How to Define KPIs for Corporate IT services?
There is an opinion that KPIs can help the management evaluate the performance of a specific Group/ Department/ Sector etc. I support such general definition for KPIs- "KPIs determine the progress of an organization towards its set goals" (from a Blog).
OK, it's more or less clear for me how to define the KPIs for let's say Sales people/ groups/ deps (to measure the profitability, actual sales could be compared to the expenses, etc.), ROI (Return On Investment) could be also considered as KPIs for a new business, new office etc.
But in the case of evaluation of activity of an IT Department or Tech. Support Group, people that must only guarantee the support and maintenance for the company service infrastructure, in the case of a non-IT company - what there could be invented to not be just formal metrics?
I don't think it sounds seriously enough if "less downtime for CRM server", "corporate web site always available" or "better backup/restore policy" etc :), and also since the efficiency of IT highly (not completely but...) depends on its budget approved/not by the same CEO that wants to measure IT Group's performance- it's also not correct to cause IT if let's say an open-source platform had a bug so crashed, if it wasn't possible to buy a stable platform from a cool vendor.
what there could be invented here as you think? A Goal oriented and plan-verification evaluation only? (a plan for quarter/ year and its later verification).
Clarification added May 1, 2008:
it's needed to clarify: my company is selling B2C services to huge number of end users, those are all mobile phone owners or random web people. it's absolutely impossible to contact "the client" directly- there are thousands people becoming clients for one day, leaving the service and becoming clients again tomorrow.
so it's not possible to measure the quality of IT Team's work based on CUSTOMER satisfaction. in our case IT serves to the ORGANIZATION, so it's needed to verify the effectiveness of IT from some internal goals achieved?
Clarification added May 1, 2008:
I found many people speak about Help Desk- it's not what IT Department does in my case. Help Desk, Customer Service etc- it's below Projects/ Sectors. And IT Supplies the life to all organization (new projects launch, internal platforms like warehouse/ reporting etc, platform optimization, etc).
Good Answers (3)
Adam W
Market & Product Strategist
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Andrey,
I would like to expand on Gerry Mann's answer (which I agree with).
I would suggest that your first step would be establish a "service catalogue" which is a list of what services you (the IT dept) provide to the rest of the organization. The key here is to not make this a list of technical components (e.g. mail server, web server), but a description of what the user expects to get.
For example: to a user, email services would be the ability to send and receive email with: a)spam filtering, b)proof of receipt, c)ability to create mailing lists, etc., but NOT the ability to perform mass marketing email campaigns (that would be another service) - the email service will likely include several servers, different software packages, internet connectivity, and more.
Once the service is well defined from the point of view of customer expectations and IT restrictions (e.g. no email campaigns) it would very important to get get the agreement and buy-in on these definitions from the rest of the organization. I would recommend a series of one on one discussions with each senior executive, followed by a group meeting that you could call the IT Steering Group or Committee, where they would all see each other agreeing to what they already agreed to in private.
If there is resistance to forming a steering group, try the argument that they already spend hours every week dealing with IT issues and that spending one hour in this meeting to get organized will cut down on the time spent firefighting.
The reason why the one on one meeting are very important is because your senior execs will have lots of questions/debate. If you get into it with all of them around the table your meeting will go out of control, and you will not achieve agreement to full service catalogue in the time you have allocated - this will make you look bad and disorganized.
You need to be able to argue your case, and where necessary to capitulate and make a change to service definition, as well as identify which executive disagree on fundamental points. Where this happens, you bring two alternatives to the Steering Group, and ask for decision.
You also ask the steering group to assign a rank of importance to each service. You do this by handing out a questionnaire where each service is listed, and they have a "budget" of $100. They must allocate their $100 budget amongst the different services. This will help you all year long but especially at the end of the fiscal year during budgeting.
Then you write SLA's.
I recommend that your SLAs be composed of 5 points:
-Service description (from the service catalogue)
-Availability (how much of the time the users expect to be able to use the service. 24/7? 24/7 with 5 hour maintenance on Sunday? The last 5 business days before month end?
-Remediation time (when the service becomes unavailable, what is an acceptable time to restore it? 1 day? 1 hour?
-Measurement (how will availability be measured? Server uptime? pings from external location? manual login every 4 hours?
-Reporting (how will IT report on all of the above? daily, weekly? include sample reports)
Once this is done, you will have very concrete measurements of you performance.
If you want to go further, investigate ITIL, create a configuration database and a change management process (see ITIL). I also highly recommend the McKinley Airport Simulation exercise from the Microsoft Operating Framework training as an introduction to why ITIL is important, and how it can help.
Adam Wasserman
adamw@mail.com
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Adam W also suggests these experts on this topic:
Gerry M
PMO Reporting Manager/Consultant at Bank of America via Carlisle-Gallagher Consulting
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I would establish service level agreements for scheduled availability and for end-user response time to start with from an operational perspective.
I would establish service level agreements for software release delivery in terms of frequency (monthly, quarterly) and post-production defects in the computing systems from an application development perspective.
You could throw in KPI's for testing (variance from planned test window) and for projects (earned value variance from SPI/CPI measures) depending on the level of maturity your shop is at in project management.
In my view, the best KPI's are the KPI's that measure impact to the customer (end-user of the computing systems). Other KPI's help analyze internal IT issues and the end-user (paying customer, project funders) don't really care about those. They are important to the IT people, but that's about it.
Thanks for your question.
Regards,
Gerry.
Joey W
Enterprise Excellence Transactional Deployment Engineer at Shaw Industries
The key to selecting a KPI is to determine what hurts your customer (both internal and external to the organization) and measure it.
In the world of IT there can be several issues; server availability, problem resolution time, project cycle time, dollars saved using IT solutions ("soft" and "hard" dollars), etc. All these issues are pretty easy to measure and have a direct effect on your internal customers.
For external customers, you typically have to rely on surveys and customer feedback forms. If your company measures the voice of the customer (which every company should), ensure that you include customer feedback related to the company website.
Over the past several years, my company has included our web resources on the customer survey. The initial survey's showed that our website was not interactive enough. This led to resources being directed towards our IT web development. The new website allows a( much more interacitve experience for our customers and a drastically improved customer satisfaction rating.
Again the key to any KPI is to measure something that is relevant to the customer. Any other measurements cause confusion and are a waste of resources.
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More Answers (6)
You might consider 1-3 short survey questions delivered to all or perhaps just a sample of your clientele, either at regular intervals or based on particular actions.
For example, perhaps you communicate updates from IT on a regular basis. In the signature of those emails, you could consistenly link to an anonymous survey with questions such as, "Are you satisfied with the level of support we're providind?" and "Why or why not?"
Jim H
CEO at mavSolve inc., Results focused management consultant
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I agree with Jerry above.
This could also be tied into a cost-allocation structure, depending on how many organizations you support.
In a previous job, we offered a cost-allocation structure based on space used, revenue generated, power consumed, etc... but also offered each organization a service level based on uptime, page response time, (I managed web infrastructure), a difficulty rating based on software complexity (some sites ran pretty much on their own, others had to be "driven" by NOC staff).
We based our KPIs on these objective metrics. We also established outside metrics for measurement (i.e. Keynote response times and uptimes).
In another organization, I ran a "helpdesk" for our clients. We again established SLAs up front. Like above, the only way to set KPIs is to have pre-established targets. Service Level Agreements provide those.
Clarification added April 30, 2008:
Oops, Gerry... sorry.
Hi Andrey,
For the IT side of the house, I would recommend you gather best practices from industry leaders such as the Help Desk Institute and Gartner. You can then establish your KPIs to mirror these best practices so you know how you stack up to the industry. For example, 50% first call resolution at the help desk may sound decent, but when compared to the industry average of 56%, its clear there may be work to do in that area. This is just one example but you should be able to put together an IT scorecard that covers all IT areas.
I hope this helps. Feel free to contact me if you would like clarification or have any further questions.
Best Regards,
Audra
Praveen M
Editor - SETLabs Briefings and Senior Researcher @ Innovation Labs at Infosys Technologies Limited
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Hi Andrey,
I have written a paper titled "Monitoring IT-Business Linkage through Metrics Governance using Scorecard Approach" which deals with a major part of your query. An easy-to-implement scorecard has been developed in that. Should you be interested I can share it with you.
start with-
user surveys and reports on how long service tickets remain open for helpdesk
Use something like Nagios or other network monitoring tool to measure and report on availability of production applications.
Sasa A
ICT Court Expert, manager, C(I)SO, independent ICT (and) business strategy consultant, presenter and author
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Whoever is trying to validate true value of IT services provided, should as a first step introduce zero-invoicing.
After zero-invoicing, one can think about KPIs. However, the grossed up value of provided services for various units, sub-departments or connected companies will show the true value of IT in the organization.
Once zero-invoicing has been used for a certain period of time, it would be easy to identify "KP" areas, from which KPIs can be selected.
At least, this is my opinion.
