The Case for Business-Driven Metrics
The Evolution of IT Departments: In a previous life, I was VP of Research for a leading Canadian IT research firm, Info-Tech Research. In this role, I had the privilege of talking to lots of CIOs all over the world and we developed a maturity scale for IT departments based on our conversations and the problems CIOs were facing.
At the beginning of the IT evolution were IT departments that we referred to as firefighters. In these groups, process maturity tended to be quite low, uncontrolled changes were the rule and IT staff spent their days dealing with broken systems and unhappy users.
One step up from the firefighter group were the service managers. In this group of IT departments, maturity had been reached in key processes like change management, incident management and problem management. Peace ruled, although business users still carped about the pace of change and a lack of innovation.
At the top of the heap were IT departments that had transcended beyond service management and had introduced innovation processes and agility into the mix. These people were focused on the business and how IT can contribute to revenue growth and cost reduction.
Evolution and Measurement: The way in which IT departments measured success and communicated to business clients varied by stage. The firefighter group often had little in the way of measurement and suffered as a result. There was no way of measuring continuous improvement and little or no fact-based communications with the client. The more mature service management group tended to offer metrics based on available technical measurements. Service level agreements were often in place, but were based on metrics that were only well-understood by the IT department and had little to do with the goals and objectives of the business. In the highest stage of evolution, where IT and the business were partners, metrics had evolved to where they were relevant to the business and easily understood by business managers.
Why Business-Driven Metrics? The prime advantage of expressing IT metrics in a relevant way to the business is alignment. If business and IT teams are driving towards the same or linked goals, then we avoid wasted effort and conflict. For example, if a business relies on two systems, but only one is mission critical, then linking metrics to the business would lead to more focus and energy being placed on the mission critical system.
How Do I Develop Business-Driven Metrics? There are several steps to developing business-relevant metrics. The first step is to identify all IT stakeholders and get out and interview them. Find out what their responsibilities are. Identify their short and long-term goals. Ask them how IT impacts their ability to delivery on their goals and objectives.
The second step is to synthesize these requirements into a set of business-oriented metrics that are actually doable. This involves transitioning from “gotware” (i.e. the statistics that an IT department can easily measure) into “needware” (i.e. the metrics that the business wants to see). Part of this may involve combining several detailed metrics into a calculated metric. For example, a recent client of ours hosted e-Commerce sites for several hundred companies. The customer service executives wanted a dashboard where they could look at their client list and quickly get a read on whether the client was happy or sad. A dashboard featuring colours (green for good, yellow for needing attention, red for needing remedial work) was asked for. The tricky question for IT and the business to agree on was the way in which each colour was to be calculated. The basis of the metric was going to be the severity and frequency of incidents with each client, but what was the definition of green, yellow and red? The good news? The discussion around this metric was very enlightening for the CIO because it established the crucial nature of IT services and how sensitive the business was to even a few critical outages. It allowed the CIO to make the case to senior management for more resources to bolster systems availability.
The third and final step in the metrics journey is to implement the metrics that have been agreed on with the business. This involves prioritizing each one, deciding on the appropriate communications vehicle (e.g. dashboard, report, infographic), deciding on an implementation platform, finding resources and scheduling the implementation.
How do I get started? As you can tell from the descriptions above, these three steps are non-trivial and take a lot of dedication and effort. A good way to approach this job is to kick it off with a workshop. Quick Intelligence has the resources and ability to help with this. Over a period of four days, we can help you quickly define business-driven metrics, figure out how to present them, how to source them and how to implement them. At the end of the workshop, you have a prioritized list of business-driven metrics, prototypes of dashboards and reports, a list of projects and an implementation road map. As a side benefit of running this as a workshop, you’ll also get your team involved in defining the metrics and will gain an appreciation of your business clients and how they depend on IT to meet their goals and objectives. It’s a great team-building exercise.
If you’d like to find out more, contact email@example.com.