Measuring Business Analysis Efforts: The KPIs That Matter in 2020
Not so long time ago, the business analysis used to refer to a job of a person employed as a business analyst, mainly in a corporate setting.
However, we often forget that business analysis is a whole discipline that includes tasks and techniques that analyse the structure, policies, and operations of a company so it can recommend solutions that lead to achieving its business goals. To be effective, though, business analysts need specific KPIs (Key Performance Indicators) that include criteria on which individual performances are evaluated.
Process optimization KPIs
The percentage of Business Process Productivity Increase is observed as the actual increase in productivity after a new system was implemented. The percentage of Cycle Time Reduction is a cycle time reduction after the system was implemented. Unit Cost is defined as the reduction of unit cost within a 6-month period after the new solution is introduced. Increase in Revenue as a Result of Solution is the fourth indicator that refers to the actual increase of revenue as attributed to the solution.
Project value KPIs
The first one is the Deviation of Planned ROI, which is the difference between the actual ROI and ROI in the planned baseline. Deviation of Net Present Value (NPV) is the deviation in value between the planned baseline against the actual net present value. Deviation of Planned Break-even Time is defined as the differences in time between the actual break-even time and the planned baseline, in which the business costs are equal to the generated income.
Quality effectiveness KPIs
Percentage of Rework Attributable to Requirements can be expensive, amounting up to 40% of the total budget, while up to 70% falls on inaccurate or ambiguous requirements. Percentage of Projects with Prioritized Requirements identifies which projects to prioritise to ensure that only high-value items are taken into consideration. Percentage of Requirements Fully Implemented allows business analysts to track requirements through testing, proper designs, and accurate deployment.
Percentage of Approved Requirements Not Implemented evaluates the performance of the overall user experience and satisfaction with the result. Developer Requirements Satisfaction Index allows developers to express their satisfaction with requirements in the form of a survey. QA Requirements Satisfaction index includes survey results from QA that maintain the testability of requirements. Requirements Tested (%) shows what percentage of requirements were actually tested and which ones were not.
Digital marketing KPIs
Digital Marketing KPIs are quantifiable goals that help you track and measure the success of your marketing campaigns. By creating a specific digital marketing KPIs such as web traffic sources, cost per lead, online conversion rates, and customer lifetime value, analysts can identify targets and goals, but also measure business performance based on those value. Monitoring and reporting on so many KPIs aren’t only stressful, but also time-consuming unless analysts are using digital marketing reporting software that automates the process by integrating multiple data access points into real-time dashboards that are easy to read and report.
Project management KPIs
These KPIs are used to measure the performance of project management. Deviation of Planned Expenses is the difference in total costs between the actual budget and the planned baseline. Cost of Managing Processes is described as periodic process managing costs typically based on the number of Full-Time Equivalent (FTE) personnel involved in management functions of processes, which is then compared against the percentage of FTEs actually engaged in a project that were not initially assigned.
Budgeted Cost of Work Scheduled (BCWS) defines the cost of activities that are planned and scheduled for completion. Sometimes the ‘planned value’ term is used. Actual Cost of Work Performed (ACWP) is the sum of the actual costs of completed activities. Budgeted Cost of Work Performed (BCWP), also known as Earned Value is the sum of the planned or scheduled budget for completed activities. Cost Performance Index (CPI) defines the earned valued divided by the actual costs, while Cost Schedule Index (CSI) multiplies the CPI by SPI (Schedule Performance Index) to measure the likelihood of recovery for a project that has breached its budget or timeline.
Project portfolio KPIs
Alternatively, business performance analysts may evaluate the KPIs by looking into the project portfolio. The Percentage of Initiated Projects Without Business Case identifies projects that have missed important milestones, while the Percentage of Challenged Projects defines those that have either exceeded budget by 15%, delivered two months after the deadline, or failed to deliver the major scope of the project.
Stakeholder engagement KPIs
Stakeholder Satisfaction Index is defined as a series of interviews that determine overall satisfaction with the requirements. On the other hand, the number of Stakeholder Comments Received shows the total number of concerns and comments given by stakeholders with respect to the given requirements. Stakeholder Lifecycle Participation results from the total number of stakeholders who take part in lifecycle events and is usually shown as a percentage.
Further on, it’s important to determine the number of Key Stakeholders Not Identified or only identified in later stages of the project, as well as the number of Participating Stakeholders Interviewed or taken part in focus group discussions and events. The percentage of Stakeholder Attendance is defined as the percentage of stakeholders who turned up during meetings against the number of stakeholders invited. The number of Needs Recognized by Stakeholders identifies the number of needs that were successfully reconfigured as requirements.
Defining the essential KPIs is an important skill for anyone working on business improvement analysis. These indicators are usually captured or received from a combination of reports, surveys, spreadsheets, and charts where a developer determines target performance levels and identifies the variance from those target values.