Establishing Key Performance Indicators

In a previous article, we discussed The Role of KPIs in the success of ITIL applications and service management. Now that we have identified the importance of KPIs, we’ll now go into further detail on the process of establishing your key performance indicators.

The process of establishing your key performance indicators can be lumped into five main parts: initiation, planning, design, implementation, and maintenance and governance of KPIs.

During the initiation and planning stage, the main goal is to define the overall strategy. In order to define the strategy, the company must define the requirements, identify the resources and identify all the tools that will be required for data collection and reporting. Once that has been done, it is important to establish all assumptions and identify the end users of the metrics and the purpose. The last two steps of the planning stage include defining the appropriate thresholds and tolerance levels for each KPI and identifying the Critical Success Factors (CSFs).

After the initiation and planning stage comes the design and implementation stage. During the design and implementations stage, the company must establish the desired KPIs and identify which KPIs and metrics are to be reported. Once the KPIs that have to be reported are identified, they must identify all the data sources. After the data sources have been chosen, the process of data collection begins. During this process, the company must collect the data required for building the metrics, and ensure that the underlying data supports the KPIs. Then, the company must design and develop individual KPIs and dashboards/reports. The dashboards/reports must then be published and the data collection and reporting process must be documented.

The third and final stage in the process of implementing your KPIs is the maintenance and governance of KPIs. During this stage, the company must define a catalog of standard service reports and KPIs that are available for sharing and define a master set of service metrics, calculations and assumptions. Then the company must define and maintain a standard set of SLAs and tolerance levels for all KPIs and define the training strategy. After this, they must socialize the availability of reports and dashboards to other groups in the organization and conduct demos. Then, they must document the processes used for data collection and aggregation. Once all of this is done, the dashboards/reports should be periodically reviewed with management to identify where there is room for improvement over the quality and use of the reports provided.