The document discusses 7 truths about metrics and how they are often misused. Metrics should align with and derive from business goals, but often managers choose metrics first before understanding needs. This can lead to unintended consequences, like Continental Airlines rewarding pilots for reducing fuel which hurt customer satisfaction. The document advises that metrics should reflect goals and processes, not measure individuals, in order to optimize organizational performance.
Join Decision Management Solutions, Velocity Business Services and Datarobot as we discuss the importance of operational decisions, industrialized predictive analytics and business learning in creating a predictive enterprise.
Addressing the big lie of strategic planning - or is it the big flawJAYARAMAN IYER
Â
I enjoyed listening to Roger Martin. They are fundamental to our understanding of Strategy. Although I keep quoting Deming “It isn’t necessary to change, survival is not mandatory’”, considering the NPAs and the corporate falling like 9-pins I urge Corporate to action rather than inaction, “Change, change, change Corporate, change the denominator.”.
How to Measure What Matters:
What is a KPI and what makes a good one?
Who should be involved in data driven decision making in your business?
What tools do you need to start being data-driven?
What should you measure?
Next Steps & Best Practices
Join Decision Management Solutions, Velocity Business Services and Datarobot as we discuss the importance of operational decisions, industrialized predictive analytics and business learning in creating a predictive enterprise.
Addressing the big lie of strategic planning - or is it the big flawJAYARAMAN IYER
Â
I enjoyed listening to Roger Martin. They are fundamental to our understanding of Strategy. Although I keep quoting Deming “It isn’t necessary to change, survival is not mandatory’”, considering the NPAs and the corporate falling like 9-pins I urge Corporate to action rather than inaction, “Change, change, change Corporate, change the denominator.”.
How to Measure What Matters:
What is a KPI and what makes a good one?
Who should be involved in data driven decision making in your business?
What tools do you need to start being data-driven?
What should you measure?
Next Steps & Best Practices
Analytics in Financial Services: Keynote Presentation for TDWI and NY Tech Co...Fitzgerald Analytics, Inc.
Â
Keynote Presentation Given in New York City on March 30th, at a joint event of The Data Warehousing Institute (TDWI) and the New York Technology Council. This keynote presentation by Jaime Fitzgerald focused on "Bridging the Gap" between business goals in the data and analytic enablers of achieving these goals.
We conducted a ground-breaking survey of the UK’s data and business professionals to get a snapshot of the state of the world of data, uncover some of the issues facing the industry and get a sense of the changes on the horizon. The results were enlightening, and in some cases, very surprising.
Giving Organisations new capabilities to ask the right business questions 1.7OReillyStrata
Â
This presentation takes the seminal work structured analytic techniques work pioneered within US intelligence, and proposes adaptions and simplifications for use within commercial enterprises
Gramener is always on the lookout for talent who like to work with numbers and aspire to be the Algorithm Translators.
This deck is presented to cohorts at IIM's and other B School as part of Gramener company overview session.
FP&A: Innovations in Financial Analytics to Support Organic Growth and Busine...James Myers
Â
Despite recent advances in cloud computing and related technologies, many organizations are still far from where they want and need to be in leveraging data to drive performance improvements. Companies still often apply intuition, rather than hard data, when making strategic and operational decisions. Even when companies define performance metrics, many define vanity as opposed to actionable metrics. Discover new ways to leverage your data to drive shareholder value. In this webinar, you will see how companies are utilizing financial analytics to drive a competitive advantage.
Lean Analytics for Intrapreneurs (Lean Startup Conf 2013)Lean Analytics
Â
Lean Analytics for Intrapreneurs workshop by Alistair Croll, based on Lean Analytics book and research done with dozens of large organizations on how they're using data, analytics and Lean principles to innovate and improve.
Harvesting the value from Advanced AnalyticsJaap Vink
Â
In general, Analytics help you leverage investments that you have done already in your IT investments, on ERP, on CRM systems, on sales
force automation systems, and on all
the data collection that you put in
place.
Unfortunately, reality isn’t that
straightforward. It’s still a struggle
for most companies to drive valuable
insight into the data they have.
The Fundamentals of Business Intelligence is a comprehensive overview of data and data analysis. The guide explains the types of data available to businesses and how these data types work with one another to provide insights to large companies. Look beyond the hype of big marketing to understand the role of all types of data and understand what big data is in the right context.
An it manager’s new best friend the company balance sheet it-toolkitsIT-Toolkits.org
Â
Hey IT manager, how is that company that you are working for currently doing? Yeah, yeah – I know that all of the press releases that your management keeps putting out say that things have never been better and the internal emails that you get from the big guy say the same thing. However, how are things really going? It turns out that you can answer this question if you know how to read your company’s balance sheet…
Measuring and managing customer profitability in the big-data era. How to capitalize on the opportunity.
In today's era of Big Data and related technology, the benefits of "customer-centricity" are within our reach. Analysis of Big Data sources helps to better understand customer needs, preferences, attitudes, expectations, sentiments, and buying behavior. Yet to achieve this potential, organizations need to understand and apply the classic but essential concepts of customer profitability, customer lifetime value (CLV), and customer value management analytics. Join us for an event on how to approach this challenge.
When linked with customer profitability metrics, these insights enable more profitable decisions in product design, sales, marketing, customer care, loyalty management, and risk management. This session will help attendees capitalize on this opportunity. We will cover the classic high-impact basics of measuring and managing customer profitability, customer lifetime value (CLV), as well as how to use new Big Data insights to get more value from these efforts. This tutorial which cover the topic in 5 practical steps:
1. Introduction to Customer Profitability Analytics: What is customer profitability analysis, why is it so valuable, and what are the key concepts and methodologies used to measure customer profitability, customer lifetime value (CLV), and related metrics?
2. High-Impact Use-Cases of Customer Profitability Analytics: What are the key ways customer profitability analytics is used enhance results? We will describe the highest-value ways to use customer profitability metrics to improve business results, with concrete examples in each of the following categories:
o Customer Lifetime Value optimization ("CLV")
o Customer loyalty and retention
o Share of wallet maximization
o Marketing ROI
o Impact of Customer Service, Customer Experience, and Customer Satisfaction on Profit
o Product design, pricing, promotion, and positioning
o Allocation of resources (capital, budget, HR, etc)
o Risk management
3. How to Calculate Profitability at the Customer Level : We will walk through the algorithms you need to use to turn raw data into customer profitability metrics, and share tips on how to customize them depending on your business. Related applications will also be covered, such as how to use the same algorithms to measure profit per household, salesperson, distributor, or other entity relevant to how your business makes money.
4. Data & Tech Requirements
5. Using Big Data to Maximize ROI on Customer Analytics: What are the top 5 opportunities to use Big Data to increase the benefits achieved through customer profitability analytics and related initiatives?
Speakers: Jaime Fitzgerald, Founder and Managing Partner, Fitzgerald Analytics, and Konrad Kopczynscki, Director at Fitzgerald Analytics. Konrad and Jaime have applied customer profitability methodologies to dozens of clients.
7 steps to business and it alignment it management templatesIT-Toolkits.org
Â
The goal of perfect alignment is unachievable because of the dynamic nature of business. Every organization operates in an ecosystem and is affected by the forces at play in it. Economy, industry, competitors etc. are all players in this ecosystem who are continuously evolving. Similarly, knowledge and tools – such as information technology – are also continuously changing. To remain competitive i.e. maintain differentiation, every organization must adapt in response to the actions and activities of others in its ecosystem. Organizations that do not adapt lose their competitive edge over time and disappear.
Analytics in Financial Services: Keynote Presentation for TDWI and NY Tech Co...Fitzgerald Analytics, Inc.
Â
Keynote Presentation Given in New York City on March 30th, at a joint event of The Data Warehousing Institute (TDWI) and the New York Technology Council. This keynote presentation by Jaime Fitzgerald focused on "Bridging the Gap" between business goals in the data and analytic enablers of achieving these goals.
We conducted a ground-breaking survey of the UK’s data and business professionals to get a snapshot of the state of the world of data, uncover some of the issues facing the industry and get a sense of the changes on the horizon. The results were enlightening, and in some cases, very surprising.
Giving Organisations new capabilities to ask the right business questions 1.7OReillyStrata
Â
This presentation takes the seminal work structured analytic techniques work pioneered within US intelligence, and proposes adaptions and simplifications for use within commercial enterprises
Gramener is always on the lookout for talent who like to work with numbers and aspire to be the Algorithm Translators.
This deck is presented to cohorts at IIM's and other B School as part of Gramener company overview session.
FP&A: Innovations in Financial Analytics to Support Organic Growth and Busine...James Myers
Â
Despite recent advances in cloud computing and related technologies, many organizations are still far from where they want and need to be in leveraging data to drive performance improvements. Companies still often apply intuition, rather than hard data, when making strategic and operational decisions. Even when companies define performance metrics, many define vanity as opposed to actionable metrics. Discover new ways to leverage your data to drive shareholder value. In this webinar, you will see how companies are utilizing financial analytics to drive a competitive advantage.
Lean Analytics for Intrapreneurs (Lean Startup Conf 2013)Lean Analytics
Â
Lean Analytics for Intrapreneurs workshop by Alistair Croll, based on Lean Analytics book and research done with dozens of large organizations on how they're using data, analytics and Lean principles to innovate and improve.
Harvesting the value from Advanced AnalyticsJaap Vink
Â
In general, Analytics help you leverage investments that you have done already in your IT investments, on ERP, on CRM systems, on sales
force automation systems, and on all
the data collection that you put in
place.
Unfortunately, reality isn’t that
straightforward. It’s still a struggle
for most companies to drive valuable
insight into the data they have.
The Fundamentals of Business Intelligence is a comprehensive overview of data and data analysis. The guide explains the types of data available to businesses and how these data types work with one another to provide insights to large companies. Look beyond the hype of big marketing to understand the role of all types of data and understand what big data is in the right context.
An it manager’s new best friend the company balance sheet it-toolkitsIT-Toolkits.org
Â
Hey IT manager, how is that company that you are working for currently doing? Yeah, yeah – I know that all of the press releases that your management keeps putting out say that things have never been better and the internal emails that you get from the big guy say the same thing. However, how are things really going? It turns out that you can answer this question if you know how to read your company’s balance sheet…
Measuring and managing customer profitability in the big-data era. How to capitalize on the opportunity.
In today's era of Big Data and related technology, the benefits of "customer-centricity" are within our reach. Analysis of Big Data sources helps to better understand customer needs, preferences, attitudes, expectations, sentiments, and buying behavior. Yet to achieve this potential, organizations need to understand and apply the classic but essential concepts of customer profitability, customer lifetime value (CLV), and customer value management analytics. Join us for an event on how to approach this challenge.
When linked with customer profitability metrics, these insights enable more profitable decisions in product design, sales, marketing, customer care, loyalty management, and risk management. This session will help attendees capitalize on this opportunity. We will cover the classic high-impact basics of measuring and managing customer profitability, customer lifetime value (CLV), as well as how to use new Big Data insights to get more value from these efforts. This tutorial which cover the topic in 5 practical steps:
1. Introduction to Customer Profitability Analytics: What is customer profitability analysis, why is it so valuable, and what are the key concepts and methodologies used to measure customer profitability, customer lifetime value (CLV), and related metrics?
2. High-Impact Use-Cases of Customer Profitability Analytics: What are the key ways customer profitability analytics is used enhance results? We will describe the highest-value ways to use customer profitability metrics to improve business results, with concrete examples in each of the following categories:
o Customer Lifetime Value optimization ("CLV")
o Customer loyalty and retention
o Share of wallet maximization
o Marketing ROI
o Impact of Customer Service, Customer Experience, and Customer Satisfaction on Profit
o Product design, pricing, promotion, and positioning
o Allocation of resources (capital, budget, HR, etc)
o Risk management
3. How to Calculate Profitability at the Customer Level : We will walk through the algorithms you need to use to turn raw data into customer profitability metrics, and share tips on how to customize them depending on your business. Related applications will also be covered, such as how to use the same algorithms to measure profit per household, salesperson, distributor, or other entity relevant to how your business makes money.
4. Data & Tech Requirements
5. Using Big Data to Maximize ROI on Customer Analytics: What are the top 5 opportunities to use Big Data to increase the benefits achieved through customer profitability analytics and related initiatives?
Speakers: Jaime Fitzgerald, Founder and Managing Partner, Fitzgerald Analytics, and Konrad Kopczynscki, Director at Fitzgerald Analytics. Konrad and Jaime have applied customer profitability methodologies to dozens of clients.
7 steps to business and it alignment it management templatesIT-Toolkits.org
Â
The goal of perfect alignment is unachievable because of the dynamic nature of business. Every organization operates in an ecosystem and is affected by the forces at play in it. Economy, industry, competitors etc. are all players in this ecosystem who are continuously evolving. Similarly, knowledge and tools – such as information technology – are also continuously changing. To remain competitive i.e. maintain differentiation, every organization must adapt in response to the actions and activities of others in its ecosystem. Organizations that do not adapt lose their competitive edge over time and disappear.
This AI business checklist is a tool that provides an easy-to-use structure for strategic discussions, goal setting and critical decisions in your leadership team. A structure that you can use as a business leader to guide your decisions towards getting full value out of AI technology in your organisation. It is meant to be a tool that you can return to to guide your progress.
Business Intelligence is more than a fad. But to embrace it requires a significant commitment.
Every competitive business recognizes the power in knowledge. The definition of “knowledge” is both subjective and obscure. All too often, a business is unable to succinctly express what information it wants and what it will do with this information. Many earnest efforts are made to develop effective data reporting resources. The most common mistakes are costly, time consuming and wasteful.
We conducted a groundbreaking survey of the UK’s data and business professionals to get a snapshot of the state of the world of data, uncover some of the issues facing the industry and get a sense of the changes on the horizon. The results were enlightening, and in some cases, very surprising.
Find out:
Why nearly a third of IT Directors feel their organisation uses data poorly
What the hybrid data manager of the future will look like
Why understanding customer behaviour remains the holy grail for so many
We conducted a survey of the UK's data and business professionals to get a snapshot of the state of the world of data, uncover some of the issues facing the industry and get a sense of the changes on the horizon. The results were enlightening, and in some cases, very surprising.
Crowe Horwath Jamaica (www.crowehorwath.com.jm) is one of the largest public accounting, consulting, and advisory firms in Jamaica . Crowe uses its deep industry expertise to provide audit services to public and private entities while also helping clients reach their goals with tax, advisory, risk and performance services.
Crowe Horwath Jamaica serves clients worldwide as an independent member of Crowe Horwath International, one of the largest global accounting networks in the world. The network consists of more than 200 independent accounting and advisory services firms in more than 130 countries around the world.
IT Service Management (ITSM) Model for Business & IT AlignementRick Lemieux
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Today’s multi-faceted business world demands that Information Technology provide its services in the context of a fully integrated corporate strategic model. This transformation becomes possible when IT evolves from its technological heritage into a Business Technical Organization, or an “internal service provider.” This paper describes how the itSM Solutions reference model integrates five widely used service management domains to create a powerful model to guide IT in its journey into the business leadership circle.
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Â
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Attending a job Interview for B1 and B2 Englsih learnersErika906060
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It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
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Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
Skye Residences | Extended Stay Residences Near Toronto Airportmarketingjdass
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Experience unparalleled EXTENDED STAY and comfort at Skye Residences located just minutes from Toronto Airport. Discover sophisticated accommodations tailored for discerning travelers.
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What is the TDS Return Filing Due Date for FY 2024-25.pdfseoforlegalpillers
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It is crucial for the taxpayers to understand about the TDS Return Filing Due Date, so that they can fulfill your TDS obligations efficiently. Taxpayers can avoid penalties by sticking to the deadlines and by accurate filing of TDS. Timely filing of TDS will make sure about the availability of tax credits. You can also seek the professional guidance of experts like Legal Pillers for timely filing of the TDS Return.
Buy Verified PayPal Account | Buy Google 5 Star Reviewsusawebmarket
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Looking to buy verified PayPal accounts? Discover 7 expert tips for safely purchasing a verified PayPal account in 2024. Ensure security and reliability for your transactions.
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Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
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Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
Website – www.pmday.org
Youtube – https://www.youtube.com/startuplviv
FB – https://www.facebook.com/pmdayconference
Putting the SPARK into Virtual Training.pptxCynthia Clay
Â
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
Memorandum Of Association Constitution of Company.pptseri bangash
Â
www.seribangash.com
A Memorandum of Association (MOA) is a legal document that outlines the fundamental principles and objectives upon which a company operates. It serves as the company's charter or constitution and defines the scope of its activities. Here's a detailed note on the MOA:
Contents of Memorandum of Association:
Name Clause: This clause states the name of the company, which should end with words like "Limited" or "Ltd." for a public limited company and "Private Limited" or "Pvt. Ltd." for a private limited company.
https://seribangash.com/article-of-association-is-legal-doc-of-company/
Registered Office Clause: It specifies the location where the company's registered office is situated. This office is where all official communications and notices are sent.
Objective Clause: This clause delineates the main objectives for which the company is formed. It's important to define these objectives clearly, as the company cannot undertake activities beyond those mentioned in this clause.
www.seribangash.com
Liability Clause: It outlines the extent of liability of the company's members. In the case of companies limited by shares, the liability of members is limited to the amount unpaid on their shares. For companies limited by guarantee, members' liability is limited to the amount they undertake to contribute if the company is wound up.
https://seribangash.com/promotors-is-person-conceived-formation-company/
Capital Clause: This clause specifies the authorized capital of the company, i.e., the maximum amount of share capital the company is authorized to issue. It also mentions the division of this capital into shares and their respective nominal value.
Association Clause: It simply states that the subscribers wish to form a company and agree to become members of it, in accordance with the terms of the MOA.
Importance of Memorandum of Association:
Legal Requirement: The MOA is a legal requirement for the formation of a company. It must be filed with the Registrar of Companies during the incorporation process.
Constitutional Document: It serves as the company's constitutional document, defining its scope, powers, and limitations.
Protection of Members: It protects the interests of the company's members by clearly defining the objectives and limiting their liability.
External Communication: It provides clarity to external parties, such as investors, creditors, and regulatory authorities, regarding the company's objectives and powers.
https://seribangash.com/difference-public-and-private-company-law/
Binding Authority: The company and its members are bound by the provisions of the MOA. Any action taken beyond its scope may be considered ultra vires (beyond the powers) of the company and therefore void.
Amendment of MOA:
While the MOA lays down the company's fundamental principles, it is not entirely immutable. It can be amended, but only under specific circumstances and in compliance with legal procedures. Amendments typically require shareholder
1. 7 Dirty Little Truths About Metrics
The workable, practical guide to Do IT Yourself
Page 1 of 4
Vol. 5.33 • August 20, 2009
7 Dirty Little Truths About Metrics
By Hank Marquis
Hank is EVP of Knowledge Management at Universal Solutions Group, and Founder and Director of NABSM.ORG. Contact Hank by email at
hank.marquis@usgct.com. View Hank’s blog at www.hankmarquis.info.
Everyone knows metrics measure things. What most do not understand are the dirty little
truths about metrics -- what gets measured is what gets done, and metrics drive both
good and bad behavior. Put another way, people do what you pay them to do.
The IT Infrastructure Library™ or ITIL® mentions metrics frequently -- Critical Success
Factors (CSF) and Key Performance Indicators (KPI).
The lesson is simple -- metrics must derive from, and align with, business goals and strategies.
Metric selection should occur only after understanding the needs the metric addresses.
However, most managers do it backwards. They have metrics they want to see, and design
processes around them. This is usually a sure path to failure. This common problem is not unique to
IT, and examples of misguided metrics abound inside and outside of IT.
A classic example used by MIT is that of Continental Airlines recovering from bankruptcy in the 1990’s. Continental had
to cut costs, and because fuel costs were high, management created a metric to track its usage. They used this metric to
reward pilots for reducing fuel consumption. As expected, pilots acted to earn their reward -- they skimped on air
conditioning and flew more slowly. Management got what it seems they wanted, and fuel consumption fell. Unexpectedly
however, their customer satisfaction and on-time performance also fell, and their most valuable frequent flyer customers
moved on to competitors.
An IT example I recently came across was a metric about aging trouble tickets. Management established a metric to
monitor ticket age. However, many tickets did not close within the established timeframe. The Service Desk manager met
the metric by closing and reopening the tickets -- in effect, faking the numbers. But management got what they seemed to
want -- a nice report showing that everything was fine.
Clearly, in each of these cases, the true goal of management was not achieved. In neither case did management really
desire the outcome realized. However, failure to follow a rigid model for the creation of metrics invariably results in
failure, and a failure to lead is not a failure of the led.
Following I describe the real purpose of metrics, and explain how to create or select metrics for IT that produce the results
you really desire.
Misguided Metrics
Most managers believe they know what a metric is and how to use them, however, given the number of examples like the
last two, it seems many really don't.
One analogy I often use to explain the function of metrics is that of an automobile trip. Using the trip analogy, the goal
might be to get across the desert. Goals are extending, and should grow an organization. In this analogy a goal is the
destination. CSFs are things you have to do to achieve the goal, CSFs are attainable. One CSF from our analogy might be
to avoid overheating. A KPI is a measure of some property of a CSF. The KPI in this analogy might be water temperature,
as expressed by a temperature gauge. By watching the water temperature gauge we have an indication if we are likely to
meet the requirement to avoid overheating, and if we do not overheat, we stand a good chance of driving across the desert.
If we were not crossing the desert in a car then our CSF and KPI would probably be quite different. For example, if we
http://www.itsmsolutions.com/newsletters/DITYvol5iss33.htm
8/20/2009
2. 7 Dirty Little Truths About Metrics
Page 2 of 4
were flying a plane across the dessert instead of driving a car through it, we would probably also want to know about air
speed and altitude, and water temperature might not be required.
KPI metrics (like water temperature) derive from CSFs (like avoiding overheating). CSFs derive from goals (like driving a
car across the desert). Goals derive from current process maturity and business/mission requirements. Every goal will
probably have unique CSFs, which in turn probably have unique KPIs.
The issue with metrics is that management often confuses process and performance, mixing up goals, CSFs and KPIs. In
effect, management asks staff to fly an airplane across the desert using altitude and air speed as metrics. However,
knowing they need to drive a car because (contrary to management assumptions) they don't actually have a plane, staff
must creatively interpret data to fit into required management metrics. We wind up with meaningless reports that deliver
no relevant information.
Misguided metrics led Continental pilots to drive away their best customers -- and to do so under management orders!
Misguided metrics are also responsible for most of the reporting shenanigans going on right now in virtually every
enterprise and service provider IT organization.
Here are 7 dirty little truths about metrics...and 7 things you can do to clean up yours.
Truth #1
What gets measured is what gets done. Regardless of what you say or what you might consider to be common sense,
people will do whatever they believe required to meet the metric. Thus, metrics have to reflect a complete understanding
of what you really want to get done.
Start with an understanding of the business or mission, then identify process customers and key stakeholder interests
before selecting metrics. The actual metric is one of the last things the process manager should settle upon.
Unfortunately, the most common reality is selection of metrics before establishing the process, or worse, choosing metrics
because the tools currently in use offer them.
Truth #2
Metrics drive both good AND bad behavior. People do what you pay them to do, so choose carefully. People will do
whatever they believe required to meet required metrics (see Truth #1) especially if there are performance rewards for
attaining the metrics. The metrics you choose will drive your organization, as they should.
However, failure to think outside of the immediate process or activity creates well-meaning but poor metrics. For example,
a "punitive" focus on ticket age without "forgiveness" as to the mitigating reasons can result in fear of potential retribution
of a "bad score" on a report. The organization will act accordingly to avoid potential retribution.
Truth #3
Failure to align with Vital Business Functions (VBF) can lead you and your team astray. Failure to align your metrics
with VBF results in metrics that measure the wrong things for the wrong reasons. Every single metric in IT needs to trace
all the way back to what the ITIL calls a VBF.
In other words, nothing should be done in IT that is not part of a solution for something in the business. You have to start
with a mission statement for the process, work through goals and objectives and then create your metrics. Only this
process of aligning your process to the VBF, and then measuring to ensure the process meets the requirements of the
VBF, is effective.
Truth #4
Metrics do not get better with age -- they often become obsolete. As the organization matures, metrics usually must
change to keep pace. Good metrics reflect the reality of the current process or activity. As staff gains skills, you normally
set new goals with new objectives. This also means you must refine or replace your metrics (CSF and/or KPI) to properly
reflect attainment of your new goals.
Unfortunately, most companies settle on metrics for the sake of metrics. Senior management has a handful of “favorite
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3. 7 Dirty Little Truths About Metrics
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metrics” they have “used for years.” In these unfortunate organizations, instead of customer satisfaction, attainment of
the metric becomes the pursuit of the entire organization. Usually the result is as you might now expect -- failure.
Truth #5
The real purpose of metrics is to help you make better decisions. The objective of a metric is to operate as a gauge, or
indicator of process operation. Metrics are to aid in making good decisions, they exist to identify gaps in skills or resources
required to attain the goal. Good metrics focus on the issues that affect the team, and that put attainment of the process
goal or objective into jeopardy.
Truth #6
Effective metrics do not measure people -- they measure teams and processes. The real purpose of metrics is to help your
make better decisions (see Truth #5) and to not hold people accountable, or punish them. Most traditional (poor) IT
metrics exist to keep track of people and find out who is responsible when something goes wrong.
Metrics become a "blame game" (see Truth #2.) Good metrics focus on the attainment of process objectives and goals. In
this way, the focus of a good metric is on the team and accomplishing the mission. Individual performance metrics tend to
cause the measured person to focus on doing what they think management wants, as reflected in the metric (see Truth
#1.)
Truth #7
Good metrics help optimize the performance of the entire organization. Metrics should be accurate, timely, and actionable.
You need sound metrics at all levels to prevent metrics that report nothing relevant and do not contribute to decision
making.
Think of your metrics reporting as an opportunity to learn about your process. Keep the list of metrics small, and focused.
Get team buy-in for team level metrics. With continuous evaluation and re-evaluation with your team, you can optimize
your process. When multiple or interdependent processes follow this model the results are amazing.
Summary
To summarize, many metrics in use in IT today are at best worthless, and at worst counterproductive. The following
represents a simple checklist for creating metrics that matter:
Align with Vital Business Functions. Regardless of the IT activity, you need to make sure your metrics tells you
something about the VBF that depends on what you are measuring.
Keep it simple. A common problem manager fault is overloading a metric. That is, trying to get a single metric to
report more than one thing. If you want to track more than one thing, create a metric for each. Keep the metric
simple and easy to understand. If it is too hard to determine the metrics, people often fake the data or the entire
report.
Good enough is perfect. Do not waste time polishing your metrics. Instead, select metrics that are easy to track,
and easy to understand. Complicated or overloaded metrics often require excessive work, usually confuse people, and
do not get used. Use a tool like the Goal Question Metric (GQM) model to clarify your metrics.
Use metrics as indicators. Key Performance Indicators are metrics! A KPI does not troubleshoot anything, but
rather the KPI indicates something is amiss. A KPI normally does not track or show work done. Satisfying several
KPI normally means satisfying the related CSF. The KPI is an indicator, a metric designed to alert you that CSF
attainment might be in jeopardy, that is all. A good metric (KPI) is just an excellent indicator of the likelihood of
attaining a CSF.
A few good metrics. Too many metrics, even if they are effective, can overwhelm a team. For any processes 3 to 6
CSFs are usually all that is required. Each CSF might have 1 to 3 KPI. This means most teams and individuals
might have just 2-5 metrics related to their activities or process. Any more and either the metrics won't get reported,
or the data gets faked. Too many metrics transforms an organization into a reporting factory -- focusing on the wrong
things for the wrong reasons. In either case, the usefulness of the metric is compromised.
Beware the trap of metrics. Failure to follow these guidelines invariably results in process problems. Look around
your current organization.
How many reports are actually used to help make decisions? Don't assume, ask around, you will probably be surprised. It
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