Sorry, I thought we already had a page on this topic. If you know what it is, please change this page to a simple pointer to that page. -- DavidCary
What exactly is it that we want to measure ?
Measuring the wrong thing, at best, is a waste of time. At worst, it distracts people from doing the RightThing -- instead, they do stuff to improve their numbers that is actively harmful.
I am reminded of a place that measured "Income" as its primary indicator for the health of the operation.
This encouraged the sales guys to do weird stuff and accept "promised sales" as a number.
In the end, it turned out that "number of things sold" against "number of things built and shipped" modified by "number of things returned" was a much better metric set.
In fact, this isn't actually the most bizarre "metric" I've seen used, but if illustrates the point.
More Subtle - Measure to Support a Goal
A measurement, or more usually, a series of measurements is only of value if it supports a goal. Too many "metrics" programs focus on identifying the "right" measures, with no thought given to what is to be determined and how the measures can be evaluated to make the determination. Measures are not an end in themselves.
See MeasureTheRightThing, HowDoYouMeasureMaintenance, http://www.prosci.com/metrics.htm SoftwareMetrics, PerformanceIndicators, WhateverGetsMeasuredGetsOptimized