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KPIs for Business Analysis and Project Management

ey performance indicators (KPIs) are high-level snapshots of an organization or a business process based on specific predefined measures. KPIs are typically captured and conveyed in a combination of reports, spreadsheets, or charts. In developing KPIs, a user or developer defines target performance levels and then decides the best way to represent variance from that target. If a Key Performance Indicator is going to be of value, then there must be a way to accurately define and measure it. For example, Generate More Repeat Customers is useless as a KPI without some way to distinguish between new and repeat customers. Provide Excellent project management and business analysis wont work as a KPI because there is no way to measure this. Defining KPIs is a standardized skill for many BI analysts. However, if you try to find KPIs to measure business analysis, you will find very little written on this subject. This article is intended to provide some ideas of how we could define KPIs to improve business analysis and project management. Please give me your comments on this subject.

Business Analysis KPIs


Below are some KPIs to measure the effectiveness of business analysis for projects.
 %

of Rework Attributable to Requirements Rework is a serious problem on most projects, representing about 40% of the total project cost. According to industry studies, about 70% of this related to ambiguous, inaccurate, or missing requirements. of Projects with Prioritized Requirements Prioritizing requirements is critical to ensure that project teams first focus on items that deliver high value to the business. of Requirements Fully Implemented This is part of requirements traceability; requirements must be traced through design, test, and deployment. of Approved Requirements not Implemented

 %

 %

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 Developer

Requirements Satisfaction Index Developers should be surveyed to determine their satisfactions with requirements. This actually should be a series of requirements questions concerning quality, such as
Clear Accurate Complete Testable Feasible Testable

 Project

Stakeholder Satisfaction Index Project stakeholders should be interviewed to determine if they felt their needs were met and their overall satisfaction with the requirements. This might be done with a series of questions, such as:
Do

the requirements address the business needs? the requirements gold plated by BAs, or developers? stakeholders adequately involved in the requirements process?

Were Were  QA  %

Requirements Satisfaction Index QA should be surveyed to ensure that the requirements were testable. of Requirements Tested One good measure to determine if the requirements were testable and implemented is to determine what % of the requirements were tested. of Missing Requirements Missing or incomplete requirements is always a major problem for projects. This KPI tracks the number of requirements that were added after the baseline was approved. Satisfaction Index Are the users satisfied with the delivered solution?

 Number

 User

Project Value KPIs.


Use KPIs to measure the success of business analysis and project management and is the value delivered to the business. Below are some KPIs that could be used to measure value delivered to the business.
 Deviation

of Planned ROI The deviation of the planned Return on Investment (ROI) is the difference between Return on Investment in the planned baseline and the actual Return on Investment. ROI is the return an investment will generate annually as a percentage of the investment. of Net Present Value (NPV) The deviation of the planned net present value (NPV) is the difference in value between the planned baseline against the actual net present value. NPV is a method used in discounted cash flow analysis to find the sum of money representing the difference between the present value of all inflows and outflows of cash associated with the project by discounting each at a target yield. 2

 Deviation

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en FOCUS Requirements Suite


 Deviation

of Planned Break-Even Time The deviation of the planned break-even time is the difference in time between the planned baseline against the actual break-even time. The break-even time is determined by the point where the business expenses equal the income generated, with neither profit nor loss. Process Productivity Increase % The actual increase in business productivity after the system has been implemented. Time Reduction % The decrease in cycle time that occurred after the system was implemented expressed as a %.

 Business  Cycle

Project Management KPIs


The KPIs below can be used to measure the effectiveness of project management.
 Deviation

of Planned Budget The deviation of the planned budget (cost) is the difference in costs between the planned baseline against the actual budget. of Managing Processes Periodic costs of managing processes, usually based on the number of Full Time Equivalents (FTEs) involved in management functions for processes. of Planned Hours of Work The deviation of the planned work is the difference in work hours between the planned baseline against the actual statement of work. of Planned Time Schedule for Project/Program The deviation of the planned time schedule is the difference in time between the planned baseline against the actual schedule. of FTE Actually Working on Project that were not Initially Assigned Percentage of FTE actually working on project that were not initially assigned. of Milestones Missed Percentage of milestones as recorded in all projects/programs that have been missed. of Overdue Project Tasks Percentage of overdue project tasks. Cost of Work Scheduled (BCWS) The budgets of the activities that are planned or scheduled to be completed. Another term for BCWP is planned value. of Milestones Missed Number of milestones of project missed. Cost of Work Performed (ACWP) The sum of actual costs of activities that are completed. Cost of Work Performed (BCWP) or Earned Value The planned or scheduled cost of activities that are completed. Another term for BCWP is earned value.

 Cost

 Deviation

 Deviation

 %  %  %

 Budgeted

 Number  Actual

 Budgeted

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 Cost  Cost

Performance Index (CPI) Earned Value divided by the actual cost (BCWP/ACWP). Schedule Index (CSI) Cost Performance Index times Schedule Performance Index (CPI x SPI). CSI measures the likelihood of recovery for project that is late and/or over budget. Variance (CV) Earned Value minus the actual cost (BCWP-ACWP). at Completion (EAC) The actual cost of work performed (ACWP) plus the estimate to complete (ETC) for all of the remaining work. Performance Index (SPI) Earned Value divided by the planned value (BCWP/BCWS). Variance (SV) Earned Value minus the planned budget for the completed work (BCWP-BCWS).

 Cost

 Estimate

 Schedule

 Schedule

Project Portfolio KPIs


Another way to look at KPIs is to examine the project portfolio. Below are some measure that can be used to measure the project portfolio.
 %

of Initiated Projects without Business Case Often projects are started without a clear business case. These KPIs tell what % of your projects were started in which this was the case. of Projects on Time Percentage of projects that are executed in the planned time-frame based on their baseline. of Projects with Missed Milestones Percentage of projects that have missed milestones. of Projects on Budget The % of projects that were completed within budget. of Cancelled Projects The percentage of projects that were started and then cancelled. of Challenged Projects The percentage of challenged projects. The definition of challenged project needs to be defined, such as projects that met one of the following criteria:
Exceeded Delivered Major

 %  %  %  %  %

budget by 15% more that 60 days late

scope not delivered

 %

of Projects Completed on Time The percentage of projects that were completed on time.

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