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To the Point: Measure Value Through Metrics
IT Infrastructure, Operation and Data Center Summit April 9-10, 2013 Sheraton Sao Paulo WTC Hotel Sao Paulo, Brazil
Patricia Adams
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This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. 2013 Gartner, Inc. and/or its affiliates. All rights reserved.
Patricia Adams BDCL3_104, 4/13 Page 1
Regardless of the function within infrastructure and operations (I&O), metrics inundate our days, as we try to report and explain productivity in terms of numbers and measures that everyone can understand. But our focus on providing metrics to prove how successful we are has left a void in the value message of what the I&O is actually providing to the business. Although we believe the business should be impressed with how effective the incident management process is and marvel at the mean time to restore service (MTRS), reality shows us that most of the metrics we report on are of no interest to the business users, and don't really tell the story of what value the I&O is providing to the business. If we can take the time and push our existing approach to metrics aside, and follow some simple steps in how we report on our activity, we can begin to use metrics to show how the I&O is a true valued business partner.
Key Issue: How can I&O focus on using the right metrics? When examining a metric, or set of metrics, to be used to determine how a service, process or person is performing, we can use a simple balanced scorecard approach to ascertain at what level the metrics are being used. The graphic on this slide depicts four elements that can be used to assess the maturity of the metrics. The four dimensions are as follows: Manageable Can the I&O make changes to how it operates based on the outcome of the metric? Goal Aligned Is the metric aligned to any specific goals of the organization? Multidimensional Is the metric siloed, or does it span multiple groups and/or multiple dimensions of assessment to ensure quality ? Benchmarked Is the metric benchmarked, either internally or externally? Determining the level of maturity at which your organization is using metrics requires assessment against the balanced scorecard, with the ultimate goals of being able to answer yes across all four dimensions, ensuring that the metrics being used can assist in showing value. Action Item: Assess metrics being used against the scorecard to determine the maturity of those measures.
Key Issue: How can I&O focus on using the right metrics? Business metrics must align to each side of the triangle to understand the balance of efficiency, productivity and satisfaction. In determining which side to align business-oriented metrics to, the metrics should not be used twice to eliminate hyper-focus. Metrics may overlap, but having providing a balanced viewpoint requires that organizations interpret metrics appropriately as they align to business objectives. For example, a metric such as MTRS can show how efficient a team is being, but it can also be an indicator of how productive the team is as well. Deciding how to use the metric eliminates hyperfocus. This is also important because steering performance toward the wrong metric can have un-intended consequences. For instance, should you choose to use FCR as your main measure and the IT service desk staff knows that is how they are being measured, they may begin to spend too much time on one particular issue. Although this may certainly address that one issue, it can cause the backlog to become unmanageable, impact the MTRS, as well as the resolution time distribution, and more importantly, cause a dissatisfaction of other customers who may be waiting in the queue for assistance with their issue. Action Item: Establish metrics triangles to ensure you are using small subsets of metrics that work in unison to tell the story of performance for the I&O.
The build on this chart shows that when you just look at single metrics such as FCR, it doesn't tell the story of quality. By combining FCR along with the reopen rate of incidents you can better see if business users are getting a quality interaction.
The build on this chart shows that when you just look at single metrics such as FCR, it doesn't tell the story of quality. By combining FCR along with the reopen rate of incidents you can better see if business users are getting a quality interaction.
The build on this chart shows that when you just look at single metrics such as number of incidents, you are missing a balanced story. When you add in the MTRS you can better see that changes in the incident volume may have an impact on the service being provided. Metrics should never be looked at in a vacuum.
The build on this chart shows that when you just look at single metrics such as number of incidents, you are missing a balanced story. When you add in the MTRS you can better see that changes in the incident volume may have an impact on the service being provided. Metrics should never be looked at in a vacuum.
Key Issue: How can I&O focus on using the right metrics? To determine where to optimize investments in I&O, there must be goals and objectives linked to the identification of critical success factors (CSFs), corresponding key performance indicators (KPIs) and metrics that are explicitly mapped to the processes with the I&O. Without this alignment to IT and business goals and objectives, the process managers and the IT organizations will be unable to determine appropriate process investments and the achievement of improvements.
Together, the CSFs, KPIs and metrics serve as a definition of success. Too often, organizations rush to a variety of metrics without linking them to overall goals and CSFs. A CSF defines an action or result that must occur for the incident management process to be characterized as successful. KPIs are used to measure the achievement of a CSF and are selected to ensure efficiency and effectiveness. Without alignment to CSFs and KPIs, a metric is just a measurement and lacks, by itself, the context to assess achievement. It is important not to drown in a plethora of metrics.
Action Item: Review current metrics to determine whether they align to specific goals.
Key Issue: How can I&O focus on using the right metrics? The greatest challenge that I&O faces is how to define value in the services it provides. IT leadership will spend countless hours creating colorful charts, reports, scorecards and dashboards targeted at showing how much work is being performed by the team. The savvy team leader will pause before creating the barrage of reports and ask them to what purpose do all these reports serve? Even more important, with all the potential metrics available, how does one pick a set of metrics that will most accurately reflect how the team is performing. The greatest challenge comes in deciding which of the myriad of measures that can be reported up on and analyzed will more accurately reflect what business value the IT service desk is truly providing. Herein lies the concern with how the I&O organization can determine what will show true value to the organization. The answer, simply put, would be to ask the business how it would define value. This can be accomplished through the establishment of an IT governance team with respect to the IT service desk. The IT governance team, consisting of a variety of representatives from both the business and IT, enables the I&O to determine what shared and agreed goals will best describe performance. Action Item: Establish an IT governance team with the goal of establishing shared goals and CSFs for which specific metrics can be aligned.
Key Issue: How can I&O focus on using the right metrics? I&O organizations often engage Gartner and ask the question of how their operational metrics compare with other organizations, seeking some sort of benchmark. This is generally discouraged because one organization's incident mean time to restore service (MTRS) is 2.5 hours, which does not necessarily mean your organization should also be at 2.5 hours. This is due to a lack of standard methods by which a metric is produced. For instance, while everyone may agree about what MTRS means, it would also have to be agreed on as to what issues within an organization were classified as incidents and as well as an agreed on manner in how time is calculated. Because of that lack of consistency, benchmarking against other organizations becomes difficult. Additionally, given that metrics must be aligned to goals specified by your business, aligning to benchmarked metrics of another organization is not ideal. Ultimately, there are two methods by which an I&O might use benchmarking. If comparison with another organization is required, then find an organization that is as identical to your organization as possible and endure that metrics are defined and calculated in the same manner as yours. Alternately, choose to benchmark against your own performance. Determine baselines for your metrics, establish improvement targets, and continue to measure against your existing benchmark until reaching the target. If the target is tied to a CSF, then you will have not only improved your performance as compared with the previous benchmark, but also achieved an established CSF. Action Item: Use Gartner's IT key metrics data for metrics comparisons when available, but focus on establishing benchmarks within your own organization with targeted improvements that align to established CSFs.
This slide highlights that although I&O is always providing reporting as to its productivity, nowhere in our research do we see that CIOs are looking for that type of information. This means we need to get away from focusing on performance metrics.
This slide shows how a typical I&O department like the service desk tries to provide metrics with the business not being interested, because none of the presented metrics actually show what is happening in terms of business productivity.
Key Issue: How can I&O show the value of services provided through metrics? One of the key problems for the I&O is to prove that they are more than just a simple cost center to the business. The focus on metrics often provide proof of the productivity for I&O, but lack evidence of what value to the business has been gained. When presented at the executive level, a report showing how many incidents were handled and the associated MTRS does not translate into a business justification. If the I&O can approach their metrics and reporting form a slightly different perspective, then it can easily begin to paint a picture of true value provided to the business. For example, rather than reporting on how many incidents and how long it took to response to them, turn the report upside down and start to report on the impact of all those incidents. In our example, 100 incidents with an MTRS of two hours would equate to potential downtime of 200 hours. If, through effective incident management the I&O is able to reduce the MTRS of those 100 incidents by 25% to 1.5 hours, then the potential downtime would be reduced to 150 hours. In essence, the I&O has returned 50 hours of potential productivity to the business. When a cost basis is applied to productivity, the value can be put into financial terms, which anybody at the executive meeting or board level would appreciate. Furthermore, the I&O now has the ability to show that investments in the I&O group can yield increased productivity for the business. Action Item: Begin to look at the metrics being used and turn those metrics and reports into value statements that clearly define how the I&O impact business productivity.
Key Issue: How can I&O show the value of services provided through metrics? Gartner's ITScore for I&O (ITSIO) indicates the overall I&O maturity and the maturity of each of the four critical dimensions: people, process, technology and business management. The fact that metrics is a component of the I&O maturity across three of these dimensions (in process, people, and business management) shows the importance of mature definitions of metrics and robust measurement practices. ITSIO data available on metrics across these three I&O maturity dimensions, shows the following (N = 277): People = 1.94 Process = 1.68 Business Management = 2.31 The data shows the maturity of metrics across all the three dimensions are not more than 3, whereas, as per ITScore, maturity starts from level 3. In process dimension, it is the lowest scoring attribute and the value is significantly lower than 2, in the 1 to 5 scale. This analysis shows that, despite all the tools being deployed by several I&O teams to monitor I&O metrics, these are still in a nascent stage when it comes to maturity. Although the majority of organizations are very adept at collecting, reviewing and reporting metrics, metrics can provide very different perspectives of the I&O when used at the appropriate maturity levels. Action Item: Use Gartner's ITScore to assess the current maturity of your I&O and review research to help move up the maturity stack.
Business metrics must align to each side of the triangle to understand the balance of efficiency, productivity and satisfaction. In determining which side to align business-oriented metrics to, the metrics should not be used twice to eliminate hyperfocus. Metrics may overlap, but having providing a balanced viewpoint requires that organizations interpret metrics appropriately as they align to business objectives. For example, a metric such as MTRS can show how efficient a team is being, but it can also be an indicator of how productive the team is as well. Deciding how to use the metric eliminates hyper-focus. This is also important because steering performance toward the wrong metric can have un-intended consequences. For instance, should you choose to use FCR as your main measure and the IT service desk staff knows that is how they are being measured, they may begin to spend too much time on one particular issue. Although this may certainly address that one issue, it can cause the backlog to become unmanageable, impact the MTRS as well as the resolution time distribution, and more importantly, cause a dissatisfaction of other customers who may be waiting in the queue for assistance with their issue. Additionally, look to update existing dashboards with business value dashboards and work to utilize metrics that tell a story about the value of service, beyond just productivity and performance.
Tools such as ITSSM have criteria around metrics, reporting and analytics. But in the recent review of the tools, there was a definite lack of the vendors ability to show they understand this. Rather, they still provide hundreds of canned reports that focus solely on productivity.
This slide explains that when creating a dashboard, before putting information on it, you have to consider the context around that information. This will help better define what information might be appropriate for one dashboard versus another.
Key Challenges Executive dashboards focus on showing the operational and technical metrics (such as uptime) that generally justify the I&O organization's existence. Business value dashboards (BVDs) provide CIOs with a value-based view of how the I&O group impacts not only business productivity, but also the key initiatives that transform and grow the business. CIOs focus on reducing the cost of IT, because they can't clearly delineate the actual value of what IT brings to the business. I&O organizations that can't clearly demonstrate business value risk substantial budget reductions. Recommendations Take the current executive dashboard components, and transform them from productivity and performance statements into value statements. Gather the appropriate level of financial information needed to ensure that reporting that's focused on revenue, cost savings and spending is as accurate as possible. Understand the business goals from the CIO's perspective, and use the BVD to report on the metrics that will appeal most to the CIO.
This slide has animation to go through some sample visual dashboard to show what an organization might want to present to different business leaders. It is very visual, and any item on it can be further explored to get to the data behind the data.

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To the Point: Measure Value Through Metrics

To the Point: Measure Value Through Metrics

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