Changes in any industry immediately triggers the creation of newly abbreviated words (a Stock Keeping Unit as SKU pronounced as ɛsˌkeɪ, ju) and many of these new words evolve into acronyms (SKU pronounced as skew). As enterprise organizations have linked operations within their departmental efforts (including the IT department), numerous words, abbreviations, and acronyms are being used for reporting of business indicators and measurements. Unfortunately, some have meanings that overlap while others have entirely different meanings for the same abbreviation.
Whereas success is normally reserved for the result of achieving a company’s goals, performance is a measurable result used to specify the progress made toward achieving an objective. Similarly, a measure is a raw number or data point that is an observed value taken at a particular point in time from corporate databases or other data silos. Since measures deliver little value, a metric is a calculated measure that is normally expressed as a ratio, percentage, rate or average. As indicators, metrics can be tracked over a period of time, daily, weekly, monthly, or annually to credit the actions of a team or individual effort.
Performance and Goal Measurement
An organizational goal is an established objective that the enterprise, team, group, or individual is working toward with a voiced sense of effort and determination. Some of the common synonyms for business goals include aim, design, intent, end, object, and purpose. Facets within the enterprise define, align, and monitor goals by creating a metric-driven culture with an engaged and highly-motivated workforce. Most businesses have short term goals, long term goals, and lifetime goals. The hierarchy of business results that most enterprise organizations define are survival, sustainability, and profit.
It is important at the enterprise level to create a map of IT assets, business processes, and the governing principles that drive ongoing discussions about new strategies and the data solutions as expressed through IT. Process goals define the specific actions while performance goals are based on established standards and outcome goals are based on achievements or winning. Indicators play a major role in successfully reporting goals within specified timeframes. The enterprise architecture defines how the business will utilize technology and the indicators used for communication, analysis, feedback, and guidance to adjust for the big picture.
Key Reports Provide the Tools for Managing Critical Areas
One of the most important enterprise tasks is monitoring select measures as indicators of the most important results. This is necessary for keeping a close eye on metrics related to improving customer satisfaction and growing profitability. Discussed below are some of the key metrics that track the results of strategic decisions to the overall direction of the enterprise:
- KGI – Key Goal Indicator represents ultimate goal that the business or organization hopes to achieve. Where the terms goal and objective are often used interchangeably, a goal (or the desired outcome) is most often broken down into objectives. Generally speaking, KGI are lagging indicators whose main function is to determine if a goal has been reached. KGIs add tangible measures for tracking abstract goals (e.g. – success) expressed in numbers or percentages. Although every company’s goals will vary, most share certain objectives like improving services while reducing overall costs. For example, value-for-money benefits in IT may be measured using key indicators, such as reduction of risk, standardized processes, compliance with standards, or an increase in provision of services.
- KPI – Key Performance Indicators track specific measures to the smaller goals that an organization must achieve in order to reach an established goal. KPIs are the gauges and measurements an enterprise uses to better understand how well individuals, teams, and departmentalized units are performing against the strategic goals set a higher level. So, once an organization has established its strategic goals, KPIs are a primary tool for decision making that it used to answer questions regarding where they stand overall. In turn, KPIs must constantly be monitored and are the leading indicators of how well processes are being executed. While the KPI shows how well the process worked, the KGI shows how well results are being achieved. KPIs most important role is to quantify the evolution of effort and aid in planning the most appropriate course of action.
- KRI – Is an acronym that is used to define two very distinct types of measurement. A key result indicator (KRI) that is a metric used to measure quantitative results of an action to help the enterprise track progress and its organizational goals. So, scores in KRI are strongly dependent on some of the KPIs. A distinctly different KRI is a Key Risk Indicator that is used as an early signal of decreasing or increasing risk exposure in various areas of the enterprise. This use of KRI is a metric for measuring the likelihood that the combined probability of an event and its consequences will exceed the enterprise’s risk appetite and have a profound negative impact on reaching the organizations objectives and goals. Key Risk Indicator is often used to show whether or not immediate investigation is required to determine the nature and extent of risk.
Moving forward without keeping an eye on these key metrics means you don’t really know where you are going and what steps you need to take in order to get there. An organization can choose to measure either the results of their work or the actions that cause the results. When companies decide to track performance, they invariably begin by measuring results. But, that’s the wrong approach. Results only tell what happened, not why.
Mycelium Managed Test Services
Our services have helped our customers deliver high quality products and services, in a cost-effective and timely manner. When devising a test strategy, we consider KPIs, KGIs, and KRIs for effective management of the testing process. Our team of testing experts leverages Lean/Agile and Six Sigma expertise to enhance your continuous process improvement objectives. Our goal is to ensure customers are able to release reliable, quality software after partnering with Mycelium for software testing needs. We have extensive expertise in providing the following diverse set of testing services including test assessments, delivery management, test planning, test case creation, test script execution, defect management, and test strategy development. Working in tandem with our client resources, we tailor the implementation approach to best suits the level of automation and testing coverage per the requirement of the enterprise organization.
At Mycelium Software, we understand that automation testing is an infrastructure issue and not just a project issue. Please contact sales@myceli.com or call 1(904) 473-4959 for more information about our META automated test solutions for a detailed impact analysis with zero programming and no hidden fees.
