Key Global Indicator (KGI)
Key Global Indicator (KGI) is a term that refers to pre-set indicators of process objectives (goals) that indicate what should be achieved by a process (they define an objective). Used metrics must be measurable (see SMART). The term KGI comes from the methodology of COBIT.
Key Goal Indicators (KGI) are parameters that state how well services or processes achieve the customers' goals. In this sense, the output of the service provider is differentiated from the outcome obtained by the service users. Typical examples of service and business indicators are response time, process duration, process cost and service availability while some parameters related to KGIs could be financial return, satisfaction, reputation and trust. [Fugini & Siadat, 2010] KGI is an indicator to measure the degree of goal accomplishment. For instance, an indicator to define the accomplishment of a goal, such as "by how may percent" for an abstract goal, "increasing sales," is KGI. By defining "accomplishment" with specific indicators and target values, we can evaluate the actual degree of accomplishment of strategic goals. Based on such evaluation, we can conduct improvements and management.
The COBIT Framework expresses the objectives for IT in terms of the information criteria that the business needs in order to achieve the business objectives, which will usually be expressed in terms of:
- Availability of systems and services
- Absence of integrity and confidentiality risks
- Cost-efficiency of processes and operations
- Confirmation of reliability, effectiveness and compliance.
The goal for IT can then be expressed as delivering the information that the business needs in line with these criteria. The degree of importance of each of the above information criteria is a function of the business and the environment the enterprise operates in. Key Goal Indicators should not be vague, but measurable as a number or percentage. These measures should show that information and technology are contributing to the mission and strategy of the organization. Because goals and targets are specific to the enterprise and its environment, many Key Goal Indicators have been expressed with a direction, e.g., increased availability, decreased cost. In practice, management will have to set specific targets which need to be met, taking into account past performance and future goals.
Here are some examples of IT goals that can be measured using these key indicators:
- Achieving targeted return on investment or value-for-money (VFM) benefits;
- Improved performance management;
- Reducing IT risks;
- Percentage of SLAs reviewed in the period agreed upon;
- Productivity improvements;
- Integrated supply chains;
- Standardized processes;
- Increased provision of services;
- Attracting new customers;
- Creation of new service delivery channels;
- Availability of bandwidth, computing power and IT delivery mechanisms;
- Compliance with customers’ requirements and expectations within budget and on schedule;
- Cost per customer served;
- Compliance with industry standards