A Key Performance Indicator Quality Model and Its Industrial Evaluation
Paper in proceeding, 2016
Background: Modern software development companies
increasingly rely on quantitative data in their decisionmaking
for product releases, organizational performance assessment
and monitoring of product quality. KPIs (Key Performance
Indicators) are a critical element in the transformation of raw
data (numbers) into decisions (indicators).
Goal: The goal of the paper is to develop, document and
evaluate a quality model for KPIs – addressing the research
question of What characterizes a good KPI? In this paper we
consider a KPI to be ”good” when it is actionable and supports
the organization in achieving its strategic goals.
Method: We use an action research collaborative project with
an infrastructure provider company and an automotive OEM
to develop and evaluate the model. We analyze a set of KPIs
used at both companies and verify whether the organization’s
perception of these evaluated KPIs is aligned with the KPI’s
assessment according to our model.
Results: The results show that the model organizes good
practices of KPI development and that it is easily used by the
stakeholders to improve the quality of the KPIs or reduce the
number of the KPIs.
Conclusions: Using the KPI quality model provides the possibility
to increase the effect of the KPIs in the organization and
decreases the risk of wasting resources for collecting KPI data
which cannot be used in practice.