Defining Key Performance Indicators

Have you ever delivered working software not knowing what the key performance indicators (KPI’s) were before and after?

As a product owner, it’s easy to get caught up in constantly delivering items and not putting enough emphasis on the why and what.

In my previous blog post, I discussed using the scientific method approach to problem solving. As part of that approach, it’s important to define what are the current performance indicators based on the problem you are solving. Also, defining what is the target performance expected post release.

For example, taking an idea from a previous post, here is a list of current performance indicators for a mobile application for teaching guitarists how to play blues guitar:

  • Total number of users with app installed = 3,000
  • User’s average time spent viewing videos after login = 5 minutes
  • User’s average number of times opening the app per month = 3
  • Total percent of users subscribing to email = 15%
  • Total percent of users that convert to paid app with downloadable guitar tabs = 3%
  • Application can take up to 7 seconds to load home page
  • Users have trouble navigating throughout the app based on qualitative and quantitative data
    • Happy path is shown to be used 50% of the time

Each one of the above items should have a clear calculation that is shared with stakeholders. After releasing a number of items, including some refactoring to reduce the time to load the application and a new navigation bar in the header of the application, my target performance is:

  • Total number of users with app installed = 3,500
  • User’s average time spent viewing videos = 8 minutes
  • User’s average number of times opening the app per month = 7
  • Total percent of users subscribing to email = 20%
  • Total percent of users that convert to paid app with downloadable guitar tabs = 5%
  • Application load time reduced to 3 seconds
  • User navigation is improved through qualitative and quantitative data
    • Happy path is shown to be used 70% of the time

After the software is released, continuously inspect the data with your current indicators vs. your expected indicators. Are the new items working as you thought? Get feedback quickly and adjust your strategy quickly if it’s not working as you had planned based on your KPI’s.

Click here to download a simple template for KPI creation.

What has been your experience with KPI’s in software development? What methods have you found to be successful in capturing them?

Please leave your thoughts in the comments below.

2 thoughts on “Defining Key Performance Indicators”

  1. Insightful and well stated article. Examples are great and useful to provoke the right thoughts needed for using the concept in any other business/product situation. Thanks for sharing your approaches!

    Reply

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