Monday, December 2, 2019

Three Aspects of IT Performance Measurement

A measurement system is a necessary foundation for continuous improvement. 

With constant changes and frequent disruptions, highly effective IT leaders have to be prepared to constantly realign technology against the enterprise's business needs and measure things really matter to the organizational success. The art and science of IT management are to optimize its usage, achieve business value, and develop long term business competency. Measuring modern IT performance is no longer a single management discipline to measure efficiency anymore, it takes a cross-disciplinary approaches to measure IT effectiveness, profitability, transformability, and innovation. Here are three aspects of IT performance measurement.

Business driven: IT performance metrics can be categorized into infrastructure performance metrics, process optimization metrics, or innovation measurement, etc. The well-selected set of metrics are those used to inform the business of multidimensional IT performance and value. The best way to demonstrate the value of IT is to know who you are showing the value to. Once this is done and the business understands the value of IT,

IT can expect some sort of partnership with the business, where you have business folks coming up with further ideas on how they can benefit from IT. Ask whether the metrics can reveal anything meaningful for the identified business purpose and the stakeholders who will use the metrics. In fact, the information-oriented and metrics-wise engagements are leading IT to be much more proactive in proposing, as opposed to responding to fresh ideas, and take new ways to improve IT products or services deliveries, or actually create new business revenue.

Contextual measurement: Keep in mind, performance measures are stories, not just data. The right IT performance metrics are requested in the right context. Present a methodology to acquire the “appropriate” IT contextual measurement items, and explain to the upper management of why they are requested, to ensure the management buy-in for the metrics collection processes, and really focus on key metrics that correlate to better business outcomes.

In practice, there are performance management practitioners are extremely obsessed by metrics and end up building up a sophisticated set of meaningless metrics. Irrelevant measurement indicator will waste time and corporate resources, increase unnecessary complications and decrease business effectiveness.

The other pitfall for IT performance measurement is about measuring the “part,” but ignoring the “whole.” Assume the collective IT performance is equal to the sum of pieces - the individual’s performance, or unit performance, which is not always the case. Keep in mind, IT performance is part of the overall business performance; the contextual IT performance measurement should cover all areas that contribute to value creation including service quality, employee engagement, customer satisfaction, and financial outcomes.

Maintaining vigilance: Vigilance is defined as the ability to maintain concentrated attention over prolonged periods of time. When selecting the right set of metrics for cost optimization, ask whether the metrics can reveal anything meaningful for the identified purpose, and ensure the management buy-in for the metrics collection processes. 

IT metrics have to evolve from being a cost center to becoming a revenue generator and maintain vigilance, to ensure metrics increasingly put emphasis on measuring things that businesses care about and lead to continuous improvement. The right metrics can be helpful to track progress in business improvement initiatives. The good metrics can help you get some objective perspectives on what you are trying to manage, and concentrate on measuring things really matter. The metrics increasingly put emphasis on measuring things the business care and make IT function as a clear value-adding partner in the company.

A measurement system is a necessary foundation for continuous improvement. IT performance effectiveness is about how to qualify business results, take continuous improvement practices to guide the team understanding the purpose of performance and measurement management, achieve a greater level of productivity, autonomy, innovation, and brings up tangible business results.

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