This document discusses moving from ad hoc operational metrics to key performance indicators (KPIs) and a strategy-focused organization. It explains that connecting existing "ad hoc" metrics to KPIs and then to critical success factors creates line of sight between tactical performance measurement and strategy. A diagram shows how metrics can flow up from ad hoc measures to KPIs, critical success factors, goals, and ultimately strategy. The document advocates that indicators are better suited than metrics for measuring strategy.

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2. Positioning
Many organizations have operational metrics in place. Identifying the Key
performance measures is the starting place for developing a strategy
based Scorecard
Vision Moving from ad hoc collections of performance metrics to Key Performance Metrics (KPI) to a
Strategy Focused Organization (SFO), is a natural progression for many organizations.
Positively Impact
Financial Making the connections between “ad hoc” metrics to KPI’s then to CSF’s creates a Line of Sight
Performance between tactical performance measurement of strategy.
Strategic Objective Performance Goal Critical Success Factor Key Performance
(CSF) Indicator (KPI)
Be The Preferred
Supplier Of Business Provide on-time, on- Budget Variance BPI ≥ 0.95
Applications budget, on-
Schedule Variance CPI ≥ 0.97
Traceable to specification for our
Increased Customer enterprise applications Function Points
% Requirements
Revenue Delivered ≥ 90%
Variance An ad hoc collection of
Target
existing operational
Cost of Delivery Declining Cost per performance metrics.
Provide scalable Impact Customer Each metric was
platform for created for a good
Performance Impact SLA Compliance ≥ 0.98
acquisition and growth reason, but not
of our customer base Global Operational 24/7/365 Non-Stop necessarily for a the
Baseline Operations measurement of a
strategic objective
Why What How Measures
Flow Up from Ad Hoc to KPIs to CSF to Goals to Strategy
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3. Measurement
Metrics are useful, indicators are better suited for strategy
Deriving Enterprise-Based Measures Using the Balanced Scorecard and Goal-Driven measurement
Techniques, Wolfhart Goethert and Matt Fisher, Software Engineering and Measurement Analysis Initiative,
CMU/SEI-2003-TN-024, October 2003
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