What is a KPI and how should IT metrics be selected?

• A. KPI is a measurable performance indicator; select metrics aligned with business outcomes, that are specific, measurable, achievable, relevant, and time-bound
• B. KPI stands for Knowledge Process Initiative; choose random metrics
• C. KPI is only about financial metrics
• D. KPI is used for employee performance review only

Answer: (A)

A KPI is a measurable performance indicator tied to a business objective. When selecting IT metrics, you want indicators that show how IT contributes to business outcomes, not just what IT does. Using SMART criteria—specific, measurable, achievable, relevant, and time-bound—helps ensure the metrics are useful and comparable over time. In practice, map IT services to business goals such as availability, performance, cost, security, and user experience, and choose a concise set of metrics you can measure reliably and influence with action. Examples include system uptime, mean time to repair, cost per user, incident resolution time, and user satisfaction. Each metric should have a clear target and a dependable data source so progress can be tracked and improvements driven. This approach focuses on meaningful outcomes rather than random or purely financial metrics and shows how IT supports broader business objectives.