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What's the Difference Between Metrics and KPIs in Business Intelligence?

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From this discussion on Linkedin, Measure, Metric and KPI's (which requires you to join the group), what's the difference between metrics and KPIs in BI?  Is there one?

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  • A KPI is a specific metric that your organization or your department has identified as one that closely tracks or predicts performance. It might be a key corporate objective such as sales growth hitting a targeted number for the year, or it could be a departmental quality metric like the daily % of calls handled within the first minute.

    Just about all the other data that an organization collects and then looks at or analyzes at least occasionally would be considered just a "metric."

  • Key Performance Indictors are the "Key" ones in Metrics.
    KPIs are the five or six metrics that are the most important and in spending little amounts of time with them you get the whole picture quickly. For example, a company's Sales Numbers for the Quarter, Collections, Inventory Turns, may all be KPIs. But the poor sap in the call center is measured by Average Handle Time per phone call. In that case it is a Metric but may be not a KPI from the company's point of view. For the Call Center manager - it may a be a KPI!

    It all depends on what your function is and your vantage point!

  • Peter --

    I agree with Mark. I might occasionally analyze data and look at various metrics.

    KPIs are specifically designed to measure enterprise performance toward a corporate strategy.

  • The main difference between a metric and a KPI is context. A metric is essentially just a value of some form – i.e. number of customers, net sales, on-hand-inventory, etc. However, a KPI typically includes some set of business value to the metric. By its definition a KPI is a metric used to track some specific performance objective (profitable customers vs. customers, sales relative to plan) – that has also been designated as a “key? indicator to the company. Typically, a KPI therefore is some form of composite metric – which has calculations and/or specific value added information associated with it – to tell how the business is performing relative to some form of specific objective. So if net sales are $1mm, there’s no way to know if that’s good or bad by simply having the metric. A KPI for net sales relative to last year which shows an increase of 40% has significantly more value than the metric in isolation.

  • I concur with all the above: KPIs are a type of metric. I particularly like Bob's comment that KPIs relate to context: the KPI is whether the metric is changing over time and at what rate and in what direction!

    Cheers

  • A metric is often an independent measure of a result. A KPI on the other hand is a measure relating to corporate performance that helps manage the gap between strategy and result.

  • A measure is a number representing a business relevant quantity (money, nbr of customers, hours etc.)

    A measure sampled in time is a metric

    A metric included in a performance management system (like the balanced scorecard) is a KPI

    My 2 cents

  • Just reiterating the thoughts of others in my own words:

    Measure - Anything that is measured. Ex: No.of customers, Total Revenue etc. Key thing is that there is nothing inherently good or bad with a measure. The only thing of interest in a measure is how was it measured?

    Metric - A value typically derived by a combination of two or more measures. Ex: Financial Ratios, Total Revenue over time etc. Metrics do provide the notion of whether the values are good or bad and also helps in benchmarking.

    KPI - Probably the most important to BI practitioners as it brings in the business context. Metrics within a particular organizational or industry context are KPIs.

    It is important to note that one builds on another. KPIs are built out of metrics which are in-turn created out of measures.

  • A KPI is simply a metric that is tied to a target. Most often a KPI represents how far a metric is above or below a pre-determined target. KPI’s usually are shown as a ratio of actual to target and are designed to instantly let a business user know if they are on or off their plan without the end user having to consciously focus on the metrics being represented. For instance, we might decide that in order to hit our quarterly sales target we need to be selling $10,000 of widgets per week. The metric would be widget sales per week; the target would be $10,000. If we used a percentage gauge visualization to represent this KPI and we had sold $8,000 in widgets by Wednesday, the user would instantly see that they were at 80% of their goal. When selecting targets for your KPI’s you need to remember that a target will have to exist for every grain you want to view within a metric. Having a dashboard that displays a KPI for gross sales by day, week, and month will require that you have identified targets for each of these associated grains.
    (Original: http://keyperformanceindicators.info)

  • user-pic

    Need some examples of measures and KPIs

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