious in order to guard against false insights. Numerous things can go wrong when business processes and data systems become larger and more complicated, and determining the main reason can be challenging. The best course of action for businesses is to assemble a varied group of subject matter experts to talk with before making choices.
Disregarding the source
Knowing who established a metric and where the data came from is crucial when researching it. Results could be based, for instance, on a survey. If so, firms must find out who was polled and what positions they held within their companies. Additionally, organizations should verify that the KPIs are based on tried-and-true techniques. It’s critical to comprehend the research and data that support the measurements.
Enterprises should also think about the goal of the metric. Is it going to be a planning tool? If so, will it aid in choosing a technology, company strategy, or some other need? Metrics is just one tool for making decisions. As a result, they ought to approach metrics with caution.