May 18, 2015

Using KPIs & Balanced Scorecards to Manage Requirements

In this article, we’ll take a look at how your team can manage requirements using proven management techniques such as KPIs (key performance indicators) and balanced scorecards.

Introducing KPIs

KPIs help you determine how well you’re doing in achieving a specific goal. These metrics measure the performance of activities that are essential towards reaching your objectives, so it’s very important that you choose them wisely since not everything you do is directly related to your progress towards a specific outcome.

One of the most important criteria in selecting KPIs is that they are based on realistic outcomes which allow you to measure them in concrete and quantitative terms.

For example, increased customer satisfaction can be measured in terms of the number of customer support requests that remain unresolved by the end of a given period.

When comparing the number of unresolved support requests between two equal periods of time (e.g. this month vs previous month), if you see a decline then you can logically infer that more customers are satisfied with the level of service your company is providing them.

KPIs often work in tandem. In the example given above, it would be more meaningful to compare the number of support requests with the total number of requests lodged over a given period of time and express the difference as a percentage. This makes the KPI being measure more accurate and, in fact, percentages and ratios are often the most favoured type of KPIs used.

What’s a balanced scorecard?

A balanced scorecard helps any team break down a project, or even an entire organisation’s operations, into separate, smaller and more manageable areas.

A basic scorecard usually takes into consideration the four most important aspects of any kind of business endeavour:

  1. Operations – These include the different activities a team does in order to reach a certain goal, in software development that could include requirements writing, sprint planning, testing and development.
  2. Finances – Obviously, everything would grind to a halt if there weren’t enough money to lubricate the company’s wheels. This is where you draw up your budget.
  3. Human Resources – The people working on your project are the most important asset you have and key to completing on schedule and according to expectations. Work hours, workloads and deadlines and their effect on your team are all things that fall under this category.
  4. Customer Development – Basically everything that involves the end-users, from recruiting people to act as beta users, to collecting feedback, and eventually marketing, selling and releasing updates.

In this more advanced version, the balanced scorecard is more often called a strategy map.

In summary

Managing requirements based on KPIs and balanced scorecard is a sound approach that can help a team understand better the type of the results their efforts are generating.

KPIs give you a clear indication of the progress you are making towards achieving your goals, wheres balanced scorecards or strategy maps complement them by helping you become more away of the various areas where your team can have an impact on the project or the organisation as a whole.

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