Annexes

Understanding Key Performance Indicators (KPIs)

Key Performance Indicators (KPIs) are often overused, poorly defined, or mistaken for metrics. In many organisations, the term “KPI” has lost meaning due to indiscriminate use. This chapter brings precision back to the concept, positioning KPIs as the critical lenses through which we observe the health and direction of performance.

This is arguably the most misunderstood level of the SPARA Measurement Chain — and the most important to get right. KPIs turn conditions (CSFs) into visibility. They make performance observable, actionable, and governable.

What Are KPIs Really For?

A Key Performance Indicator is not simply a measure — it is a deliberately chosen signal that tells us how well a Critical Success Factor is being fulfilled. KPIs provide focus. They highlight what matters most and allow stakeholders to monitor progress, surface problems, and make informed decisions.

The ‘key’ in KPI matters. Not all indicators are equal. A KPI must:

Reflect a priority area of performance
Be traceable to an objective via a CSF
Be capable of triggering action or review

✅ Example:

CSF: Incidents must be automatically routed to the correct resolver group. KPI: % of incidents resolved by first assigned resolver group.

This KPI gives us a clear, actionable view of whether the CSF is working as intended.

What KPIs Are Not

To clarify their purpose, it’s important to differentiate KPIs from other forms of measurement. KPIs are not:

Raw metrics (“Number of incidents logged” is data, not a KPI)
Volume indicators without context (“Page views” means little unless tied to a goal)
Lagging-only reflections (“Customer churn” may be important but doesn’t show early signs of failure)
Outputs misused as outcomes (“Number of reports published” doesn’t show whether they were useful)

A good KPI shows us something we can manage, govern, and act on — not just admire.

Guardrails for Designing Good KPIs

SPARA defines several criteria to help distinguish good KPIs from superficial indicators:

1. Traceable
Every KPI must link clearly to a CSF and ultimately to an objective.

2. Actionable
If a KPI worsens, someone should care — and be able to intervene.

3. Predictive or Diagnostic
A good KPI can either signal future success/failure or help diagnose underlying causes.

4. Normalised
Use rates or ratios where possible to enable comparison and benchmarking.

5. Targetable
Each KPI should support clear, realistic targets that align to desired outcomes.

Where KPIs Fit in the Chain

KPIs are the visible expression of performance logic. They are the middle layer that makes success conditions measurable. If CSFs are the blueprint, KPIs are the sensors.

Together, a KPI suite:

Tells a cohesive story of performance
Enables real-time and trend analysis
Drives accountability at team and leadership level
Feeds dashboards, governance packs, and AI models

Types of KPIs

KPIs can vary based on level, purpose, and data maturity. SPARA categorises them as follows:

Strategic KPIs

Show progress against high-level goals. Often fewer in number, but highly visible.

Example: % of strategic programmes delivering planned outcomes

Tactical KPIs

Monitor service or process effectiveness across departments or functions.

Example: % of changes with no incidents raised post-implementation

Operational KPIs

Track daily or weekly performance of repeatable activities.

Example: Average resolution time for P2 incidents

Experiential KPIs

Capture perception or behavioural data. Often user-reported.

Example: % of users satisfied with the onboarding experience

Example KPI Suite for a Service Improvement Objective

Objective: Improve knowledge base usage to reduce L1 tickets.

CSF 1: Knowledge articles must be easily searchable and relevant
- KPI: % of resolved tickets linked to a knowledge article
CSF 2: Users must be aware of self-service options
- KPI: % increase in self-service portal traffic
CSF 3: Articles must be reviewed regularly
- KPI: % of articles updated within the last 6 months

This shows how KPIs make CSFs observable and objectives progressible.

Common KPI Pitfalls

Many organisations struggle with:

KPI overload – hundreds of indicators with no priority or ownership
Vanity metrics – tracking what looks good, not what drives change
Misalignment – KPIs that don’t link to strategy or critical outcomes
Static design – KPIs that don’t evolve with service maturity or context

SPARA prevents this by using the Measurement Chain to enforce logic, purpose, and discipline.

Summary: Why This Matters

KPIs are the decision triggers of modern performance management. Poorly chosen KPIs result in:

Misdirected governance
False confidence or blind spots
Missed opportunities for improvement

Well-designed KPIs ensure that performance becomes visible, not just reported. They enable governance to ask the right questions — and teams to answer them with evidence.

The next chapter will explore Metrics — the foundational data that feeds KPIs and supports operational insight.