Key Performance Indicators is a jargon that is used in
almost every industry whether it is IT, Automobile or Online business. KPI is a Metric but a Metric is not
necessarily a KPI! There will be a target specified against each KPI and the
value can be above or below the target set. One may collect 20-25 metrics for a
department but there might be 5 or 6 metrics which can be used to track the performance
of the group or the department. These metrics are generally classified as KPI's
and each KPI can be lined to the goal of that department. KPI is decided by
management and will be aligned to the program or organization goals.KPI is easy
to understand and everyone working in the department from the lowest role to
the highest role should be able to interpret/understand the metrics. Whenever
the KPI value falls below or above the target values action should be taken. It
is difficult for an organization to perform or for a client to monitor the
performance of a partner without KPI's.
The source of data should also be chosen and extreme care
needs to be taken while preparing the KPI's. It will be good to document the
criteria used for preparing the KPI as there will be consistency and accuracy
in the data prepared. KPI's are normally prepared and reviewed on a weekly or
monthly basis in the form of a Dashboard. It is also important to share the KPI
dashboard with all the members of the department so that everyone is aware of
how a group is performing. Defining too many KPI's will be useless for decision
making. The KPI should also satisy the SMART Criteria which is
- Specific
- Measurable
- Attainable
- Relevant
- Time Bound
a
- Defect Leakage
- Defect Acceptance Ratio
- Test Design/Execution Productivity
- Percentage of Automation
- Test Coverage
- Requirements Coverage
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