Monday, January 9, 2012

Ten Disciplines to Measure IT Performance

“You can only manage what you measure.”    - Peter Drucker

In today’s rapidly changing environment, information & technology becomes a more invaluable asset for business to survive and thrive, on the other hand, many IT organizations are struggling with the image as a cost center,  intend to improve reputation as an innovation engine and value center through high IT performance. When you think of "IT performance," what comes to mind? Operational excellence such as customer satisfaction, IT effectiveness or efficiency, or strategic value such as competitive advantage, leadership edge, cultural agility. How to measure IT performance more effectively may base on the audience, the nature and size of your business, here are some new year resolutions and general evaluation and principles.

IT Mantra: Running IT as Business; Doing More with Less

IT Performance Motto: Measure what Matters.

IT Performance Principle: SMART which stands for specific, measurable, actionable, relevant, and time-bound.

IT Performance Disciplines: IT Operational Excellence, IT Strategic Value

1. Reliability & Security - infrastructure running 24/7

Keep the business lights on with reliability and security, which is still the fundamental of IT operation, availability is a reasonable measure of infrastructure performance, IT scoreboard need measure internal customer satisfaction, the IT operational excellence needs to leverage the business growth, the goal is to satisfy customers with low cost.

2. IT Capacity & Capability

IT needs to expand the capacity and capability by improving operation efficiency & effectiveness with the KPIs to resolve incidents and problems, increase in the number of problems successfully resolved and an increase in # of development projects handled without increased staff. IT scalability and change capability will directly impact business growth. 

3. Customer/Vendor Relationship Management

IT must contribute or facilitate and accelerate organizational performance. and IT needs to perform from a customer perspective. The efficiency and effectiveness of the end user are crucial in this. How IT manages customer and vendor relationship has become the key to delivering the right solution at the right time, it includes the enhanced communication with business customers, iterative interaction with end users, and strategic relationship with vendors. The set of questions or measurement such as:
-Does IT create a revenue opportunity?
-Does IT create competitive advantage?
-Does IT solve a business need?
-Is IT priority and business priority consistent?

4.  IT Fiscal Health

IT mantra "run IT like a business” means to manage IT with financial transparency, governance, cost management, and business agility. IT has to deliver the projects that provide the business an edge in the marketplace with minimum cost and on time. IT also needs to be innovative and provide business solutions that have a direct impact on the bottom line. The IT Fiscal health dashboard may include such as Balanced Budget, Variance, Chargeback., etc.

 5. IT Application Portfolio Management

It’s important for IT to deliver the project on time and budget, but more critically on quality or value, the business value of IT project is a priority for any forward-look organization now.

There are no IT projects, only business projects, IT application portfolio management needs to reflect the business priority, also through the most effective methodology such as AGILE via iterative interaction and continuous communication. Before a project begins, create a common dashboard that will display the metrics both business and IT teams will use to measure progress against milestones and deliverables.

6. Innovation Capability with Revenue Generating Initiative

The innovation capability will enable IT as a strategic asset and value center, the most sophisticated questions or measures need to be initialized:
 -What efficiency and revenue generation opportunities are supported/delivered by IT?
 -How does IT impact customer retention?
-How can IT have a "P&L" even if it’s only for communication purposes?
-How can IT impact business metrics like RONA., depend on the nature of business

  7. Talent Competency

Talent is still the most competitive asset in any business, the total quantity, and depth of competency of all are your people. The more people you have with useful skills, the better your IT Performance. The leverage point is also to embrace the latest technology and methodology trend, the right measurements help to improve talent competency and increase IT performance without increasing the numbers of IT resources beyond the budget.

8. Optimize business processes

The philosophy of running IT as the business also means to expand IT lens for process driven, IT is just in such a unique position with helicopter view of business processes, since information and data are permeating into every corner of business, IT performance may also depend on the value created  by optimizing processes, break down the silo, and improve customer experience by instilling the process thinking, via taking advantage of the latest technology trend such as cloud/social/mobile/analytics., etc.

9.  IT Agility

IT agility is the IT ability to serve business needs quickly, the decision points include such as Build vs. Purchase; On-premise vs. Cloud; Public Cloud vs. Private Cloud,  it may also help determine the 80/20 rule: Does 80% of your IT resources spend on maintenance or innovation & growth. The KPIs may include such as:
- time to access: timeliness to access updated information
- time to value/market: how much time before value realization
- time to change: how much time does it take to change to happen
- time to recover: how much time to resume normal operation
- time to compliance: how much time required to achieve compliance
- time to detect: how much time before detection of risk
- time to resolve: how much time before awareness turns into resolution

IT agility also directly decides IT maturity, from the lower level of business & IT alignment into high-level growth engine and a game changer which are the goal for high performance IT.

10. IT Sustainability

Sustainability is no longer just corporate social responsibility anymore, IT as the biggest energy consumer in the enterprise, now has the opportunity to make green as the new gold, IT performance may also need to include the capability for IT to achieve high energy efficiency, reduce carbon footprint by taking advantage of cloud and virtualization technology.

In summary,  IT has the power to affect not only break-fix day-to-day technical operations but also directly impact the bottom line of business activities & efficiency and the top line of business growth and competitive edge. The characteristics of good measurement are consistent and calibrated (will you get the same responses each time you undertake the measurement),  validity (does it measure what you want it to) and the purpose--measurement should involve an appreciation of what good (and bad) looks like, as well as a clear understanding of what actions you will take in each situation.

"To raise new questions, new possibilities, to regard old problems from a new angle, requires creative imagination and marks the real advance in science."   — Albert Einstein


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