Are we measuring right?

In the following thread, I will try to list some of the challenges that we face in the process of KPI (key Performance Indicators) definition.

Customer interest

few questions to ask your management team:

1. If you stop or delay measurement, is your customer going to complain and raise a red flag?
2. Does your customer question and discuss your measurement accuracy?
3. Is your customer using your KPI in process control, quality control, website info or advertising material?
4. Is your customer using your KPI in key-strategic decisions?

If most of the answers come negative then you are probably picking the wrong KPIs. In my opinion, measurement should be driven by customer interest and focus. It is not that difficult to predict what a customer wants, we are playing a customer role in our daily/weekly/monthly shopping. Customer cares about quality, cost and time to deliver the needs. So when you are addressing your customers, make sure you pick the right KPIs that trigger their interest in quality, cost and time. For instance, sharing employee performance measurement with your customer is not really the focus they want. However, sharing KPIs that reflect the quality and stability of a product is straight to the point. In addition, a KPI should reflect the past, the present and help to manage the future. The following are some of the interesting KPIs that you might want to share with customers:

1. Quality measurement: (The present) that includes current known issues in the product, (The past) a trend that shows the decrease/increase of issues over time with key technical/management decisions annotations, etc...
2. Cost measurement: A cumulative report that shows the trend of project cost over time relatively to project full budget as well as project phase sub-budget. If you are in a service model, then a trend of an average cost per resource would be very helpful along with annotations that represent key technical/management decisions over time.