What are the four basic types of metrics that can be used to measure IT performance?

Benchmarking is the competitive edge that allows organizations to adapt, grow, and thrive through change. Benchmarking is the process of measuring key business metrics and practices and comparing them—within business areas or against a competitor, industry peers, or other companies around the world—to understand how and where the organization needs to change in order to improve performance. There are four main types of benchmarking: internal, external, performance, and practice.

1. Performance benchmarking involves gathering and comparing quantitative data (i.e., measures or key performance indicators). Performance benchmarking is usually the first step organizations take to identify performance gaps.

What you need: Standard measures and/or KPIs and a means of extracting, collecting, and analyzing that data. 

What you get: Data that informs decision making. This form of benchmarking is usually the first step organizations take to identify performance gaps. 

2. Practice benchmarking involves gathering and comparing qualitative information about how an activity is conducted through people, processes, and technology. 

What you need: A standard approach to gather and compare qualitative information such as process mapping.

What you get: Insight into where and how performance gaps occur and best practices that the organization can apply to other areas.

3. Internal benchmarking compares metrics (performance benchmarking) and/or practices (practice benchmarking) from different units, product lines, departments, programs, geographies, etc., within the organization. 

What you need: At least two areas within the organization that have shared metrics and/or practices. 

What you get: Internal benchmarking is a good starting point to understand the current standard of business performance. Sustained internal benchmarking applies mainly to large organizations where certain areas of the business are more efficient than others.

4. External benchmarking compares metrics and/or practices of one organization to one or many others. 

What you need: For custom benchmarking, you need one or more organizations to agree to participate. You may also need a third party to facilitate data collection. This approach can be highly valuable but often requires significant time and effort. That’s why organizations engage with groups like APQC, which offers more than 3,300 measures you can use to compare performance to organizations worldwide and in nearly every industry.

What you get: An objective understanding of your organization’s current state, which allows you to set baselines and goals for improvement. 

Internal performance benchmarking is often a good place to start, but the biggest benefit comes from external benchmarking that examines both performance and practice. You get maximum impact when you look at the world beyond your own desk, department, and company. APQC members can use Benchmarks on Demand tool and find best practices in our Resource Library. 

Ultimately, benchmarking is about being humble enough to admit that others are better at something and being wise enough to learn how match—or even surpass—them at it. You’ll never gain that knowledge if you don’t look at the world beyond your own office, department, or company. In the words of Peter Drucker, “What a business needs most for its decisions—especially its strategic ones—are data about what goes on outside it. Only outside a business are there results, opportunities, and threats.”  

Get started today with APQC’s Benchmarking Basics Collection. This collection contains the main items you will need to start a benchmarking initiative including templates, tools, a glossary, APQC's Process Classification Framework and Benchmarking Code of Conduct, and articles that explain the steps required for successful benchmarking. 
 

There are five specific types of measures that have been identified, defined and will be applied throughout Iowa state government: input, output, efficiency, quality and outcome.

Input

Input measures  monitor the amount of resources being used to develop, maintain, or deliver a product, activity or service.  Examples include:

• Money spent on equipment
• Number of employee hours worked
• Number of vehicles
• Facility costs
• Total operating expenditures
• Rental fees
• Number of full-time employees

Output

Output measures monitor “how much” was produced or provided.  They provide a number indicating how many items, referrals, actions, products, etc. were involved.  Examples include:

• Number of permits issued
• Number of pavement miles resurfaced
• Number of people trained
• Number of water leaks fixed
• Number of cases managed
• Number of arrests made
• Number of documents processed
• Number of clients served

Efficiency

Efficiency measures are used to monitor the relationship between the amount produced and the resources used.  This means that efficiency measures are created by comparing input and output, see expressing measures with two or more variables.  There are two general types of efficiency measures: unit cost and productivity.  Unit cost is a comparison of an input to an output (i.e. resources used/number produced).  Productivity is a comparison of an output to an input (i.e. number produced/resources used).  Examples include:

Unit Cost

• Cost per license issued
• Cost per employee taught
• Cost per lane-mile paved
• Cost per client served
• Cost per document

Productivity

• Licenses processed per employee-hour
• Units produced per week
• Students taught per instructor
• Cases resolved per agent
• Calls handled per hour

Quality

Quality measures are used to determine whether customer expectations are being met. These expectations can take many forms, including: timeliness, accuracy, meeting regulatory requirements, courtesy, and meeting customer needs.  The expectations can be identified as a result of internal or external feedback.

The comparison of outputs is often used to create measures of quality.  It may be important to identify certain aspects (aspects / total outputs) about the services, products or activities produced by an organization that are important to its customers.  This comparison of specific outputs to total outputs is used to create measures of accuracy, timeliness and to determine the extent regulatory requirements are met.  Quality measures can also be derived from the evaluation of customer feedback data.  See expressing measures with two or more variables.

Examples include:

Timeliness

• Busy signal rate
• Percent of drivers licenses issued within one hour.

Accuracy

• Percent of applications requiring rework due to internal errors.
• Taxpayer error rate on tax returns.

Requirements

• Percent of wells meeting minimum water quality requirements.
• Percentage of clients that rated themselves as successfully rehabilitated.

Meeting Customer Needs

• Percentage of customers that rated service good, very good or excellent.

Outcome

Outcome measures are used determine the extent to which a core function, goal, activity, product, or service has impacted its intended audience.  These measures are usually built around the specific purpose or result the function, goal, service, product, or activity is intended to deliver or fulfill.  An outcome measure should show progress towards or achievement of agency mission or goals.  See expressing measures with two or more variables.  Examples include:

• Highway death rate
• Crime recidivism rate
• Percent of persons able to read and write after attending a remedial
• education course
• Percent of entities in compliance with requirements
• Percent of clients rehabilitated
• Percent of cases resolved

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