Evaluation is the process of assessing and ascertaining the applicability, progress, usefulness, utility, or value of something such as an investment, program, or Process. It helps establish the value of investments, programs, and processes among other things. The primary purpose of an evaluation is to make decisions.
Evaluations are used extensively in business to establish the progress toward or the attainment of an objective. They are also used to identify areas of improvement, gaps in capability, overlap in functionality, the effectiveness of investments, and the efficiency of operations. From evaluating new technologies to the value of investments, the status of programs, and the efficiency of processes, evaluations are critical to the success of an organization.
Evaluations are a critical part of the monitoring and control function of Governance, Risk, and Compliance. They are used in conjunction with root cause analysis and Metrics to make management decisions. An Evaluation uses metrics to reveal symptoms which are analyzed for to find the root cause of problems and opportunities for improvement.
Evaluations are also key to strategy. It helps ascertain the attainment of goals and objectives set through the strategic planning process. It also provides guidance on the reasons for a strategy not achieving its objectives and provides invaluable assistance in course correction.