When investing in a formal architecture practice, it is essential for an organization to be able to measure its success or failure. The most common way of doing so is by establishing Key Performance Indicators (KPIs). Peter Harrad discusses the key considerations when identifying critical success factors and the problems that come with measuring them. Read how best to derive your organization's KPIs and adopt the advised 4 step process - align your architectural KPIs with your business goals, starting the right way.
When an organization invests in setting up a formal architecture practice, the organization leadership naturally wants some way to be able to monitor the success or failure of the initiative. So one aspect of setting up such a practice is establishing ways to monitor this, and the most common way organizations achieve such a goal is the establishment of Key Performance Indicators (KPIs) for the architecture practice.
Having been asked for suggestions more times than I can count, and having seen it done badly in some places and well in others, in this paper I’m going to present a framework for establishing KPIs based on existing best practices, and give an example of how to use this framework to derive key performance indicators for your architecture practice.
Initial Principles
The first thing to note is that key performance indicators need to be usable and part of how to accomplish this is to have a reasonable number of them. A rule of thumb is to look for around five to ten key performance indicators maximum. While it might seem that selecting 2 dozen KPIs to monitor results in greater effort and greater control, in practice this means that it is unclear precisely which measures are critical and which are not – effectively, the organization has not really identified what is key and what is not.
Second, while it should be obvious, it is important to remember to be wary of how a key performance indicator is monitored and used. To adapt a famous quote from Sir Francis Bacon, key performance indicators make good servants but poor masters.
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