Common Terms and Definitions

Terms common to performance management

ROI = Return on Investment
Return on Investment is a little confusing. Sometimes it is used to mean a specific financial measurement while other times it is used as a collective term ...
Sun, 18 Oct, 2015 at 10:31 AM
EVA = Equity Value Analysis
Each of the traditional financial measures has its respective strengths and weaknesses. As a result, most companies require that more than one measure be pr...
Sun, 18 Oct, 2015 at 10:31 AM
IRR = Internal Rate of Return
Internal Rate of Return (IRR) is the most sophisticated of the above metrics and often is used to analyze large, multi-year investments. IRR equals the perc...
Sun, 18 Oct, 2015 at 10:33 AM
NPV = Net Present Value
The NPV of a project is simple, the benefits minus the costs, and is expressed in dollar terms.  Not unlike a profit and loss statement, NPV tells you the m...
Sun, 18 Oct, 2015 at 10:35 AM
Payback Period
Payback period is important when time and cash flow are an issue. Simple payback period shows how long it will take for an investment to show a profit. It i...
Sun, 18 Oct, 2015 at 10:36 AM
TCO = Total Cost of Ownership
TCO refers to the deployment and operational cost of a system for a specified period of time, usually 3 years. The basic idea is to highlight one TCO as opp...
Sun, 18 Oct, 2015 at 10:38 AM
KPI = Key Performance Indicator
A KPI is a way to internally and empirically measure the performance of your Agreement (including your performance and that of your Co-Party(ies)).  Typical...
Sun, 18 Oct, 2015 at 10:38 AM
SLA = Service Level Agreement
An SLA is a way to empirically measure contractual performance and Co-Party(ies) commitments. Typical types include Spend, Cost, Quality, Delivery, Innovati...
Sun, 18 Oct, 2015 at 10:39 AM
KPI or SLA Impact
An Impact is the financial, numerical, emotional and/or other quantifying result of a KPI or SLA that has either met or failed to meet the performance targe...
Sun, 18 Oct, 2015 at 10:40 AM