Achieving VOI and ROI through Effective Metrics From ITSM Academy's April 2009 Webinar

1. The Metrics Monster
Achieving VOI and ROI th
A hi i d through
h
Effective Metrics
© ITSM Academy

2. About ITSM Academy
Certified Woman Owned Business
Accredited ITSM Education Provider
cc ed ed S duca o o de
ITIL® Foundation / V3 Bridge
ITIL® V2 Practitioner, V3 Capability
ITIL® Service Manager / V3 Bridge
ISO/IEC 20000 & MOF Certifications
Certified Process Design Engineer (CPDE)
Practical Workshops – including Visible Ops and Apollo 13
PMI Global Registered Education Provider
Public Training in Fort Lauderdale, Dallas & DC
Corporate on site classes
on-site
Courseware licensing
Over 15,000 learners trained since 2003
2007 - Awarded Federal Government Schedule Contract (GSA)
2
© ITSM Academy

3. Agenda
The Metrics Monster
Using the 7-Step
Ui th 7 St
Improvement Process
to Achieve VOI and
ROI
3
© ITSM Academy

4. The Metrics Monster
The issues that arise when we use measurements
and metrics to drive behavior instead of using
metrics to achieve VOI and ROI
Letting only financial goals drive our
desire for VOI and ROI, instead of seeing
g
the results of ITSM
VOI = Value on Investment = warm fuzzies
ROI = Return on Investment = cold facts
4
© ITSM Academy

5. The Metrics Monster
The disconnect that results from reverse engineering
IT Services from a set of measurements and metrics
Building from the bottom up,
up
without top down design
Identifying processes and
technologies as services
You cannot deliver “Change
g
Management” like a product
5
© ITSM Academy

6. What should you measure?
Focus first on the customer and their needs (i.e. IT
Services)
Identify your customer or
market segments
Gather customer requirements
for services they desire
Identify quantifiable aspects of
the requirements by breaking
down the requirements into
more granular pieces.
g p
6
© ITSM Academy

7. What should you measure?
Gather requirements like you would for any other
q y y
needs
Build measurements and
metrics based on the
most granular pieces
Aggregate together to
gg g g
find meaningful points to
baseline
7
© ITSM Academy

8. What can you measure?
Validate the measurements and the metrics
What will they do with the information and
knowledge you will provide to them?
How will they use the information to see
VOI and ROI?
8
© ITSM Academy

9. Gather the data
Using various outputs, gather only the data needed
to fulfill the measurements
Look in all your Service
L ki ll S i
Management tools
Differentiate between
data and information
Do not waste time collecting unusable or
unimportant information
i t ti f ti
9
© ITSM Academy

10. Process the data
Identify the “currency” that your customers use
Translate dollars into hours or hours into
dollars
40 FTE Hours * $100= $4000
Slice and dice
Excel is your friend
Pivot tables
Histograms
Hi t
Statistical tools
10
© ITSM Academy

11. Analyze the data
Analyze the information using proven statistical, analysis
and critical thinking methods and techniques
ROI Calculator
Control charts
Advanced Statistical tools
Brain power
11
© ITSM Academy

12. ROI Worksheet:
Fewer IT Service Outages
_____ outages per month
Average outage: _____ minutes
Average users impacted: _______
g p
Average user rate: $_______/hour
Outage costs = $________/minute
Outage costs = $________/hour
Outage costs = $_________/month
Reduce by 20% = $________/month
Reduce by 35% = $________/month
Reduce by 50% = $________/month
12
© ITSM Academy

13. Sample ROI:
Fewer IT Service Outages
Annuall
A
10 outages per month
t th
Cost:
Average outage: 15 minutes
120
Average users impacted: 100
Outages
Average user rate: $50/hour
x .25 hours
Outage costs: $83/minute
Outage costs: $5,000/hour x 100 users
Outage costs: $12,500/month x $50
Reduce by 50%: $6,250/month hourly
= $150,000
At 1000 I
Impacted U
t d Users: $1 5M
$1.5M
13
© ITSM Academy

14. Present the data
Translate the analysis into meaningful pieces of
information and knowledge
Understand how y your customers
intend to use the information
and knowledge
Use their language
0%, 50%, 100% Options
Recommended solution
14
© ITSM Academy

15. Take action
Be willing to throw out measurements and metrics if
the customer sees no value in them
Follow up on the chosen
recommendation
Begin a project
Identify accountable individuals
Identify funding
Begin the cycle again
Remember: Metrics are the results and
the goal not the beginning
goal,
15
© ITSM Academy

16. Questions??
16
© ITSM Academy

17. Want to Learn More?
Now available
ITIL® V3 Foundation / Bridge
ITIL V3 Capability | Lifecycle
ITIL® V3 Service Manager Bridge
ITIL® V3 Books
ISO/IEC 20000 (ISO 20K) Foundation
Certified Process Design Engineer (CPDE)®
Coming soon
Managing Across the Lifecycle
ISO 20K Professional Level Modules
ITIL Workshops
17
© ITSM Academy

18. ITIL® V3 Certification Scheme
18
© ITSM Academy

19. ITSM Academy, Inc.
19
© ITSM Academy