This section offers some suggestions on how to formulate indicators. For practical reasons, suggestions will include the steps required to formulate SMART indicators.

First of all, avoid reinventing the wheel. Considerable efforts to formulate indicators are being undertaken in the context of the Millennium Development Goals in general and of many different areas of interest like Poverty Alleviation, Economic Development, Governance and sectors like Health and Education. The world-wide-web gives access to many of these efforts and may therefore be great help in a first orientation.

Secondly, attempts to formulate a complete indicator straight away seldom results in good quality indicators. Therefor, below, based on the characteristics of (SMART) indicators, a stepwise approach is being worked out. It is good practice to go step by step and worry about the precise formulation of the indicator at a later stage.

Since indicators for planning, monitoring or evaluation serve slightly different purposes, clarity on the status of the project or programme in the life cycle is useful before starting to formulate the indicators. During the formulation of indicators, the following steps may be of help:

1. WHAT

Brainstorm on the variables, which may provide means to measure change in the objectives or phenomena. During the brainstorm minimum or standard quality of the phenomenon is taken into account (what and how good)

2. HOW MUCH

To define the magnitude of the change we want to achieve

3. WHO

In order to clarify who belongs to the target group. Often specific information on who belongs to the target group is necessary, for example in cases when gender specificity is required.

4. WHERE

This step includes specific information on the intervention area, if this does not yet become clear from step 3.

5. WHEN

This step includes the definition of the timeframe.

The brainstorm on variables (step 1) may well lead to a number of different options. Especially when indirect variables are identified check on validity, accuracy, sensitivity and cost-effectiveness and decide which one(s) will best serve the information needs of the involved managers. Cost-effectiveness, of course, also needs to be considered for direct indicators and may well be a reason to choose for indirect indicators.