The document discusses key performance indicators (KPIs) for measuring IT performance. It argues that KPIs should focus on a few essential metrics that are critical to progress on key business objectives like growth, health, and recovery. Performance is defined as progress toward measurable targets using chosen methods. Good KPIs quantify how well IT can provide services, be the preferred partner, and adapt to changing priorities and demands. Areas to measure include resources, responsibilities, support, and supervision. The best KPIs are drawn from operational data already being collected on agreements, expectations, ambitions and priorities.

1. Demystifying IT KPIs
An archestra notebook.
© 2013 Malcolm Ryder / archestra

2. Finding the Keys
Although "measuring IT" has an enormous literature of references, the
sheer volume of that reference information can create the most difficult
challenge to the practice.
Why? Because, with more and more and more points to consider, the real
primary question - "how much measurement is enough" -- may not be
confidently answered.
However, there is universal consensus that the "trees in the forest" are
always key performance indicators, or KPIs.
The idea of "key" suggests that there is a process of filtering out indicators
that don't matter as much, leaving a manageably fewer number that matter
a lot. What is the logic of this filtration?
The filtering can take place on several different terms, as follows.

3. Defining Performance
To begin with, if you have a consistent definition of "performance", you can
discover, borrow, and/or invent KPIs that will make sense in your shop whether or
not they make sense elsewhere.
To best use the idea of performance, emphasize a context-neutral definition, such
as follows (and note that there are two parts included).
Performance is a measure of the degree to which progress has been made:
(a.) relative to a measurable target,
(b.) with the method that was chosen to cause the progress.
This neutrality makes it clear that performance can be identified on many different
levels and at many locations of activity, without being mistaken for quality, risk, or
other characteristics.
The importance of that observation is that although a single target can be the
highest point of interest, performance tends to involve multiple perspectives.

4. The Semantics of What Matters vs. What Counts
TARGET X
Usual impact
Actual impact
(lower)
Actual impact
(higher)
Usual impact
Method 1
Method 2
In this hypothetical scenario,
we see a high performance BY
Method 1 OF effort TO Target
X, and a low performance BY
Method 2 OF effort TO Target
X. But meanwhile the absolute
performance of Method 2 is
higher than that of Method 1.

5. Enough is enough
To avoid having to investigate and track unnecessary indicators, think of
"Key Performance" indicators, not key "Performance Indicators".
A key performance is an effort formed from:
• the amount of impact necessary by each of…
• the smallest number of things known together to …
ESCAPE VELOCITY:
• ordinarily suffice for …
FUEL THRUST TIME
• creating the required levels of progress towards …
X
Y
Z
• a defined target.
(minimum amounts
of fewest elements)

6. Criticality
Defined neutrally as above, the idea of performance is meaningless until
both a measurable target has been defined, and a method of proceeding has
been specified.
This dual aspect is crucial to acknowledge because, in real life, we “perform”
with what we currently do have. That is, we presently pursue goals with
things that we actually already have, not with the imaginary. This is the
objective basis of performance.
That said, one of the main reasons for measuring performance is to identify
whether there is a need to do things differently. If we are disappointed, that
finding can mean changing the current actuals. But if we are already
satisfied, it can also mean revising our ideals.
The ideals can be the methods used, or the target itself. Either way, the point
is to identify what must make the most important difference. To do that,
performance measurement needs to be objective, but the users of the
measurements may have an agenda.
The agenda may be to make decisions about methods, or to validate whether
targets are reasonable, or other reasons. Objective measurements can tell
multiple different stories. Yet even when they do, they need to maintain a
distinction between actuals and ideals, as well as current versus future.
Current
Future
Ideal
Often
dominates
targets
Goals with or
without
changes
Actual
Includes
most
indicators
Trend
without
changes

7. IT Measurement: The Who Cares Test
Business cares about IT only because IT is a way to accomplish more
labor both faster and affordably. (That accomplishment allows the
business to do other fairly important things.)
And, there is an IT organization only because bringing resources and
accountability under centralized management creates consistencies of
awareness -- consistencies that let the business approach obtain IT the
way a consumer approaches a preferred provider of services.
Because of that, most performance targets of the IT organization need
to quantify ambitions, agreements, or expectations about the following
IT abilities: to provide, to be preferred, and to keep up with varying
demand and priorities.

8. Recognizing Progress
So, what indicators about progress can be recognized?
Indicators are nothing but directions versus targets.
Directions are simple: moving away, moving towards, or standing still.
Indicators, whether historical or predictive, are usually quantitative
signals (even if only a binary on/off or true/false) that represent
direction.
But this is where another issue arises about how things are getting
done (not how much got done)...

9. Driving Progress
The practical perspective is that things get
done by selecting a resource (created by
combining people, processes and tools) -then giving that resource a responsibility
(consisting of a scope, direction and
priority) during a specified timeframe -- and
having them operate on the responsibility.
Too often, what is left out of the picture is
two other things: a support mechanism
adequate for the responsible resource, and
the impact of management supervision on
the responsible resource.
There are four big variables in the
formula for the activities that "drive"
progress towards a target:
• resource,
• responsibility (including timing),
• support,
• and supervision.
Logically, these variables are important
only in how they affect the major
abilities (provision, preference,
priorities) that describe the business
demand for IT.
Certain combinations of variables may
prove to be "critical" to success.

10. A Layered Performance Architecture
Overall, the “measurement" of the performance shows multiple layers
of indicators, about whether operations were:
• composed adequately,
• behaved correctly,
• and did the right kind of work,
• for the right reason.
But if you don't know what the right reasons are, the rest of it is
arbitrary.
The reasons are business-level objectives. (See examples following.)

11. GROWTH
Increase
Volume
Enter
Segment
Add
Partner
HEALTH
Update
Portfolio
Improve
Operation
Goals
RECOVERY
Lower
Costs
Restore
Brand
with generic
objectives
Modify
Agreements
Exit
Location
Plan
Enter
Segment
Improve
Operation
Restore
Brand
(example)
Preferred participants must now
provide according to priorities.

12. The Same Page
IT aligns with the business on how IT is to participate in the plan.
The business finds value in IT’s participation in several ways:
• immediate certainties (agreements)
• sustained attentiveness (expectations)
• long-term compatibility (ambitions)
This creates operational objectives for IT that require
appropriate organization, capabilities and staging (success
factors).

13. Performance logic:
The Same Page
Example: to hold the status of Preferred by the business, the IT organization can
bring higher-quality processes to the objective of enforcing Agreements.
As a way to assure the quality of the process, standards can be identified and
adopted.
• This means that, for example, a “pace of standards adoption” can be a target
for IT. Along the way, there can be indicators of progress towards that IT
target, which will be monitored.
By hitting its targets, IT can reinforce the opportunities that the business wants
for accomplishing a business objective such as “improved operations”.
• An opportunity can be specified as a target for Business. An example target
could be a level of “delivery speed”. Along the way there can be indicators of
progress towards that business target, which will be monitored.

14. Sourcing the KPIs
A generalized understanding of performance indicators becomes
practical when it is clear that relevant information is already being
collected.
The selection of information to use as indicators should be adequate
when drawn from the essential factors allowing operations to drive
progress:
• Resources
• Responsibility
• Support
• Supervision

15. Areas containing operational Targets that are often recorded for Objectives
Agreements
Expectations
Ambitions
Priorities
Initiative adoptions
Proposal approvals
Strategy alignment
Preferences
Process management
User requests by category
Roadmap milestones
Provision
Contract compliance
Delivery rates
R&D projects
Areas (that contain Indicators) addressing operational Targets
Of Provision
Of Preferences
Re: Priorities
Supervision
Monitoring results
Survey results
Reports published
Support
Infrastructure & staffing events
Standards adoption
Programs managed
Responsibility
SLA compliance
Services planning
Fulfillment rates
Resource
Assets managed
Training and IT Change
Assignments distributed
© 2013 Malcolm Ryder / archestra