Value Metrics Matter: Focusing on Business Value Add

For years, companies have talked about and measured IT performance metrics. But are your IT value metrics measuring the right things? Find out in this post.

For years, companies have talked about and measured IT performance metrics. In fact, in a previous blog post entitled “How do you measure your IT department’s performance?” we highlighted the fact that in a 2014 study from Continuity Software, only 56% of respondents said that they were tracking software performance, and of those, a much smaller number had invested in analytical tools to help them measure their performance.

Taking this to the next level, the question that many CIOs and executives are asking these days surrounds whether their organizations are measuring the right things. According to an article out on CIO Online entitled “Are your IT performance metrics measuring the right things?” “Almost all IT service levels or metrics measure the performance of functional disciplines,” including items like:

  • Server uptime and reliability
  • Network uptime and reliability
  • Application performance and scalability
  • User ease of access

While these metrics are useful for the team internally, they are not really meaningful to the business, unless they aren’t working properly, in which case “down time” can have a material impact on the business. Simply stated, these metrics are not aligned with the key business objectives of the company.

Internally IT organizations should implement and use a variety of metrics to track performance, with particular focus on Planning & Forecasting, Monitoring & Control, and Performance Improvement and Benchmarking.

Questions That Lead to Value Metrics

Externally (customer facing), the key questions that CIOs should constantly be asking themselves include:

  • Are our technology platforms contributing significant business value?
  • Are our incremental technology investments focused on delivering enhanced business value?

Whenever possible, technology platforms and solutions should be designed to enable and support the business, and efforts should be made to ensure that these platforms and solutions never stand in the way of enabling the business to efficiently and effectively perform its many functions. Enhanced business value can take many forms, including but not limited to:

  • Automating a previously manual process
  • Reducing the number of steps required to perform a task
  • Expanding client access to information using more channels (e.g. mobile)
  • Enhancing security protocols and encryption techniques to secure confidential information

In considering the questions posed above, focus your efforts on shifting your key performance indicators and metrics so that you can evaluate how IT can best serve its clients, whether internal or external. In The Ultimate IT Dashboard: Experts Answer by Smartsheet, Chris Curran of PwC discusses the various layers of value metrics that will truly point to IT performance:

Service Levels (internal)

When you consider the internal end user experience, you might look at ease of use, the various touchpoints it takes to complete an administrative function and how many departments need to be involved. You may also look at average time to close helpdesk tickets and the number of bug fix requests.

The Link Between IT and the Business (internal & external)

Whether an IT improvement adds real business value is not that difficult to calculate. Consider the following business value metrics for IT:

  • Did our most recent improvement help the organization to save time and make us more efficient?
  • Were we able to automate a previously manual process that was prone to errors?
  • Were we able to make information available to clients that was previously inaccessible to them except through a call with a service representative?
  • Did we create competitive advantage with a new product or feature in the markets where we compete? Did we literally build something of commercial value that generates revenue?

Whether the metrics are soft or hard, determining whether real value has been added is straightforward enough to determine. Certain metrics might include specific integration points such as the system performance of a company-wide CRM. For life sciences companies, it would involve the functioning and performance of Quality systems that are in place and are so essential to the business in a regulated environment. And it could also include a goal around improved customer service that relies on technology for quick and accurate response and tracking.

Project Level (internal)

Given the investment surrounding IT related projects, companies must be able to gauge value and the risk involved. According to Carol J. Skarlat, CIO of BAI, “Having a three-year technology roadmap with capital and expense estimates can also help the business prioritize investments.” We would go one step further and suggest that estimates also be performed to determine estimated return on investment. To the extent that a minimum 1X ROI cannot be achieved that the investment not be made in the first place. By looking at projected spend and return by project, business and IT leaders alike can partner to ensure the best utilization of finite investment dollars, with a key focus on tackling those efforts that will yield the greatest ROI first.

High performing IT teams understand the importance of delivering continued business value, utilizing business value metrics that track and report performance and return, and creating strong partnerships with their business counterparts to ensure complete alignment and focus around business priorities and strategies. Want to enjoy a lasting career in an IT leadership position? Align yourself and your team with business leaders, and focus your efforts on continuously delivering business value through your technology initiatives and investments!

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