Thursday, February 28, 2013


KPI Basics


What is a measure?

Definition: A measure is an agreed upon concept of quantification. It's a standard, which when "measurements" or "values" are associated, allows for a common language and a basis for comparison. 

Example : Speed expressed in km/h, or temperature expressed in ºC, or beer as a pint.


What is a metric?

Definition: IMHO, a measure and a metric are the same thing. And according to the Oxford dictionary, the word measure is derived from the Latin "metiri". Having said that however, in speaking with a number of my colleagues, there seems to be a subtle difference in that the term metric has more of a goal or performance nuance to it, as opposed to the fundamental or unit specific term measure.

Example : Speed limit of 50 km/h, or the boiling temperature of 100 ºC, or ordering half a pint of beer.


What is a key performance indicator (KPI)?

Definition : KPIs are measurable industry, department or task relevant performance metrics that are evaluated over a specified time period, and compared against acceptable norms, past performance or targets. 

Example : Currently we are driving at 60 km/h (10 km/h higher than the posted speed limit of 50 km/h), or the average water temperature over the past week was 95 ºC (5 ºC lower than the target temperature of 100 ºC), or average pints per patron per visit at our pub this month is 1.6 (compared to the local pub average of 1.4ppv and last month's average of 1.3ppv).

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