Measures of Project Management Performance and Value


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Measures of Project Management Performance and Value

  1. 1. Comprehensive List of Measures Measures of Project Management Performance and Value A BENCHMARK OF CURRENT BUSINESS PRACTICES Page 1 of 34
  2. 2. Comprehensive List of Measures Comprehensive List of Measures of PM Performance & Value Implementing a pmValue Measurement System to measure project management performance and value will help organizations achieve one or more of the following goals: • to identify the business impact of implementing project management improvement initiatives • to compare costs to benefits of project management improvement initiatives • to determine if a project management improvement initiative is accomplishing its objectives • to assist in marketing future project management improvement initiatives. Note that these goals are based on determining the value of implementing project management improvement initiatives in the organization. That value is determined by showing improvement in some measure or measures over time. Choosing those measures is key to the success of the pmValue Measurement System. PM Solutions Center for Business Practices has compiled an extensive list of possible measures for consideration. These measures are a starting point for a pmValue Scorecard development process, not a simple menu to craft a pmValue Scorecard from. So use the list as a starting point to think about measures that are most important to your organization’s goals. We recommend that you select 3-7 measures for your measurement system (it’s too difficult and costly to collect too many measures). Also note that you will be selecting measures of project management value rather than measures of project performance. The key difference in performance measures versus value measures is the reason for doing the measuring. In measuring performance, you are trying to gather information to help you make management decisions to affect change that, hopefully, will improve that performance. For example, project performance measures are undertaken to provide information to managers in order to exert control over the project. Those measures must be appropriate to the organizational level that can immediately effect change based on information it learns in order to control the performance of the project at hand (measuring the earned value of the project will provide information on the performance of the project to allow managers to make critical decisions to bring the project to closure successfully). These measures must be collected fairly often, perhaps even weekly, depending on the duration of the project. In measuring value, you are trying to demonstrate that decisions you made to implement change (project management improvement initiatives) has indeed added value to the organization. So you are measuring value rather than performance (which may or may not be the same). Sometimes (usually) improved performance can be translated into value. For example, improving schedule performance for all your projects over a period of a year can be translated into improvement in average project cycle time, which can be translated into improvement in time to market, which can add significant value to your organization. Value measures, therefore, provide information on the performance of the organization rather than the performance of a project. They must be collected over a longer period of time (no more than quarterly) and over your portfolio of projects. Page 2 of 34
  3. 3. Comprehensive List of Measures TOP 10 PROJECT MANAGEMENT BENCHMARKING MEASURES James S. Pennypacker Director-Center for Business Practices, PM Solutions There is no single set of measures that universally applies to all companies. The appropriate set of measures depends on the organization’s strategy, technology, and the particular industry and environment in which they compete. That said, below are my choices for the top 10 measures an organization should benchmark to lead to project management success. The measures should be indexed—that is, averaged over a large number of similar types of projects over a period of time (for example, per year). Return on Investment (Net Benefits/Costs) x 100 The most appropriate formula for evaluating project investment (and project management investment) is Net Benefits divided by Cost. By multiplying this result by 100, this calculation determines the percentage return for every dollar you’ve invested. The key to this metric is in placing a dollar value on each unit of data that can be collected and used to measure Net Benefits. Sources of benefits can come from a variety of measures, including contribution to profit, savings of costs, increase in quantity of output converted to a dollar value, quality improvements translated into any of the first three measures. Costs might include the costs to design and develop and/or maintain the project or project management improvement initiative, cost of resources, cost of travel and expenses, cost to train, overhead costs, etc. Productivity Productivity is output produced per unit of input. Productivity measures tell you whether you’re getting your money’s worth from your people and other inputs to the organization. Typically the resources have to do with people, but not always. A straightforward way to normalize productivity measurement across organizations is to use revenue per employee as the key metric. Dividing revenue per employee by the average fully burdened salary per employee yields a ratio. This ratio is the average-per-employee “Productivity Ratio” for the organization as a whole. Other productivity metrics might be number of projects completed per employee, number of lines of code produced per employee. The key to selecting the right productivity measures is to ask whether the output being measured (the top half of the productivity ratio) is of value to your organization’s customers. Cost of Quality Cost of Quality/Actual Cost Cost of quality is the amount of money a business loses because its product or service was not done right in the first place. It includes total labor, materials, and overhead costs attributed to imperfections in the processes that deliver products or services that don’t meet specifications or expectations. These costs would include inspection, rework, duplicate work, scrapping rejects, replacements and refunds, complaints, loss of customers, and damage to reputation. Cost Performance Earned Value/Actual Cost The Cost Performance Index is a measure of cost efficiency. It’s determined by dividing the value of the work actually performed (the earned value) by the actual costs that it took to accomplish the earned value. The ability to accurately forecast cost performance allows organizations to confidently allocate capital, reducing financial risk, possibly reducing the cost of capital. CPI Standard Deviation is an even better metric, one that shows the accuracy of budget estimating. Schedule Performance Earned Value/Planned Value Page 3 of 34
  4. 4. Comprehensive List of Measures The Schedule Performance Index is the ratio of total original authorized duration versus total final project duration. The ability to accurately forecast schedule helps meet time-to-market windows. SPI Standard Deviation is an even better metric that shows the accuracy of schedule estimating. Customer Satisfaction Scale of 1-100 Customer satisfaction means that customer expectations are met. This requires a combination of conformance to requirements (the project must produce what it said it would produce) and fitness for use (the product or service produced must satisfy real needs). The Customer Satisfaction Index is an index comprising hard measures of customer buying/use behavior and soft measures of customer opinions or feelings. Index is weighted based on how important each value is in determining customer overall customer satisfaction and buying/use behavior. Includes measures such as repeat and lost customers (30%), revenue from existing customers (15%), market share (15%), customer satisfaction survey results (20%), complaints/returns (10%), and project-specific surveys (10%). Cycle Time There are two types of cycle time—project cycle and process cycle. The project life cycle defines the beginning and the end of a project. Cycle time is the time it takes to complete the project life-cycle. Cycle- time measures are based on standard performance. That is, cycle times for similar types of projects can be benchmarked to determine a Standard Project Life-Cycle Time. Measuring cycle times can also mean measuring the length of time to complete any of the processes that comprise the project life-cycle. The shorter the cycle times, the faster the investment is returned to the organization. The shorter the combined cycle time of all projects, the more projects the organization can complete. Requirements Performance Meeting requirements is one of the key success factors for project management. To measure this factor you need to develop measures of fit, which means the solution completely satisfies the requirement. A requirements performance index can measure the degree to which project results meet requirements. Types of requirements that might be measured include functional requirements (something the product must do or an action it must take), non-functional requirements (a quality the product must have, such as usability, performance, etc.). Fit criteria are usually derived some time after the requirement description is first written. You derive the fit criterion by closely examining the requirement and determining what quantification best expresses the user’s intention for the requirement. Employee Satisfaction An employee satisfaction index will give you one number to look at to determine employee morale levels. The ESI comprises a mix of soft and hard measures that are each assigned a weight based on their importance as a predictor of employee satisfaction levels. The ESI should include the following (percentage represents weight): climate survey results (rating pay, growth opportunities, job stress levels, overall climate, extent to which executives practice organizational values, benefits, workload, supervisor competence, openness of communication, physical environment/ergonomics, trust) (35%), focus groups (to gather in- depth information on the survey items) (10%), rate of complaints/grievances (10%), stress index (20%), voluntary turnover rate (15%), absenteeism rate (5%), and rate of transfer requests (5%). Alignment to Strategic Business Goals Most project management metrics benchmark the efficiency of project management—doing projects right. You also need a metric to determine whether or not you’re working on the right projects. Measuring the alignment of projects to strategic business goals is such a metric. It’s determined through a survey of an appropriate mix of project management professionals, business unit managers, and executives. Use a Likert scale from 1-10 to rate the statement: Projects are aligned with the business’s strategic objectives. Page 4 of 34
  5. 5. Comprehensive List of Measures MEASURES TO DETERMINE THE VALUE OF PROJECT MANAGEMENT Source: Center for Business Practices, Value of Project Management Research Report, 2000. Financial Measures - Project Schedule Performance - Return on Investment - Requirements Performance - Return on Capital Employed - Process Errors - Economic Value-Added - Defects - Sales Growth % - Rework - Sales Growth $ - Resource Utilization - Productivity - Time to Market - Cost Savings - Scope Changes - Earnings Per Share - Project Completions - Cash Flow Per Share - Business Strategy - Project Risk Customer Measures - Customer Satisfaction Learning and Growth Measures - Customer Retention - Employee Satisfaction - Customer Acquisition - Employee Turnover - Customer Profitability - Training Time - Market Share - Employee Productivity - Customer Use - Employee Motivation - Employee Empowerment Project/Process Measures - Information System Availability - Project Budget Performance MEASURES TO DETERMINE THE VALUE OF PROJECT MANAGEMENT IN IT ORGANIZATIONS Source: Center for Business Practices, Value of Project Management in IT Organizations Research Report, 2000. - Return on investment - Component size - Time to market - Defect per peer review - Customer satisfaction - Staff productivity - Alignment to strategic business goals - Response time - Time and budget to date - Average time to repair defect - Quality - Schedule estimating - Labor hours performance - Cost/hours estimating - Schedule performance - Defect rate estimating - Cost performance - Component size estimating - Defect rate - Quality estimating Page 5 of 34
  6. 6. Comprehensive List of Measures DISTRIBUTED PROJECT MANAGEMENT MEASURES Source: Financial To ensure projects are executed in accordance with specified goals of cost, schedule and performance - Earned value - Quality of product delivered (meeting specifications) Project and Internal Processes To maintain sound internal processes that enable efficient and effective execution of projects - Consistency in estimating and risk definition - Quality of planning and progress tracking - Efficiency of project change management Innovation and Learning To use projects as a capability-building process and developing expertise - Quality of project portfolio - Progression on maturity models - Motivation of teams Customer To ensure that the organization delivers full satisfaction to customers during project execution - Responsiveness in terms of after-delivery service - Level of mutual trust Page 6 of 34
  7. 7. Comprehensive List of Measures PROJECT MANAGEMENT METRICS Source: PM Solutions Internal Document Inputs - What is the approximate number of current projects? - On average, how many "full time equivelants" are assigned to a project? - What is the average length of a typical project? - What is the average fully burdened cost of a resource (person)? - Approximately how many people are available to work projects? - What % of projects meet customer expectations (quality)? - What % of projects are delivered on-time? - What % of projects receive adequate resources (quality & quantity)? - What % of your projects directly drive new/increase revenue? - What is the average monthly revenue stream of these projects? - How frequently does the introduction of new development projects interfere with existing production processes? - What is the average dollar impact of these interuptions? - Do you know of any situations where a project has been undertaken that repeats functionality in another project? Summary Project Statistics - Average Project Resource Cost - Average Annual Project Expenditures - Anticipated annual successful projects - Anticipated annual on-time projects - Capacity Based on Current Workload - Capacity Based on Staffing - Average number of challenged projects Analysis Category Cost Reduction - Early termination of problem projects - Productivity gain through improved resource allocation Cost Avoidance - No functionality repeats across projects Revenue Increase - Time to market reduction - Increase in Project Turnover, resulting in additional revenue generating projects Revenue Protection - Improved structure/process lessening impact to production systems generating revenue Page 7 of 34
  8. 8. Comprehensive List of Measures ORGANIZATIONAL METRICS CATEGORIES Source: Parviz Rad and Ginger Levin, Metrics for Project Management, Management Concepts, 2006. Examples of Performance Metrics - Completeness of requirements - Accuracy of the cost estimate - Extent of rework - Number of key milestones completed - Number of key milestones missed - Use of the Work Breakdown structure to develop project plans - Use of the team charter to manage conflicts - Resource utilization versus the plan - Expected results and actual results in testing - Effectiveness of risk response strategies in mitigating risks - Vendor progress in meeting schedule, cost, and performance - Extent of requests for information outside of regular communications Examples of Stability Metrics - Effectiveness of scope, schedule, and cost-tracking processes - Value of cost tools and techniques in managing projects - Value of scheduling tools and techniques in managing projects - Effectiveness of contract change management system - Revisions to subsidiary plans of the overall Project Management Plan in procurement management, cost management, quality management, schedule management, scope management Examples of Compliance Metrics - Product conformance with requirements - Effort required to use the standard project management information system - Timeliness of project information - Customer acceptance of product deliverables - Extent of tools and templates available to the team - Extent of changes to the cost baseline - Number of workarounds required - Number of conflicts requiring escalation outside the project team - Applicability of the methodology for the range of projects under way by the organization Examples of Capability Metrics - Use of knowledge, skills, and competency profiles - Participation in project management career path - Participation in mentoring programs - Extent of improvement of project predictability - Extent to which each team member is an active participant on the team - Success of projects undertaken by the team - Status of the team’s best practices in project management - Use of models for schedule, cost, and performance - Capability and ease of use of the team’s integrated systems Examples of Improvement Metrics - Involvement of individual team members in performance improvement initiatives - Effect of technology in terms of performance improvement - Optimization of the motivations and viewpoints of the client and the project team - Benchmarking data within the industry and even outside of the industry Page 8 of 34
  9. 9. Comprehensive List of Measures MEASURES TO DETERMINE PROJECT MANAGEMENT ROI Source: Phillips, J. The Project Management Scorecard, 2002. Hard Data - Accident costs - Program costs Output - Sales expense - Units produced - Administrative costs - Tons manufactured - Average cost reduction - Items assembled - Items sold Quality - Sales - Scrap - Forms processed - Waste - Loans approved - Rejects - Inventory turnover - Error rates - Patients visited - Rework - Applications processed - Shortages - Students graduated - Product defects - Tasks completed - Deviation from standard - Productivity - Product failures - Work backlog - Inventory adjustments - Incentive bonus - Percentage of tasks completed properly - Shipments - Number of accidents - New accounts generated - Customer complaints Time - Cycle time Soft Data - Response time for complaint - Equipment downtime Work habits - Overtime - Absenteeism - Average delay time - Tardiness - Time to project completion - Visits to the dispensary - Processing time - First-aid treatments - Supervisory time - Violations of safety rules - Training time - Number of communication breakdowns - Meeting time - Excessive breaks - Repair time - Efficiency (time-based) Work climate/satisfaction - Work stoppages - Number of grievances - Order response time - Number of discrimination charges - Late reporting - Employee complaints - Lost time days - Litigation - Job satisfaction Costs - Organizational commitment - Budget variances - Employee turnover - Unit costs - Cost by account Employee development - Variable costs - Number of promotions - Fixed costs - Number of pay increases - Overhead costs - Number of training programs attended - Operating costs - Requests for transfer - Delay costs - Performance appraisal ratings - Penalties/fines - Increases in job effectiveness - Project cost savings Page 9 of 34
  10. 10. Comprehensive List of Measures Customer service - Organizational commitment - Customer complaints - Work climate - Customer satisfaction - Employee complaints - Customer dissatisfaction - Employee grievances - Customer impressions - Employee stress reduction - Customer loyalty - Employee absenteeism - Customer retention - Employee turnover/retention - Customer value - Innovation - Lost customers - Request for transfers - Customer satisfaction/dissatisfaction Initiative/innovation - Community image - Implementation of new ideas - Investor image - Successful completion of projects - Customer complaints - Number of suggestions implemented - Customer response time - Setting goals and objectives - Customer loyalty - New products and services developed - Teamwork - New patents and copyrights - Cooperation - Conflict Intangible variables - Decisiveness - Knowledge base - Communication - Job satisfaction Page 10 of 34
  11. 11. Comprehensive List of Measures PROJECT PERFORMANCE Source: Stratton, Forecasting Project Performance with Metrics METRICS TYPES Productivity - Cost performance index--efficiency in use Resource of funds - Cost/budget - To complete CPI--efficiency needed to - Resource utilization: staff planned, meet budget at project end experience levels, laboratories, - Trends in cost, schedule, and efficiency manufacturing Completion Activity Progress - Quality gate task status-- - Development progress planned/completed efforts this month - Test progress - Quality gates passed--actual and planned - Incremental capabilities/technical passing of quality checks since project performance start - Milestone completion - Rate charts Change - Productivity - Percent change to product baseline per month--measures evolving product Technical baseline and stability - Design stability - Requirements stability Staff - Design structure/complexity - Percent voluntary staff turnover--impact - Error margins to team - Performance margins - Percent overtime--stress and burnout Quality Risk - Defects - Risk impact and reduction--risks faced, - Rework resolved, reduced - Defect removal rate - Risk liability--remaining risk reserve, time and funds METRICS FOR DASHBOARD - Anonymous warning--that uneasy feeling or rumor Progress - Total earned value--real accomplishment Quality - Elapsed time--time spent - Defects by activity--quality of - Actual cost--funds spend workmanship MANAGEMENT OF ORGANIZATIONS BY PROJECTS Source: White & Patton, Metrics and CSFS for Your MOBP Process - Number of project completions per year - Percentage of cost, schedule, and performance deliveries per year (performance = scope & quality) - Number of authorized changes to CSP during implementation phase (per project) - Number of cancellations by phase - Project manager turnover - Team turnover within phase - Number of active projects (taken monthly) - Number of on-hold projects (taken monthly) - Number of process exceptions per month (bypass process) - Number of process changes per year (as approved by PST) Page 11 of 34
  12. 12. Comprehensive List of Measures ORGANIZATIONAL SUCCESS DIMENSIONS Source: Martz, A.C., Shenhar, A.J., & Marino, D.N. (2000). Defining & Measuring Organizational Success, Stevens Institute of Technology Financial - Quality of cross-learning bet. product - Sales teams - Profit margin - Quality of Re-engineering processes - Revenue growth - Cash flow People Development - Net operating income - Retention of top employees - Return on Investment (ROI) - Quality of professional/ technical - Revenue per employee development - Profit per employee - Quality of leadership development - Stock price / market capitalization - Encourage employees to suggest/test - Economic Value added (EVA) new ideas - Earnings per share (EPS) - Employee skills training (days per year) - Return on Common Equity (ROE) - Employee satisfaction survey - 5 year growth in common equity - Quality of corporate culture development - Quality of HR benefit plans (e.g., pension, Customer/Market medical) - Customer Satisfaction Index - Concern for quality of employee and - Customer retention rate family life (e.g., day care, company health - Service quality club) - Responsiveness (customer defined) - Articulated and supportive HR policy - Customer benefits from product/service - Quality of HR administrative processes - Market Share or Position - On-time delivery (customer defined) Future - Customer acquisition rate - Depth and quality of strategic planning - Growth in Market Share - Anticipating/preparing for unexpected - Corporate image changes in the external environment - Sales backlog - Extent of joint ventures and strategic alliances to gain competitiveness in new Process technologies - Time to market for new products and - Investment in new market development services - Investment in new technology - Quality of new product development and development project management processes - % sales from new products (<5 years old) - Quantity and depth of standardized - Understanding/forecasting processes MEGATRENDS - Quality of manufacturing processes - Quality and extent of strategic focus / - Quality initiative processes (TQM) intent - Cycle time - Investment in R&D (% of sales) - Quality and speed of translating new - % sales from new business lines (<5 product development to manufacturing years old) - Quality of cross-learning within product - High levels of technology forecasting teams - % of our products that have potential to - Quality of cross-learning between change basis of competition business units - Investments in high risk projects Page 12 of 34
  13. 13. Comprehensive List of Measures OPERATING PARAMETERS AND METRICS FOR BUSINESS TRANSFORMATIONS Source: Bavidson (1993) Productivity Business Precision - Units Per Person - Cost of Variety - Peak Output Level - Number of New Products - Cost Per Unit - Number of Product, Service, and Delivery - Cost Per Activity Configurations - Revenue Per Employee - Customer Self-Design and Self-Pricing - Headcount Flexibility Quality Enhancement - Defect Rates - Number of Features, Functions, and - Yields Services - Standards and Tolerances - Information Flow to Customer - Variance - Product and Service Revenue Ratio - Life Cycle Costs - Customer Performance (Industrial) - Secondary Revenue Streams Velocity - Inventory and Sales Extension - Throughput - Customer Diversity - Cycle Times - Number of New Customers - Time To Market - Channel Diversity - Response Ratios - New Revenue Sources - Broader Product and Market Scope Customer Service - Retention Business Redefinition - Revenue Per Customer - Market Value - Repeat Purchase - New Lines of Business - Brand Loyalty Percent of Revenue from New Units and - Customer Acquisition Cost Service - Referral Rate Page 13 of 34
  14. 14. Comprehensive List of Measures SAMPLE PRODUCT DEVELOPMENT/ENGINEERING PERFORMANCE MEASURES Source: U.S Department of Energy, Performance Measures - Percent of drafting errors per print - Percent of prints released on schedule - Percent of errors in cost estimates - Number of times a print is changed - Number of off-specifications approved - Simulation accuracy - Accuracy of advance materials list - How well the product meets customer expectations - Field performance of product - Percent of error-free designs - Percent of errors found during design review - Percent of repeat problems corrected - Time to correct a problem - Time required to make an engineering change - Percent of reports with errors in them - Data recording errors per month - Percent of evaluations that meet engineering objectives - Percent of special quotations that are successful - Percent of test plans that are changed (change/test plan) - Number of meetings held per quarter where quality and defect prevention were the main subject - Person-months per released print - Percent of total problems found by diagnostics as released - Number of problems that were also encountered in previous products - Cycle time to correct customer problem - Number of errors in publications reported from the plan and field - Number of products that pass independent evaluation error-free - Number of misused shipments of prototypes - Number of unsuccessful pre-analyses - Number of off-specifications accepted - Percent of requests for engineering - Number of days late to pre-analysis - Percent of requests for engineering action open for more than two weeks - Effectiveness of regression tests - Number of restarts of evaluations and tests - Percent of corrective action schedules missed - Number of days for the release cycle - Cost of input errors to the computer - Percent of bills of material that are released in error - Spare parts cost after warranty - Customer cost per life of output delivered Page 14 of 34
  15. 15. Comprehensive List of Measures PROCESS CLASSIFICATION FRAMEWORK Source: American Productivity and Quality Center Customer - R&D time or cost variance - % products that equal 80 - Amount of time between vs. budget % sales initial purchase and - Ratio of R&D to capital - Ratio of expected value to customer survey equipment realized value - Cost per survey - Sales due to new products - Current customer Time based metrics released in previous 3 satisfaction level - Cycle times by major years (dollars) - Frequency of surveys development step - Sales due to new products - Frequency of customer - Development time (actual released in previous 3 feedback distribution to forecast) years (%) - Headcount required to - NPV, ROI, break even time - Sales due to new products conduct the survey - Time customer(s) involved released in prior year - Headcount required to in project (dollars) analyze the survey - Time for market testing - Sales due to new products - Hours of training of survey - Time from development to released in prior year (%) staff maturity - Improvement in customer - Time from introduction to NPD Cost satisfaction maturity - New product sales dollar - # people directly - Time to determine as a % total sales % supporting the customer patentability projects within or under satisfaction management - Time to develop a product budget Product process specification development spending by - # places data is collected - Time to make conceptual phase and consolidated mock ups - # questions asked - Time to market NPD Engineering - # surveys conducted - Time to perform a business - Cost of engineering - Sample size environment assessment changes per month - Survey return rate - Time to prepare a business - Engineering reject rate: - Time required to conduct a plan rej/eng design hours survey - Time to profitability - # engineering change - Time to release orders (EOC) Business Strategy engineering drawings - # EOC/# drawings - # full time corporate - Time to set up pilot - # drawing errors planners production - # hours of technical - # iterations of strategic - Time to verify design training plan - # off specs approved - % error in planning R&D staffing - # product specification estimates - Marketing/engineering staff changes - Strategic planning - Manufacturing engineers/ - # schedule slippages operating budget development engineers - # times a print is changed - % R&D staff with plant - % drafting errors per print New Product Development experience - % error free design NPV of research - Purchasing/ engineering - % errors in cost estimates - # ideas staff - % prints released on - # formal reviews before - Man years per project schedule plans are approved - New product performance - Simulation accuracy - % research linked to - Incremental profit from new - Standard parts in new business unit or corporate products releases/total parts in new strategic planning - New product success rate release - R&D as a % sales - # products first to market Page 15 of 34
  16. 16. Comprehensive List of Measures - Time required to make an - Turnover of sales force - % active suppliers engineering change - Utilization of salesperson receiving 90 % total time (% spent on selling, purchasing dollars NPD Patents administration, travel, - % time single sourcing - # inventions submitted waiting) practiced - # patents challenged - % reduction in the # (won/lost) Order Processing suppliers - # patents in use - Cost per order - % defective parts - Ratio of patents in use to - Customer order entry time - % EDI order placements total # patents - # days to approve - % output delivered on customer credit schedule Marketing-Sales - # days to process - % target dates missed Marketing customer orders - % parts with two or more - Advertising copy errors - Order accuracy: # orders suppliers - Customer retention rate with errors/total # invoices - % supplier on time delivery - Inquiries per $10,000 of - Order management cost - % time bar coded receipts advertisement - Orders per hour are utilized - Market share - Order to receipt cycle time - % transactions made using - Marketing expenses to - % orders with standard procurement cards sales lead time - Purchase order cycle time - % error in market forecasts - Order processing time to - Purchase order errors vs. - % market gained production release purchase orders audited - % proposals accepted - % products made to order - Purchasing dollars handled - % proposals submitted vs. standard product or by purchasing per ahead of schedule service purchasing employee - Purchasing Headcount as Sales Product Order-Delivery a % total company - Customer satisfaction - Active suppliers per headcount rating of sales force purchasing employee - Purchasing operating - Direct mail response rate - Average purchased expense as a % goods and - Frequency of customer materials cost compared to services purchased contact by customer budgeted cost - Purchasing operating service - Average time to fill expense as a % sales - New customer sale cycle emergency orders dollars time - Cost per purchase order - Purchasing operating - # calls to close a sale - Dollars handled by expense as a % total - # new customers acquired purchasing purchase dollars annually - Errors per purchase order - Sales dollars per - # sales meetings per year - Material acquisition cost purchasing employee - # salespeople - # orders received with no - Supplier lots rejected - % repeat orders purchase order - Time between firm order - % change in sales - # purchase orders issued and actual delivery - % error in sales forecasts past due - Total company purchasing - Sales call per day by - # times per year line is dollars per purchasing salesperson stopped due to lack of employee - Sales revenue per supplier parts - Total purchasing dollars as employee - Orders or line items a % sales dollars - Salesperson - to customer handled per purchasing ratio staff person or buyer Output - Salesperson time spent in - % change in # active - Actual versus planned training (days) suppliers during the volume - Travel dollars/cost of sales reporting period dollars Page 16 of 34
  17. 17. Comprehensive List of Measures - Average machine - Productivity: units per labor - Replacement costs for availability rate or machine hour material handling and uptime - Reject rate reduction storage - Capacity utilization - Rework and repair hours - Total person hours worked - Customer reject or return compared to direct per year rate on finished products manufacturing hours - Warehouse inventory (ppm) - Rework and repair labor (dollar value) as a % sales - Defective units (ppm) cost compared to total dollars - Finished product first pass manufacturing labor cost - Warehouse inventory yield - Scrap and rework costs (dollar value) as a % total - Hours lost due to - Scrap and rework % purchase dollars equipment downtime reduction - Major component first pass - Scrap material dollar Delivery yield value/total material dollar - Complaints of shipping - Manufacturing cycle time value damage for a typical product - Standard order to shipment - Distribution costs - # items exceeding shelf life lead time for major (transportation, - # line stops products warehousing, customer - # fine supervisors - Supplier parts scrapped service, administration, - # process changes per due to engineering inventory carrying) operation due to errors changes - Fill rate (speed of delivery) - # processes with yields at - Time line is down due to - Freight costs per parts six sigma assembly shortage shipment - % assembly steps - Time required to - Frequency of delivery to automated incorporate engineering customers - % increase in output per changes - # bill of lading errors not employee - Total scrap and rework as caught in shipping - % "pull" system used a % sales - % incomplete delivery - % reduction in component - Warranty cost reduction - % misdelivery lot sizes - Warranty repair costs/sales - % late shipments - % error in yield projections - Yield improvement - % shipping errors - % changes to process - Units produced per square - % on time delivery specifications during foot or meter of (promised) process design review manufacturing and storage - % on time delivery - % designed experiments space (requested) needing revisions - Ratio of actual deliveries to - % errors in stocking Warehousing scheduled deliveries - % lots or jobs expedited by - Annual lines shipped per - Transportation cost per bumping other lots or jobs SKU unit from schedule - Cases per hour - % production workforce - Dock to stock cycle time Inventory Management now participating in self - Inventory accuracy - Annual inventory turns directed work teams - Items on hand - Annual work in process - % tools reworked due to - Lines shipped per person (WIP) turns design errors hour - Back orders Cost of stores - % tools that fail certification - PaIlets shipped per person - Gross inventory as a % - % reduction in hour sales dollars Inventory manufacturing cycle time - % error in cases shipped carrying cost - % unplanned overtime - % error in lines shipped - Inventory reliability: line - Production and test - % error in orders shipped items filled on first try per equipment set up time - Picking error rate total line items ordered - Production schedules met - Integrated supply contract (% time) - Inventory expenses Page 17 of 34
  18. 18. Comprehensive List of Measures - Item usage - Maintenance - % calls closed incomplete - Line items processed per cost/equipment cost or extended due to lack of employee/hour - Maintenance cost/output parts - On time delivery unit - % calls that are - Pilferage reduction - # unscheduled abandoned, delayed, or - Reduced freight expenses maintenance calls answered by recording - Stock turns per year - Production time lost - % orders received by - Vendor lead time because of maintenance customer service problems department Quality Assurance - % equipment maintained - % service calls requiring - # audits performed on on schedule parts schedule - Waste caused by machine - % total calls fixed remotely - # complaints from problems by phone manufacturing - Ratio of field engineers to management Customer Service support staff - # customer complaints - Billing errors per customer - Returned product repair - # engineering changes billing time after design review - Billing errors per day of - Revenue per service - # errors detected during week or month engineer design and process - Invoicing errors per reviews invoices processed Human Resource Management - # manufacturing - Labor cost per invoice Personnel Deployment interruptions caused by - Length of time to prepare - % employee absenteeism supplier parts and send a bill - Cost per external hire - # requests for corrective - # invoices issued - Cost per internal I Lire action being processed - # invoices per FIE - Cost to supervise - % error in reliability - % invoices disputed - Current employee/ projections - Average # calls customer supervisor ratio - % lots going directly to service representatives - External accession rate stock handle per week - External replacement rate - % product that meets - Average time to answer a - Internal accession rate customer expectations customer letter - Internal replacement rate - % quality assurance - Average time to resolve a - Job posting effectiveness personnel to total customer inquiry - Job posting response rate personnel - Call repair time - # days to fill an - % quality engineers to - Call travel time to site employment request product and manufacturing - Customer call waiting time - # days to respond to engineers - Duration of typical applicant - Receiving inspection cycle customer service phone - # job descriptions written time call - # jobs leveled - Time required to process a - Duration of typical - Orientation and training request for corrective technical service phone costs per hire action call - % employment requests - Time to answer customer - Efficiency of field force filled on schedule complaints (direct service time - % offers accepted - Time to correct a problem compared to total service - Personnel turnover rate - Variations between time available) - Relocation expenses inspectors doing the same - # customer service - Requisitions filled per job employees as a % total month/quarter/year employees - Requisitions per recruiter Maintenance - # FTEs in customer service - Time to evaluate jobs - Labor hours spent on - # part time employees in - Time to process an preventive maintenance customer service applicant Page 18 of 34
  19. 19. Comprehensive List of Measures - Time to start - # days to develop a - Benefits costs/total training course or modules compensation costs Succession-career plan - # hours per year of career - Benefits to payroll ratio development and skill development - Error rates in processing - Distribution of performance training per employee benefits claims appraisal ratings - % employees trained - Retiree benefits - Distribution of merit pay - % employees with costs/expense increase recommendations development plans - Ratio of promotions to total - % training classes Workplace health-safety employees evaluated as excellent management - Ratio of openings filled - % employees receiving - Accidents per month internally vs. externally tuition refunds - Lost time for injuries per - Average # years or months - Total expenditure for tuition total hours worked between promotions reimbursement or - # grievances per month executive development - % departments with Employee recruitment & hiring - Total external training disaster recovery plans - Average days to fill open expenditures - Safety violations by positions - Total internal training days department - Average days between - Total internal training - Workers' compensation opening and fill expenditures costs/expense - Ratio - acceptances to - Trainee or unit work - Workers' compensation hires performance changes costs/headcount - Ratio - acceptances to - Training costs as a % - Days without incident offers payroll - Hours worked per lost time - Ratio - qualified applicants - Training costs as a % incident to total applicants sales/revenue - Housekeeping audits - Training days per - Insurance loss ratios Employee involvement employee per year - Lost time severity rates - Current employee/ - Training department - OSHA Fines supervisor ratio employees to total - OSHA Recordables/ - Employees involved in job employees severity rate rotation - Safety meetings held - # days to answer Compensation management - Total case incident rate suggestions - Average salary cost per - Training documentation - # suggestions per employee employee - Compensation costs Workforce diversity - # suggestions per team - Compensation - Minority representation by - % employees participating costs/revenue EEO categories in company sponsored - Overtime pay costs - Minority turnover rates activities - % performance appraisals overall, by department, by - % suggestions accepted submitted on time job familyv - % total workforce now - Salary range exceptions - Promotion rates of participating in self directed - Supervisory compensation individuals from protected work teams costs/total compensation classes costs - Ratio of EEO Employee development & grievances/suits to total training Employee satisfaction employee population - Average pre- and post- - Department morale index - Rejection rate by job training test score category of applicants from change/performance Employee benefit management protected classes review change - Benefits cost per employee - Cost per trainee - Benefits cost - Hours of employee training - Benefits costs/revenue Page 19 of 34
  20. 20. Comprehensive List of Measures Labor-management - # operating system failures - General relationships per unit of time - IS budget - Average employee tenure - # production jobs not - IS budget as % revenue - Average length if time to completed during batch - IS employees as a % total settle grievances night shift employees - Costs associated with work - # revisions to program - % IS budget for client stoppages/slowdowns objectives server - Frequency/duration of work - % error in lines of code - % IS services outsourced stoppages/slowdowns required - % grievances settles out- - % time required to debug Financial Resource Management of-court and associated programs - Asset composition savings - Rework costs resulting - Average collected balance - Ratio of grievances/ from computer program per billion dollars of complaints to total - System/server availability revenue employees - # incident reports received - Bank accounts per FIE - Ratio of successful to - # incident reports resolved - Capital structure unsuccessful union drives - Data Centers - Cash reinvestment ratio - Ratio of voluntary to - Cost per MIPS used - Cash to current liabilities involuntary terminations - Cost to mount a tape - Current ratio: current - Cost to print a page assets/current liabilities Information resource - Cost to store a gigabyte of - Debt service coverage management DASD for one month ratio - Application availability - CPU non prime shift usage - Dividend as % sales - Average application % - Dividend yield response time - CPU prime shift usage % - Economic value added - Average duration of - CPU usage overall % - Foreign exchange trades scheduled outages - DASD usage: allocated per FIE - Average duration of DASD % - Free cash flow unscheduled outages - Data integrity - Funds flow adequacy ratio - Average # monthly - Optimally blocked files % - Gross margin as a % sales scheduled outages - % DASD used - Interest expense as % - Average # monthly - % multiple tape files average total debt unscheduled outages - % production job failures - Internal fund of capital - Average resolution time of - Print operators per expenditures incident reports received 100,000 pages - Net earnings per employee - Errors per thousand lines - Print usage: production - Net operating profit as % of code volume % capital employed - Mean time between server - Schedulers per 10,000 - # variances in capital failures production jobs spending - Mean time between - Set up staff per 10,000 - % variation from budget system repairs production jobs - Pre tax earnings as % - Network availability and - Small tape files % sales bandwidth - Spending on personnel per - Quick ratio: cash + - # application crashes per MIPS accounts receivable unit of time - Spending on software per /current liabilities - # changes after the MIPS - Return on sales program is coded - Tape operators per 10,000 - Return on total assets - # documentation errors mounts - Return on total capital - # hours spent to maintain - Tape usage: specific employed application support mounts % - Return on total invested - # middleware failures per - Total annual spending per capital unit of time MIPS - Revenue: actual versus - Total staff per MIPS plan Page 20 of 34
  21. 21. Comprehensive List of Measures - Sales to inventory - Voucher processing error - Cost per account requiring - Sales to net working rate credit activity capital Payroll processing - Cost per account requiring - Selling, general, and - Annual # paychecks collections activity administrative expenses as processed per FIE - Credit & collections days a % sales - Average time to resolve outstanding - Total assets to sales errors - Days sales outstanding - Total debt as % total - Direct deposit % - Dollars on credit hold capital employed - # paychecks per FTE - Invoicing errors - Total operating costs as a - # payroll locations - Labor cost per remittance % sales - Payroll labor cost per - # active customer accounts - Trades per FTE paycheck per credit and collection - Weighted average cost of - Payroll personnel per $100 employee capital million in revenue - # remittances per FTE - Payroll processing method - % customers requiring Accounts payable by # employees paid credit activity management - Payroll processing time - % customer requiring - A/P labor cost per payment - Payroll systems cost per collections activity - A/P labor cost per vendor paycheck - % collections customers invoice - % errors in payroll referred to OCAs - A/P late payments - % manually processed - % EDI utilization - A/P penalties checks - % remittances that are a - A/P systems cost per - Span of control: payroll first time match payment staff to management ratio - % remittances with errors - Accounts payable to sales - Time card/data preparation - % remittances received on - Annual # invoices error rate or before the due date processed per FIE - Total payroll cost as a % - % same day credit to - Average # invoices per revenue customer account check - Total payroll cost per - % write offs to total - Avg # vendors per product paycheck receivables - Avg time to resolve errors - Total accounts receivable - Entry errors in accounts Accounts receivable, credit, as a % revenue payable and general ledger and collections processing - Total accounts receivable - Incoming voucher error - Accounts receivable staff cost per FTE rate per $1 million in revenues - Total remittance - # A/P locations - Accounts receivable processing cost per - # A/P personnel per $100 turnover remittance processed million in disbursements - Annual check turnover per - % errors in checks cash applicator Closing the books - % manually processed - Annual operating cost per - Annual # journal entries checks transaction per FTE - % EDI usage - Annual transaction - Annual # manual journal - % vendors using turnover per accounts entries per FTE "invoiceless processing" receivable employee - Average age of general - % vendors using summary - Annual transaction ledger systems invoicing turnover per cash - Cost per line item - Span of control: A/P staff applicator processes to management ratio - Average remittances - Cycle time to complete - Total A/P cost as a % processed per day earnings release, 10Q, revenue - Average collection period 10K, or annual report - Total A/P cost per invoice - Average write off bill - Error correction entries as processed - Bad debt as a % sales a % total entries - Total A/P cost per payment - Best possible DSO Page 21 of 34
  22. 22. Comprehensive List of Measures - External reporting cost as - Total releases of a % revenue Travel and entertainment hazardous air pollutants - Frequency for closing key expense management (HAP) tons ledgers - Labor cost per invoice - Toxic air emissions - Hours and days for annual - # invoices per FTE - Administration dose - % errors in expense - Average time to prepare - Hours and days for accounts detected by hazardous waste manifest monthly dose auditors - Average time to prepare - Hours and days for - % errors in travel SARA 313 Form R quarterly close advancement records - # days required to - # active accounts per FTE - T&E error rate complete emissions - # accounts in chart of - T&E lead time inventory accounts for business unit - # days required to - # cost centers or Facilities management complete toxic inventory departments for the - Square footage per (SARA 312) business unit occupant - # days required to - # hard closes in excess of - Cost per square foot complete TRI (SARA 313) regulatory/required doses - Building efficiency rates - # days required to per year - Workstation utilization complete waste inventory - # charts of accounts for the rates - Direct costs entire company - Utility rates - Capital expenditures for - # error correction entries - Environmental costs pollution control as a % total entries - Security costs - Capital expenditures for - # errors in financial reports - Project costs pollution prevention - # general ledger posted - Occupancy costs - Days work lost accounts as a % total - Direct environmental costs accounts Environmental Management - Direct health and safety - # general ledger systems - Hazardous waste costs - # pages in monthly report generated - Energy usage (BTLUs) - % accounts reconciled - # environmental audit non - Environmental audit cost - % accounts reconciled compliance and risk issues - Environmental fines paid during the period documented - Human resource statistics - % accounts reconciled at - # notice of violations - # environmental FTEs period end (NOVs) from regulatory audits - % financial reports agencies - # environmental FTEs delivered on schedule - # reportable releases compliance - Reporting cycle times to (federal, state, local) - # FTEs Health and Safety business unit management - # reportable environmental - # environmental FTEs - Reporting cycle times to incidents under local, state, product stewardship the public or federal regulations - # environmental FTEs - Time for top management - OSHA total recordable regulatory and legislation to review statements incident rate (MR) injuries - # environmental FTEs - Total cost per journal entry and illnesses remediation - Total financial reporting - Packaging waste - # environmental FTEs cost as a % revenue - Solid waste waste - Total financial reporting - Total releases TRI tons - # environmental FTEs cost as a % total assets - Air emissions costs water - Total close the - Air pollution prevented tons - # environmental training books/financial reporting - Avg time to prepare air hours cost per FTE permits - # environmental FTEs - Total remittance - Avg time to prepare - # safety training hours processing cost per emissions inventory - Safety & health training remittance processed - Total air emission tons costs Page 22 of 34
  23. 23. Comprehensive List of Measures - Total environmental - Process waste tons Improvement-Change training costs recycled Management - Pollution reduction - Total process waste tons - Dollars saved per - Methods used to prevent - Process waste tons treated employee due to new pollution: % product - Water ideas and/or methods reformulation, % process - Average time to prepare - # job improvement ideas modification water permits per employee - % environmental - Wastewater prevented - % employees active in accreditation of suppliers million gallons improvement teams - % equipment redesign - Water pollution prevented - % recovery and redesign - Water release costs Benchmark performance - Prevented tons - # benchmarking projects - Recyclability/disposal rate conducted ROI on - Waste reduction rate benchmarking projects - Process waste costs - Process waste tons Business process disposed reengineering - Process waste tons - # reengineering projects generated conducted ROI on Page 23 of 34
  24. 24. Comprehensive List of Measures Comprehensive List of IT Measures MEASURABLE ENTITIES IN A SOFTWARE PROCESS Source: Software Engineering Institute, Practical Software Measurement, 2001 THINGS RECEIVED OR USED THINGS CONSUMED Products and byproducts from other processes Resources Resources - effort - people - raw materials - facilities - energy - tools - money - raw materials - time - energy - money THINGS HELD OR RETAINED - time People Facilities Guidelines and Directions Tools - policies Materials - procedures Work in process - goals Data - constraints Knowledge - rules Experience - laws - regulations THINGS PRODUCED - training - instructions Products - requirements ACTIVITIES AND THEIR ELEMENTS - specifications - designs Processes and Controllers - units - requirements analysis - modules - designing - test cases - coding - test results - testing - tested components - configuration control - documentation - change control - defects - problem management - defect reports - reviewing - change requests - inspecting - data - integrating - acquired materials - other artifacts Flow Paths - product paths By-products - resource paths - knowledge - data paths - experience - control paths - skills - process improvements Buffers and Dampers - data - queues - good will - stacks - satisfied customers - bins Page 24 of 34
  25. 25. Comprehensive List of Measures VALUE CHAIN METRICS Source: Gartner Inc. Operational Metrics Time - On-time delivery against commitment - Interim delivery or staged order acceptance - Overall time or throughput time reduction - Cycle time reduction - Availability of information for near-real-time decision support Cost - Total value chain cost - Selected processing costs at selected nodes - Interoperability costs (e.g., ASP, messaging, wireless) - Cash flow - Dollar value of time variance (plus or minus) - Asset utilization (resource wait time, inventory days of supply, inventory turns, net asset turns) Quality - Delivery quality against specifications - Specification completeness or purchase order quality - Cost of rework Connections/Relationships - Number of partners - Number of touch points - Number of collaborative processes - Number of steps in process Innovation Metrics Improvement Trends/Patterns - Promised dates vs. actual dates - Impact of change vs. goals for the change (e.g., market share increase, throughput increase, cycle time decrease) Operational Trends/Patterns - Unit cost trends - Throughput or productivity goals - Transaction or delivery growth goals - Multidimensional analysis (scalability, e.g., as volume of requests increases, does cycle or completion time remain constant?) - Number of partners trading or collaborating electronically Risk Metrics Overall - Cost to enter relationship - Cost to switch or change suppliers or providers - Partner dependency - Partner acquisition time - % of growth or productivity increase from value chains - % of neutral revenue (revenue independent of chains) - % of market share dependent on value chains Page 25 of 34
  26. 26. Comprehensive List of Measures MINIMUM SET OF PROCESS METRICS FOR APPLICATION DEVELOPMENT Source: Gartner Inc. Productivity (Development/Enhancement) - Function points per staff hour Productivity (Support) - Function points supported per full-time maintenance programmer Quality (Product) - Defects per function point found during the warranty period (usually 30 to 90 days after production) Quality (Process) - Defect removal rate Cost (Development/Enhancement) - Cost per function point Cost (Support) - Cost per function point Client Satisfaction - Organization/project specific KEY IT METRICS FOR CIOS Source: Gartner Inc. Applications Development - $ per function point Data Center - $ per MIPS Central Servers - $ per combined power rating Distributed Computing - $ per user IT Help Desk - $ per call Wide-Area Data - $ per device Voice Network - $ per minute and $ per extension Page 26 of 34
  27. 27. Comprehensive List of Measures TYPICAL COSTS FOR MEASURING QUALITY OF CONFORMANCE Source: Garrison & Noreen (1997) Prevention Costs - Systems development - Quality engineering - Quality training - Quality circles - Statistical process control activities - Supervision of prevention activities - Quality data gathering, analysis, and reporting - Quality improvement projects - Technical support provided to suppliers - Audits of the effectiveness of the quality system Appraisal Costs - Test and inspection of incoming materials - Test and inspection of in-process goods - Final product testing and inspection - Supplies used in testing and inspection - Supervision of testing and inspection activities - Depreciation of test equipment - Maintenance of test equipment - Plant utilities in the inspection area - Field testing and appraisal at customer site Internal Failure Costs - Net cost of scrap - Net cost of spoilage - Rework labor and overhead - Reinspection of reworked products - Retesting of reworked products - Downtime caused by quality problems - Disposal of defective products - Analysis of the cause of defects in production - Re-entering data because of keying errors - Debugging of software errors External Failure Costs - Cost of field servicing and handling complaints - Warranty repairs and replacements - Repairs and replacements beyond the warranty period - Product recalls - Liability arising from defective products - Returns and allowances arising from quality problems - Lost sales arising from a reputation for poor quality Page 27 of 34
  28. 28. Comprehensive List of Measures HEWLETT PACKARD SOFTWARE PROCESS IMPROVEMENT METRICS Source: Grady (1997) Process and Product Descriptions - Activity Breakdown after Changes - Development Type - Defects before Changes - Computer Programming Language - Defects after Changes - Type of Product - Project Calendar Time before Changes - Project Calendar Time after Changes High-Level Process Measurements - Product Size Defect Failure Analysis - Effort - Defect Failure Analysis before Changes - Productivity before Changes - Defect Failure Analysis after Changes - Productivity after Changes - Activity Breakdown before Changes MOTOROLA SOFTWARE PROCESS IMPROVEMENT METRICS Source: Daskalantonakis (1992) Project Planning - Customer-Found Defects - Schedule Estimation Accuracy - Customer-Found Defects Delta - Effort Estimation Accuracy Customer Service Defect Containment - New Open Problems - Total Defect Containment Effectiveness - Total Open Problems - Phase Containment Effectiveness - Mean Age of Open Problems - Mean Age of Closed Problems Software Reliability - Failure Rate Non-Conformance Cost - Cost of Fixing Problems Software Defect Density - In-Process Faults Software Productivity - In-Process Defects - Software Productivity - Total Release Defects - Software Productivity Delta - Total Release Defects Delta Page 28 of 34
  29. 29. Comprehensive List of Measures AT&T SOFTWARE INSPECTION PROCESS METRICS Source: Barnard & Price (1994) Cost - Percentage of Re-Inspections - Average Effort per Thousand Lines of Code Efficiency - Percentage of Re-Inspections - Total Thousand Lines of Code Inspected Cycle Time Effectiveness - Average Effort per Thousand Lines of - Defect Removal Efficiency Code - Average Faults Detected per Thousand - Total Thousand Lines of Code Inspected Lines of Code - Average Inspection Rate Quality - Average Preparation Rate - Average Faults Detected per Thousand - Average Lines of Code Inspected Lines of Code - Average Inspection Rate Productivity - Average Preparation Rate - Average Effort per Fault Detected - Average Inspection Rate Conformity - Average Preparation Rate - Average Inspection Rate - Average Inspection Rate - Average Preparation Rate - Average Preparation Rate - Average Lines of Code Inspected - Average Lines of Code Inspected SPR SOFTWARE PROCESS IMPROVEMENT METRICS Source: Jones (1997) Process Improvement - Function Points per Month - Process Improvement Expenses per - Lines of Code per Month Capita - Cost per Function Point - Process Improvement Stages in Calendar - Cost per Line of Code Months - Improvements in Delivered Defects Cost - Improvement in Development Productivity - Work Hours per Function Point per - Improvements in Development Schedule Activity - Organization Size in Number of People - Staff (Number of People) per Activity - Capability Maturity Model for Software - Effort (Months) per Activity Level - Schedule (Months) per Activity - Costs per Activity Application/System - Percent of Costs per Activity - Application Class - Programming Language Quality - Size in Function Points - Potential Defects (Estimated) - Size in Lines of Code - Defect Removal Efficiency - Delivered Defects Productivity - Defects per Function Point - Work Hours per Month (Function Points) - Defects per Thousand Lines of Code - Average Monthly Salary Page 29 of 34
  30. 30. Comprehensive List of Measures TWENTY-FIVE METRICS TO ASSESS THE IT ORGANIZATION’S VALUE Source: IT Value, CIO Magazine, 2003 Productivity/efficiency - IT spending as a percent of revenue - IT spending as a percent of income - IT spending per employee - Revenue per IT$ - Income per IT$ - Business/IT staff ratio Quality/effectiveness - IT Yield = ratio of projected value of IT projects to actual benefits attained - IT Cost of Quality = cost of cancelled projects and system failures - Business IT Cost of Quality = the true cost to the business of the IT Cost of Quality - Internal customers (IT customer) satisfaction Delivery Process - Total on time delivery percent across all IT services - Backlog cost = total $ value of all work awaiting to be executed by IT - Backlog aging = projected $ value of work beyond 30, 60, 90 days of original planned start date - Rework cost = internal cost of rework across all IT processes Asset Management - Systems portfolio size - Hardware asset base size (by type of asset—M/F, workstation, router, etc.) - Unit costs associated with asset categories - Allocation of $ across functional categories (development, maintenance, data center, network, packages, etc.) Human Resources - Total IT staff size - Staff size by function - Average staff cost - Turnover and distribution of reasons for individual turnovers - Training days per staff member - Change in value of staff inventory due to training - Work hours per professional/productive work hours per professional Page 30 of 34
  31. 31. Comprehensive List of Measures IT BALANCED SCORECARD SAMPLE STARTER METRICS Source: Meta Group, A Few Good Measures, 2003 Profit (financial, costs) - Number of employee determined friends - Budget versus actuals per employee - Percentage of budget on initiatives - Personnel retention rates - Percentage of budget on upgrades - Speed of learning new systems or jobs - Long-term decreases in O&M over Time - Number of future project requests for - Return-on-investment for IT assets employee’s expertise - Percentage of overhead per sales - Number of core disciplines mastered by - Sales per employee employee - Profit per employee - Market capitalization per employee - IT budget per employee Project (change, initiative) Patron (customer, client, end user) - Project team maturity - Percentage of very satisfied customers - Number of project leads known by - Number of very satisfied artifacts customer - Customer calls per hour - Number of customers known by project - Churn or repurchase rates team - Customer lifetime value - Actuals versus budgets - Number of touch points with customer - Rework per project - Number of employees the customers know Peril (risk) - Aggregate loss exposure Process (operations) - Business impact per incident - System reliability, uptime, or availability - Insurance premium per employee - Service-level agreement metrics - Speed of reconstitution - Time to market for new products - Realism of simulation(s) - Number of Version 1 bugs per new - Number of impromptu (live) simulations product - Time to reconfigure (flexibility) of value Policy (governance, mission, vision, values) chains - Recall of policy by employee - Lowest costs vs. worldwide benchmarks - Number of stories per manager - Number of private outsourcing deals - Team recall accuracy of mission, vision, - Labor mix (seniority) per project and values - Number of references per project start - Embodiment of corporate values - Habitual reminders of values (e.g. safety Personnel (people, learning, or training) moments) - Employee satisfaction Page 31 of 34