Data, measures, metrics, KPIs, analytics

Data, metrics, analytics, KPIs... all these words are referred to the same concept but are not the same.

Let's start explaining one by one.

For data we can find many meanings: "Facts that can be analyzed or used to gain knowledge or make decisions", "just information", "Information in a form suitable for storing and processing by a computer", etc... Therefore, people and companies are full of data. We don't choose or pick the data. This data can have different priority depending on how is analyzing it.

A metric is a quantitative assessment of statistics that describes what is the progress or the success of something. A metric is what you measure. And what you measure is what you manage to.

In a software development project, a metric can be the completion of a specific feature. Or, for instance, a business metric will indicate what are the revenues reached in the last quarter. Unlike the data, we can choose the metrics.

A KPIs (Key Performance Indicator) is a quantifiable value used to track progress against set goals. KPIs provide direction to achieve expected results and help the business to make better decisions. I want to highlight the expression "against set goals" because it's the key difference between metric and KPI. Usually, KPIs are the most significant metrics that we manage. 

"Not every metric is a KPI, but every KPI is a metric"

When we set a goal we are establishing a value reference. This value reference will indicate if the business or the goal are going well or we have to change something to success. Setting a reference/goal doesn't mean to record something in a stone. We could adjust the reference later according we are getting more information or we change our strategy.

Coming back to the metrics, I'd like to suggest four principles to choose the best ones:

  • The metric has to be comparable against other value.
  • The metric has to be understandable for all the main stakeholders.
  • The metric has to be a ratio or an index.
  • And most important, the metric can trigger actions.
Last, what are the analytics? I found in this link a good comparison for both terms. Metrics are the ‘what,’ and analytics are the ‘so what?’ Metrics are the numbers that we track, and analytics implies analyses and decision making.

Thanks for reading :)

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