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Making Fact based Decisons in IT what to consider

September 30, 2008

Metrics

A useful tool for presenting measurement information to managers at different levels is the “metric.” This tends to be an on-screen presentation of trend charts, typically showing the four to ten most important measurements for the viewing decision maker. Often, the charts represent an aggregation of other measurements so that the decision maker can “drill down” to greater levels of detail if needed. For example, the CEO may start by looking at a metric reflecting measurements across the entire organization. If the CEO notices a significant trend change in one of the measurements, say sales revenue has dropped this month, additional detail is available on that chart. By drilling down, an additional, more detailed screen would show sales revenue for each of the business units, indicating whether sales were slightly lower across the board or one particular business unit had a bad month.

When businesses look at metrics at the highest level, it is important to understand that IT value will be only one of a number of measurements that will be displayed. The hierarchy of metrics shown in Figure. In Figure , the IT measurements are reporting basic operational performance. It is noteworthy that although IT value is not identified explicitly, it is implicit in each of the six metrics identified:

1. System Performance is the percentage of time that systems, applications, and infrastructure services are available when needed and are performing at levels required by the users. Clearly, service level agreements (SLAs), where they exist, would form a large part of the reporting under this heading. In the interests of decision making, only the most important applications and infrastructure systems should be included. Availability and performance should be reported on a trend basis with indications of agreed significant thresholds.

2. IT Support Performance is the percentage of time that IT support staff and organizations are available to help with problems and new requests, and perform at the level necessary to address these requests properly. Again, note that availability and performance are measured and reported separately. The IT support performance measurements are based on a combination of service desk and customer care metrics.

3. The Partnership Ratio is an index of the percentage of business projects and initiatives in which IT Providers have a partnership or leadership role with the business early in the strategic planning process. Interestingly, although IT Providers can report the number of projects that they are involved in, only the business can provide the total number of projects — presumably, there will be projects that IT Providers do not know about because they are not involved.

4. Service-level Effectiveness is a measure of IT customer satisfaction based on surveying the customer. This metric reflects the possibility that system performance may be satisfactory but the business may not be happy because the SLAs are inadequate in breadth or depth. This may be due to changes in the needs of the business or simply because the SLAs were not adequately defined in the first place.

5.The New Projects Index is a measure of IT’s ability to deliver new projects that meet the agreed requirements on time and on budget. Clearly, the business also has a role to play in this.

6.The IT Total Cost Ratio is a measure of the total cost of IT, directly and indirectly, as a percentage of revenue and expenses.

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