Importance Of MetricsEssay Preview: Importance Of MetricsReport this essayAbstractEstablishing metrics is crucial to any organization, especially in technology related company projects. Metrics permit organizations to measure its performance against industry sectors to determine how well the company is doing. Furthermore, metrics allow organizations to evaluate and improve the effectiveness and efficiency of its processes. Metrics are designated in different categories. The categories identified in this document include output, in-process, and people. The organization must first determine exactly what it is that the company is trying to accomplish or determine. Metrics are then identified based on what is relative to the subject matter. Finally, metrics are verified when tracking progress against previous records or a company given standards or goals.

Importance of MetricsEstablishing metrics is crucial to any organization, especially in technology related company projects. Metrics can be defined as a system of parameters or “ways of quantitative and periodic assess of a process that is to be measured, along with procedures to carry out such measurement and the procedures for the interpretation of the assessment in the light of previous or comparable assessments” (www.wikipedia.com). The results of the metrics can be utilized to record trends, efficiency, capital, and etcetera. Metrics permit organizations to measure its performance against industry sectors to determine how well the company is doing. Furthermore, metrics allow organizations to evaluate and improve the effectiveness and efficiency of its processes. As stated previously, the establishment of metrics is beneficial for any organization. Metrics allow organizations to optimize its productivity.

Categories of MetricsCategories of metrics differ according to the type of company and its goals. An article written by Paul Germeraad (2003), describes in detail different segments of metrics that are utilized in measuring Research and Development processes which is a critical technical competency. Each category of metric is calculated or measured differently. The categories identified in the article “Measuring R&D 2003” include output, in-process, and people.

Output metrics can come in tangible or intangible form. Some of the tangible output metrics include return on investment, capital gain, quality of products or service, quantity of products or service. The measure of the return on investment (ROI) is essential. The ROI is used to assess the effectiveness of an investment such as a technology related project. “To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio” (www.investopedia.com). The ROI is an accepted metric across many companies as it is easy to calculate and understand. Capital gain is also a good metric used by many companies. Using the capital gain as a measure will yield notification of whether or not the project is successful. The value of the project must be worth more than the cost of implementing the project in order to receive positive capital gains. The quality of products is another good output metric. A technology company can compare the difference of its previous products to its new products to determine whether or not the quality is better, the same, or worse. This would identify if the new project or process was a success or a failure. In addition, the quantity of products or services is also utilized as a metric. Technology companies can compare the amount of products produced in a specific time frame with its new investment to the amount of products produced by the previous process. For example, cell phone companies may find a new process of mass producing cell phones more beneficial than producing each cell phone individually providing that the quality is still the same if not better. The intangible metrics include customer satisfaction and knowledge gained.

The in-process category of metrics is tracked by setting benchmarks or milestones to ensure a project is completed in an effective and efficient manner. The milestones may include a variety of different items dependent upon the type of project that is given. Examples of milestones utilized in web-development include items such as developing the project plan, developing the prototype, meeting for client review and approval, construction, testing, and etcetera. Other in-process metrics that companies can use for managing its technology-related projects include tracking the number of meetings held, number of management actions, number of people trained, and number of reports and publications relative to the project.

People can also be used as a measurement for managing projects. When speaking of people, companies generally mean peoples actions. The metrics can include the measurement of how many training programs were completed, how many trainees had passed the program, and how many trainees obtained a job due to the training. Furthermore, companies can track the progress of employees career progress by setting goals and meeting with employees at certain set times to make sure that the employees are meeting their goals or if additional training is necessary.

Who Should Be Involved in Metric DevelopmentIt is essential to appoint certain individuals in the involvement of developing metrics. All individuals that are involved should be well versed in the companys goals, mission, business acumen, and processes. For all projects, a Project Manager should be designated to lead the process in development. The Project Manager should be appointed by corporate. The Project Manager is also responsible for communicating these metrics and adequately informing the stakeholders of all the planning and how they may be affected by the metrics. In addition, the team members assigned to work on the project should also be involved in developing metrics. The team members should consist of individuals that are experienced in their line of work and can offer insight of what types of metrics to use and when to measure.