TAILIEUCHUNG - Diagnostics vs. Key Measures

The company’s key measures included Combined Ratio (a measure of profitability) and policies in force (units sold) and pure premium (cost per unit). In addition to these measure, I used many internal measures to assess individual, team and process effectiveness Over the years, I’ve found it very helpful to think of two flavors of measures. 1) Diagnostics: Diagnostics measure internal processes. Managers need a set of diagnostics to accurately assess their team’s effectiveness. Diagnostics are tools to help pinpoint where process improvement is necessary and measure the effectiveness of those solutions. . | Diagnostics vs. Key Measures By Chris Garson Copyright 2012 Chris Garson Smashwords Edition In business every department has a set of goals and measure separate from the core business measures. For example I managed software development for an insurance company. The company s key measures included Combined Ratio a measure of profitability and policies in force units sold and pure premium cost per unit . In addition to these measure I used many internal measures to assess individual team and process effectiveness Over the years I ve found it very helpful to think of two flavors of measures. 1 Diagnostics Diagnostics measure internal processes. Managers need a set of diagnostics to accurately assess their team s effectiveness. Diagnostics are tools to help pinpoint where process improvement is necessary and measure the effectiveness of those solutions. The economic impact of diagnostic is often more indirect than direct 2 Key measures Key measures asses core business results or processes and typically have a direct economic impact on results. I d guess that 90 of the measurements produced at the departmental level are diagnostics and 10 are key measures. Distribute diagnostics reports to the team. Distribute key measures to the business. Here s an example. Test issue defect rate and time to resolve test issues are typical QA diagnostics used to guide test automation decisions assess test plan effectiveness and improve developer tester handoffs. The average project testing cost expressed in dollars or man-hours is a key measure that directly affects a product s profitability. If improve the test issue defect rate has no impact on the average project testing cost then we have not improved performance on a key business measure. Your goal should always be improving key measures. Diagnostics are a tool to help you focus your .

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