Metrics is defined as a measure used to quantify the achievement of an objective or consumption of a resource. It usually follows a universal standard in order to be understood and applicable across domains. Common examples of metrics are measuring the distance traveled in miles, consumption of fuel in gallons, and the mileage of a car in miles per gallon (MPG).
Metrics play a very important role in governance. The goal of metrics is to monitor, assess, and control the progress, performance, and achievement of a goal or objective. They gain meaning when used to establish a relationship between two countervailing things. For example, miles per gallon tells us the efficiency of an automobile where fuel consumed counteracts the distance traveled.
In business, metrics are primarily used to measure the effectiveness and efficiency of investment. For example, measuring the number of cars produced per hour gives us a measure of a factory's efficiency and revenue increase per additional dollar spent on IT helps assess the effectiveness of investment in information technology.
Often, trends make metrics more meaningful. They help establish progress or regress. An increase in revenue per FTE is an indication of improvement whereas a decrease indicates the opposite.
Metrics are an indicator of symptoms, not the underlying root cause. Their effective application requires a systematic, holistic approach to problem-solving. For example, a higher CPU utilization may not be an indicator of application performance but of an increase in application users. Therefore, metrics must be combined with root cause analysis.