The New Normal in IT

CHAPTER 7Key Performance Indicators for the New Normal

Not everything that can be counted counts, and not everything that counts can be counted.

—ALBERT EINSTEIN¹

I selected this quote for a reason. Too many organizations simply measure too much. The best metrics and key performance indicators (KPIs) have (1) thresholds that indicate a range of acceptable values (e.g. green, yellow, red), and (2) are put in place to help management take specific actions in the event that KPIs are not in the desired range. Take revenue and expense per employee, one of the most common business KPIs for for-profit organizations.

KPI Defined

According to Gartner, a key performance indicator (KPI) is

A high-level measurement of system output, traffic or other usage, simplified for gathering and reviewing on a weekly, monthly, or quarterly basis. Typical examples are bandwidth availability, transactions per second and calls per user. KPIs are often combined with cost measures (e.g., cost per transaction or cost per user) to build key system operating metrics.²

This sounds a little sterile and too IT pure to me, because KPIs are frequently defined at the organizational and department levels. IT has been using KPIs for years to measure operational efficiencies and alignment with the business. Also, not all metrics qualify to be called KPIs. KPIs should be a grouping of metrics essential to meeting key business objectives. Thus, let's take Albert Einstein's quote and marry it with my expanded ...