What is metrics (indicator) and design aspects of it

Overview

Any BI application's main role is to show information based on some measurements. These measurements are called as metrics. E.g. you measure how much sale you have done, so total sales revenue is your metrics. In this article the focus is on such different types of metrics and when and how to use a proper one in the application.

Details

Most of the time when you are designing BI apps, you have few things to consider. Like what type of indicator you will choose to convey the knowledge in your app.
There are three main types of metrics that you can use in your business intelligence application:
1. Leading Indicators: These are the indicators usually used to predict or to forecast type of activity. Let us see where we can use it practically. Consider we have a requirement to create BI apps for sales team. Now they want to measure activities like how many touches are required to convert a prospect into a customer. This is a leading indicator as you are not reporting on the activity happened, it is showing how many calls/activities you need to do to achieve you goal.
2. Lagging Indicators: These are the indicator reporting the activity happened in the past. E.g: If you want to measure any business financial amounts like last year’s sales revenue, growth etc.Generally these indicators will show where you stand currently using the past data. Sometime people refer to these indicators as Key result indicators as well. As they work on the result or activity happened in the past and report the result on it.
3. Key Performance Indicators (KPI): These indicators are different somewhat like leading indicator however some definite things around it have. Like leading indicator will say 10 calls needed to convert a prospect to the customer, lagging will say you have made 5 calls. Now with respect to quota or requirement and time you don't necessarily know whether it is good or bad or you are on the right track. KPIs are used for that. They show your performance in terms like you are on track or behind or ahead. E.g. If you want to see how is sales revenue with respect to sales quota

Conclusion

A proper metrics is used based on which application you are designing for. If it is a BAM-Business Activity Monitoring then Lagging Indicators or KPI will convey the information. If it is sales forecasting then leading indicators can be used.