Develop Meaningful Service Metrics

Select IT service metrics that drive business value.

ANALYST PERSPECTIVE

Are you measuring and reporting what the business needs to know?

“Service metrics are one of the key tools at IT’s disposal in articulating and ensuring its value to the business, yet metrics are rarely designed and used for that purpose.

Creating IT service metrics directly from business and stakeholder outcomes and goals, written from the business perspective and using business language, is critical to ensuring that the services that IT provides are meeting business needs.

The ability to measure, manage, and improve IT service performance in relation to critical business success factors, with properly designed metrics, embeds IT in the value chain of the business and ensures IT’s focus on where and how it enables business outcomes.”

Valence Howden,
Senior Manager, CIO Advisory
Info-Tech Research Group

Our understanding of the problem

Executive summary

Situation

• IT organizations measure services from a technology perspective yet rarely measure services from a business goal/outcome perspective.
• Most organizations do a poor job of identifying and measuring service outcomes over the duration of a service’s lifecycle – never ensuring the services remain valuable and meet expected long-term ROI.

Complication

• IT organizations have difficulty identifying the right metrics to demonstrate the value of IT services to the business in tangible terms.
• IT metrics, as currently designed, reinforce division between the IT and business perspectives of service performance. They drive siloed thinking and finger-pointing within the IT structure, and prevent IT resources from understanding how their work impacts business value.

Resolution

• Our program enables IT to develop the right service metrics to tie IT service performance to business value and user experience.
• Ensure the metrics you implement have immediate stakeholder value, reinforcing alignment between IT and the business while influencing behavior in the desired direction.
• Make sure that your metrics are defined in relation to the business goals and drivers, ensuring they will provide actionable outcomes.

Info-Tech Insight

1. Service metrics are critical to ensuring alignment of IT service performance and business service value achievement.
2. Service metrics reinforce positive business and end-user relationships by providing user-centric information that drives responsiveness and consistent service improvement.
3. Poorly designed metrics drive unintended and unproductive behaviors, which have negative impacts on IT and produce negative service outcomes.

Service metrics 101

The majority of CIOs feel metrics relating to business value and stakeholder satisfaction require significant improvement

A significantly higher proportion of CIOs than CEOs feel that there is significant improvement necessary for business value metrics and stakeholder satisfaction reporting.

N=364 N=364 (Source: Info-Tech CIO-CXO Alignment Diagnostic Survey)

Meaningless metrics are a headache for the business

A major pitfall of many IT organizations is that they often provide pages of technical metrics that are meaningless to their business stakeholders.

Poorly designed metrics hurt IT’s image within the organization

By providing metrics that do not articulate the value of IT services, IT reinforces its role as a utility provider and an outsider to strategic decisions.

Articulate meaningful service performance that supports the achievement of business outcomes

Service metrics measure the performance of IT services and how they enable or drive the activity outcomes.

A business process consists of multiple business activities. In many cases, these business activities require one or more supporting IT services.

For each business process, business stakeholders and their goals and objectives should be identified. For each business activity that supports the completion of a business process, define the success criteria that must be met in order to produce the desirable outcome. Identify the IT services that are used by business stakeholders for each business activity. Measure the performance of these services from a business perspective to arrive at the appropriate service metrics.

Differentiate between different types of metrics

Stakeholders have different goals and objectives; therefore, it is critical to identify what type of metrics should be presented to each stakeholder.

Implementing service metrics is a key step in becoming a service provider and business partner

As a prerequisite, IT organizations must have already established a solid relationship with the business and have a clear understanding of its critical business-facing services.

At the very least, IT needs to have a service-oriented view and understand the specific needs and objectives associated with each stakeholder.

Once IT can present service metrics that the business cares about, it can continue on the service provider journey by managing the performance of services based on business needs, determine and influence service demand, and assess service value to maximize benefits to the business.

Which processes drive service metrics?

Both business relationship management (BRM) and service level management (SLM) provide inputs into and receive outputs from service metrics.

Business Relationship Management BRM works to understand the goals and objectives of the business and inputs them into the design of the service metrics. Service Metrics BRM leverages service metrics to help IT organizations manage the relationship with the business. BRM articulates and manages expectations and ensures IT services are meeting business requirements.

Which processes drive service metrics?

Both BRM and SLM provide inputs into and receive outputs from service metrics.

Service Level Management SLM works with the business to understand service requirements, which are key inputs in designing the service metrics. Service Metrics SLM leverages service metrics in overseeing the day-to-day delivery of IT services. It ensures they are provided to meet expected service level targets and objectives.

Effective service metrics will deliver both service gains and relationship gains

Effective service metrics will provide the following service gains:

• Confirm service performance and identify gaps
• Drive service improvement to maximize service value
• Validate performance improvements while quantifying and demonstrating business value
• Ensure service reporting aligns with end-user experience
• Achieve and confirm process and regulatory compliance
  Which will translate into the following relationship gains:
  • Embed IT into business value achievement
  • Improve relationship between the business and IT
  • Achieve higher customer satisfaction (happier end users receiving expected service, the business is able to identify how things are really performing)
  • Reinforce desirable actions and behaviors from both IT and the business

Don’t let conventional wisdom become your roadblock

Our three-phase approach to service metrics development

Let Info-Tech guide you through your service metrics journey

1	2	3
Design Your Metrics	Develop and Validate Reporting	Implement, Track, and Maintain
Start the development and creation of your service metrics by keeping business perspectives in mind, so they are fully aligned with business objectives.	Identify the most appropriate presentation format based on stakeholder preference and need for metrics.	Track goals and success metrics for your service metrics programs. It allows you to set long-term goals and track your results over time.

CIOs must actively lead the design of the service metrics program

The CIO must actively demonstrate support for the service metrics program and lead the initial discussions to determine what matters to business leaders.

1. Lead the initiative by defining the need
   Show visible support and demonstrate importance
2. Articulate the value to both IT and the business
   Establish the urgency and benefits
3. Select and assemble an implementation group
   Find the best people to get the job done
4. Drive initial metrics discussions: goals, objectives, actions
   Lead brainstorming with senior business leaders
5. Work with the team to determine presentation formats and communication methods
   Identify the best presentation approach for senior stakeholders
6. Establish a feedback loop for senior management
   Solicit feedback on improvements
7. Validate the success of the metrics
   Confirm service metrics support business outcomes

Measure the success of your service metrics

It is critical to determine if the designed service metrics are fulfilling their intended purpose. The process of maintaining the service metrics program and the outcomes of implementing service metrics need to be monitored and tracked.

Measure the success of your service metrics

It is critical to determine if the designed service metrics are fulfilling their intended purpose. The process of maintaining the service metrics program and the outcomes of implementing service metrics need to be monitored and tracked.

Demonstrate monetary value and impact through the service metrics program