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⭐ Core Definition: Performance metric

A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it engages. KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.

Often success is simply the repeated, periodic achievement of some levels of operational goal (e.g. zero defects, 10/10 customer satisfaction), and sometimes success is defined in terms of making progress toward strategic goals. Accordingly, choosing the right KPIs relies upon a good understanding of what is important to the organization. What is deemed important often depends on the department measuring the performance – e.g. the KPIs useful to finance will differ from the KPIs assigned to sales.

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👉 Performance metric in the context of Cost

Cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this case, money is the input that is gone in order to acquire the thing. This acquisition cost may be the sum of the cost of production as incurred by the original producer, and further costs of transaction as incurred by the acquirer over and above the price paid to the producer. Usually, the price also includes a mark-up for profit over the cost of production.

More generalized in the field of economics, cost is a metric that is totaling up as a result of a process or as a differential for the result of a decision. Hence cost is the metric used in the standard modeling paradigm applied to economic processes.

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In this Dossier

⭐ Core Definition: Performance metric
👉 Performance metric in the context of Cost
Performance metric in the context of Active users
Performance metric in the context of Figure of merit
Performance metric in the context of Benchmarking

Performance metric in the context of Active users

Active users is a software performance metric that is commonly used to measure the level of engagement for a particular software product or object, by quantifying the number of active interactions from users or visitors within a relevant range of time (daily, weekly and monthly).

The metric has many uses in software management such as in social networking services, online games, or mobile apps, in web analytics such as in web apps, in commerce such as in online banking and in academia, such as in user behavior analytics and predictive analytics. Although having extensive uses in digital behavioural learning, prediction and reporting, it also has impacts on the privacy and security, and ethical factors should be considered thoroughly. It measures how many users visit or interact with the product or service over a given interval or period. However, there is no standard definition of this term, so comparison of the reporting between different providers of this metric is problematic. Also, most providers have the interest to show this number as high as possible, therefore defining even the most minimal interaction as "active". Still the number is a relevant metric to evaluate development of user interaction of a given provider.

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Performance metric in the context of Figure of merit

A figure of merit (FOM) is a performance metric that characterizes the performance of a device, system, or method, relative to its alternatives.

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Performance metric in the context of Benchmarking

Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are quality, time and cost.

Benchmarking is used to measure performance using a specific indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others.

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Performance metric in the context of "Cost"

⭐ In the context of economics, a 'cost' as a performance metric is considered…

⭐ Core Definition: Performance metric

👉 Performance metric in the context of Cost

Performance metric in the context of Active users

Performance metric in the context of Figure of merit

Performance metric in the context of Benchmarking