KPIs: Aligning Your IT and Business Objectives
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At HOSTING, we understand the importance of setting up success criteria (KPIs) to measure your IT team’s impact (value) in direct partnership with the business. This slideshow which accompanies a live webinar will discuss common problem areas that companies experience when trying to align their IT teams and business departments.
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KPIs: Aligning Your IT and Business Objectives
- 1. KPIs: Aligning Your IT and Business Objectives
- 2. • This webinar is being recorded and an on-demand version will be available at the same URL at the conclusion of the webinar • Please submit questions via the button on the bottom left of the viewer • If we don’t get to your question during the webinar, we will follow up with you via email • Download related resources via the “Attachments” button above the viewing panel • On ? Join the conversation: #KPIs @HOSTINGdotcom 2 Housekeeping
- 3. Our speakers today: Tricia Pattee VP of Product Management Michael McCracken VP of Advanced Solutions
- 4. • Business Alignment Criteria • Common Approach Challenges • Common Tool Challenges • Defining IT objectives • Proposed Strategies Agenda
- 5. “64% of executives think that IT must better understand business goals.” “47% believe that business goals are going unsupported by IT.” “32% feel that IT is investing in areas that don't support the business.” Source: Info-Tech Benchmarking and Diagnostic Programs
- 6. • Reactive • 24x7 global support needed • System focus (vs. business service focus) • Decentralization Common Approach Challenges
- 7. • Complexity • Maintenance • Hybrid • Silos • Traditional IT vs. Cloud IT Common Tool Challenges
- 8. Adopt a business services perspective Before you start…
- 9. • End User Experience • Automation • Network & Applications • System Resources Adopting a business service focus Businessvalue
- 10. Business Alignment Criteria Communication Value measurements Governance Partnership Scope & Architecture Skills
- 11. • Understand the business objectives • Right-size your strategy • Establish a commitment to execution • Build a culture that supports the objectives Defining IT Objectives
- 12. • Continually improve availability • Establish performance baselines • Monitoring is proactive and predictive • Provide accurate performance reporting • Tools are cost-effective Common IT Objectives
- 13. Old New Up-time Response time to view website content Server performance Application performance & availability Server ping-time Average time for a user login Domain controller up-time Number of minutes that users could not authenticate using Active Directory Key Performance Indicators
- 14. • Identify business drivers • Create IT vision • Access current alignment • Identify alignment gaps • Prioritize IT initiatives • Evaluate implementation options • Create migration plan • Adjust IT strategy Proposed Next Steps
- 15. • Alignment • Informed investment decisions • Timely development • Improved credibility • Elimination of redundancy The Results
- 16. Request a Live Demo
- 17. For more information on how HOSTING can help you align your IT and Business goals, go to: www.hosting.com Q&A
Editor's Notes
- How do you know if your organization isn’t aligned? What does being aligned actually mean to different parts of the organization. Those are things that you will need to ask employees. If you are hearing things like “IT isn’t appreciated” or “We aren’t really part of the company” or “We’re always the last to know, we’re always playing catch up” these could be key indicators of a disconnect and the need for alignment.
- Reactive. IT staff often learn of service problems from the end user. The data collected from the various tools is not correlated to provide trend data that would allow problems to be resolved before they impact the customer 24X7 Global Support Opportunity. Despite your footprint, you may have staff responding to non-critical alerts during business hours. Delays in service restoration can negatively impact staff across the globe. System Focus vs Business Service Focus. If you’re invested in measuring the performance of systems (servers, network devices, storage, etc.) and under invested in services (application, web, financial, etc.). The system focus is helpful for internal IT monitoring, but it doesn’t allow the organization (or IT) to understand the business and end-user experience. Decentralized. Decentralized IT monitoring is typically less efficient and costs more than a centralized approach. Overlaps in responsibility are common and it’s difficult to correlate information that is collected in silos. This approach also makes root cause analysis very difficult and time consuming.
- Complex. Compassion has extremely powerful and capable monitoring tools. Unfortunately, the more capable a tool is, the more difficult and complex it is to install, configure and maintain. Most organizations have dedicated staff to maintain each monitoring tool. At Compassion, there are not enough resources to dedicate to monitoring tool maintenance. This results in Compassion using a fraction of the tools’ capabilities and challenges configuring the tools to meet the ministry’s evolving needs. Maintenance Hybrid Silos. Compassion has multiple monitoring tools: Science Logic, CheckMK, SCOM, Nagios, Orion, Pingdom, DBAMon, and ExtraHop just to name a few. Unfortunately, there is little or no correlation between these various tools so we have silos of information. This makes it very difficult to do root cause analysis and we often waste time troubleshooting issues that could be more easily resolved if the technician had data from all the various silos. Traditional IT vs Cloud IT. Compassion built its monitoring capabilities primarily based on a non-cloud environment with corporate-centered applications and a global network. As Compassion adopts more and more Cloud-based solutions, extends data centers, and relies more on field activities for critical transaction processing, the monitoring capabilities need to evolve to include Cloud technologies such as SaaS and DCaaS in multiple locations and across the globe.
- In order to align your IT objectives with your business, you first need to move from a system focus to a Business service focus. IT must tie activities and capabilities to something meaningful to the organization and to its customers. Things like monitoring of system uptime, performance and transactions are important, but are not enough to address the Business Objectives or the end-user’s needs. Agile, ITIL, COBIT and ISO all speak to the importance of a service focus. Those methodologies can remain intact but it is important that your focus is on how IT contributes to business services.
- Things you can look at to help facilitate this shift are system resources - are you maintaining your own data center or is this something you could outsource to a 3rd party?) network & applications - are they distributed globally, can you utilize software-as-a-service, can you shift system components to holistic transactions? Automation – are there processes that can be automated? What can you integrate into a devops framework? Shifting your KPIs to be focused on end user experience
- So, how do we bridge the gap? First is to make sure the business is aligned - Alignment of business and IT enhances coordination, customer satisfaction and product development. The criteria you use may vary but here are six key areas that you can start with – Communication – Understanding of business by IT and visa versa, learning, knowledge sharing, liaison effectiveness Value measurements – IT metrics, business metrics, balanced metrics, SLAs, benchmarking, Formal reviews and assessments, continuous improvement Governance – Strategic planning by leadership for both the business and IT sides, review org structures (do you have the right alignment? – are there ways to restructure for more cohesion?), review investments (are IT investments aligned with your business objectives? For example, is your engineering team focused on building something that your sales team is not pushing or incented to sell?), create steering committees that include people from both areas of the organization, build a process to prioritize and enlist stakeholders to weigh in. Partnership – Business perception of IT value, role of IT in strategic business planning, create shared goals and risk, have a business sponsor or champion for IT Scope & Architecture – Provide architectural transparency when needed, stay open to flexibility, manage emerging technology that supports the business objectives. Skills – Create environment that fosters innovation, entrepreneurship, adjust management style for this and to motivate teams to build skills that support each other. This may mean cross-training, career crossovers as well as building a trusting, social environment. “Set the goals and establish a team, Understand the business-IT linkage, Analyze and prioritize gaps, Specify the actions (project management), Choose and evaluate success criteria, Sustain alignment” The basic foundation strategy that any type of business should have is to align Information Technology (IT) with business goals. The company should have clear business goals and employs its IT system to exactly achieve these goals. Alignment is described as the appropriate and timely application of IT, in harmony with business objective, strategies, and requirements. Business and IT alignment occurs when the respective strategies are interwoven in such a way that the right things are done. Any business-IT alignment model or strategy must ultimately pursue one goal—continually optimize returns to the business from IT investments, including investments in projects, capital, service, support, maintenance, and any other IT effort or expenditure. The key success factor for aligning IT spending and efforts with business needs is mutual leadership and accountability. Regardless of its role, every IT activity, project, or service must play a part in creating business value.
- Understand the business objectives – Right-size your strategy – make sure that you’re getting buy in from the business and guidance on your objectives. Be realistic about what you can accomplish. Establish a commitment to execution – build a roadmap, this will not happen overnight. Set short and long term goals that you can target to create alignment. Ideally, this will mean consolidation of tools, collaboration between teams, and building other efficiencies. Build a culture that supports the objectives – this cannot be done alone nor dictated by leadership only. Your team must understand the reasons and the value behind these changes. Building a culture that closes the gap between IT and the business will only enhance the other changes you are working to make.
- Continually improve availability: this is arguably the most important objective for any IT organization. Performance baselines established: when infrastructure and application upgrades take place, baselines must be present to compare systems performance before and after changes or modifications occur. Monitoring is proactive and predictive (e.g. Event Correlation): directly supports increased availability of Business Services. Performance reporting is accurate: provide objective analysis of how well IT Business services are being delivered. Monitoring is cost-effective: optimize monitoring tools and specialized skill sets, allowing for more effective event correlation and root cause determination.
- A critical element of this strategy is to define new, service-focused KPIs. The new KPIs must relate to specific Business Objectives. The KPI metric data must be beneficial to decision makers.
- Step 1: Identify Business Drivers Identify the business needs that are driving IT. In other words, what are the business needs that require IT enablement? Is the company launching a new product that requires, say, a new fulfillment system? Is the company acquiring another company that requires rationalizing the systems of the two? These business needs are continuously changing. Periodically, they should be identified so action can be taken in response. Step 2: Create IT Vision Now that we know our business’ needs, how can IT help? This identifies the IT Capability – strategy, process, infrastructure and organization – required to meet business priorities. The vision lays the general guidelines or policy that drive the creation of this IT Capability. Remember, two people might react differently to the same requirements depending on their underlying beliefs. It is very important to articulate these underlying attitudes and beliefs into a vision before attempting to answer the IT Capability question. Step 3: Assess Current Alignment How does the current IT Capability compare to the envisioned IT Capability? There are three dimensions of alignment – investment, asset and organization. By answering this question for all three, this step assesses the alignment along these three dimensions. Step 4: Identify Alignment Gaps Comparing the desired or “to-be” IT Capability with the current or “as is” IT Capability, one can identify gaps that are causing misalignment. Again, this comparison is made along the three dimensions – investment, asset and organization to precisely identify the root cause of misalignment. Once we have the root causes, we can identify the potential fixes. One “fix” can potentially address multiple gaps! Step 5: Prioritize IT Initiatives The previous step gives us a list of “fixes” that can get business and IT aligned. However, we might not be able to act on them – all organizations are capacity constrained. More importantly, we should not act on all of them. Some fixes are easier than others. Some provide a bigger “bang for the buck”. There are other reasons why we should not attack the entire list all at once. Consequently, this list must be prioritized. Step 5 does just that. Step 6: Evaluate Implementation Options A prioritized list of “fixes” or IT Initiatives is the starting point for implementation planning. This is a critical step to ensure success. Often, organizations forget to plan for implementation and pay the price in terms of over budget or delayed or failed projects. This step takes the list of initiatives and creates a roadmap for IT. This roadmap is a result of careful planning that takes is driven by one primary consideration - risk. Step 7: Create Migration Plan This step creates a migration plan for the IT roadmap – steps, deliverables, responsibility, timing etc. This is a plan. It needs these key elements in some detail. However, trying to button this down beyond a certain point is an exercise in futility. No plan stands the test of time. Hence, this plan should also be modified as we learn new things after implementation begins. Step 8: Adjust IT Strategy
- An effective IT strategy will help your organization realize tangible benefits 1. Business-IT alignment. A successful IT strategy ensures business-IT alignment on the strategic scale. IT is working onthe right things that matter to the business. IT avoids wasting budget on things that do not matter to the business. 2. Informed strategic IT investment decisions. A successful IT strategy provides a clear picture of how each proposedinvestment supports enterprise objectives by addressing identified gaps between the current state and target state of IT.This helps avoid sporadic investments influenced by the loudest voice. 3. Timely developed capabilities. A successful IT strategy ensures IT has the required effectiveness and efficiency ofpeople, processes, and technology at the right time to achieve business objectives. The comprehensive assessment ofthe entire IT organization uncovers gaps, interdependencies, opportunities, and risks that are hard to identify with anarrower tactical focus. 4. Improved IT credibility. A successful IT strategy increases the business' understanding of what IT can do, currentlydoes, and will do to support the achievement of business objectives. As a result, it improves the business' satisfactionwith IT, improves IT’s credibility, and enables IT to become a strategic partner with the business. 5. Elimination and avoidance of redundancy. A successful IT strategy looks at IT holistically (i.e. across possiblysiloed roles, processes, and technology components) and uncovers and makes plans to eliminate and avoidunnecessary redundancy through centralized, shared IT capabilities, consolidated applications, and infrastructure.