This document discusses metrics that matter for business and IT. It outlines a process for identifying business goals and issues, defining IT objectives to address them, implementing initiatives to meet the objectives, determining critical success factors and associated benefits. Key performance indicators are identified to measure whether the benefits are achieved. The document recommends best practices like having governance and commitment processes, measuring process maturity, ensuring IT supports business goals, and identifying owners for benefits and KPIs.

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Gwen Curlee, Value Architect Dag Blokkum, IT Transformation Manager
October 2014
Metrics That Matter for Business and IT

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Agenda
1.Business and IT Investing Gwen Curlee
2.From Benefits to Metrics Dag Blokkum
3.Best Practices Dag Blokkum

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Business and IT Investing

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IT Investments
•Driven by Need
–New functionality required
–Accommodate additional volume with same resources
–Upgrade existing technology to maintain current functionality
•Justified by Value
–Cost Savings
•Expense Savings (Vendor, Labor Costs)
•Capital Savings
–Cost Avoidance
–Increased Revenue
–Reduced Risk
–Regulatory Compliance

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Value Realization
Value promised to receive approval is either
–Never measured
–Only measured to the committed ROI
So…
–How do we know the true value of a project?
Why does this happen?
•After approval, concentration shifts from value to meeting the need
•Focusing solely on the need minimizes
–Value received
–Value measured

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Projects without Value is like a Cart pulling a Horse

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Ensure Value Throughout the Lifecycle of a Project

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From Benefits to Metrics
Identifying, Measuring and Reporting

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Business Issues/Goals and IT Objectives
Business Goals
Business Issues
IT Objectives
IT Objectives are determined by both:
•Business issues with IT applications and support
•Business goals
Example: Business Issue: Frequent application outages render unacceptable availability IT Objective: Eliminate unplanned outages on the top10 applications Business Goal: Establish sales presence in new international geographic territories
IT Objective: Faster provisioning of infrastructure and services in new geographic areas

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IT Objectives Driving IT Initiatives
IT Initiatives are begun to improve processes and technology to meet the objectives. New and enhanced capabilities are now available to IT and its users.
Example: IT Objective: Eliminate unplanned outages on the top10 applications IT Initiative: Implement Event, Availability, and Service Level Management IT Objective: Faster provisioning of infrastructure and services in new geographic areas IT Initiative: Implement Cloud Based Provisioning
IT Objectives
IT Initiatives

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IT Initiatives Determine Critical Success Factors
Critical Success Factors need to be defined for all major initiatives. These typically reflect culture, organizational and process requirements for success, and measure efficiency and effectiveness.
Example: IT Initiative: Implement Event, Availability, and Service Level Management
Critical Success Factor: Event management must be well integrated with incident management and have root cause analysis techniques IT Initiative: Implement Cloud Based Provisioning
Critical Success Factor: Clearly defined criteria needed to define when to use public, private, or hybrid Clouds, and the economics of each
IT Initiatives
Critical Success Factors

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Critical Success Factors Determine IT and Business Benefits
Benefits are defined based on the new capabilities, and specify the benefits (both IT and business) of the Critical Success Factors.
Example: Critical Success Factor: Event management must be well integrated with incident management and have root cause analysis techniques
IT Benefit: Faster isolation of failing components via Single Pane of Glass
Business Benefit: Less downtime of critical applications Critical Success Factor: Clearly defined criteria needed to define when to use public, private, or hybrid Clouds, and the economics of each
IT Benefit: Optimized utilization of the different platform types allows for efficient staff use
Business Benefit: Most cost-effective method to provide faster geographical setup (time to market)
Critical Success Factors
IT Benefits
Business Benefits

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Benefits are Measured by KPI’s
KPI’s are the measures that allow you to determine whether a benefit is being achieved. KPI’s contain a goal (target) and indicate the progress needed (improvement factor).
Example: IT Benefit: Faster isolation of failing components
KPI: Decrease MTTR by 40% for outages involving critical applications
Business Benefit: Less downtime of critical applications
KPI: Increase availability of critical applications to 99.5% in 9 months
IT Benefits
KPI’s
Business Benefits
Example: IT Benefit: Optimized utilization of different cloud types allows for efficient staff use
KPI: 95% of critical applications will be sourced in a private cloud
Business Benefit: Most cost-effective method to provide faster geographical setup (time to market)
KPI: Reduce time required to setup new stores in Asia Pacific from 30 days to 1 week
Metrics

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Be SMART When Developing Objectives…
SMART
Description
Specific
Be clear about desired value outcomes. Avoid fuzzy descriptions
Measureable
Determine the criteria for measuring progress.
Attainable
Can the goal be accomplished?
Relevant
Is this goal worthwhile?
Time-Bound
When is a realistic time to achieve this goal?

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A Well-Defined KPI
 Reflects strategic & project objectives:
 Measurable:
 Controllable:
 Actionable:
 Simple:
 Implementable:

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Best Practices

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Best Practices
Governance Without a process for determining value, you increase your chances for failure
Communication / Commitment Commitment starts at the top to commit time and resources and to act upon the information
Process Maturity
Must be considered because value goals will often differ depending on maturity
Working Together – 3 P’s Optimum value comes from process, organization, and technology working together Support the Business IT value is only meaningful when it supports business goals. Ownership Identify owners of Benefits and KPI’s. Owners are responsible for:
•Identification of savings
•Verification savings are realized and in budget
•Retiring fulfilled benefits and identifying new benefits

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Thank You.