metrics that matter for business and it

© Copyright 10/21/2014 BMC Software, Inc 1

Gwen Curlee, Value Architect

Dag Blokkum, IT Transformation Manager

October 2014

Metrics That Matter for Business and IT


Agenda

1. Business and IT Investing Gwen Curlee

2. From Benefits to Metrics Dag Blokkum

3. Best Practices Dag Blokkum


Business and IT Investing


IT Investments

• Driven by Need – New functionality required – Accommodate additional volume with same resources – Upgrade existing technology to maintain current functionality

• Justified by Value – Cost Savings

• Expense Savings (Vendor, Labor Costs) • Capital Savings

– Cost Avoidance – Increased Revenue – Reduced Risk – Regulatory Compliance


Value Realization

Value promised to receive approval is either – Never measured – Only measured to the committed ROI

So… – How do we know the true value of a project?

Why does this happen? • After approval, concentration shifts from value to meeting the need • Focusing solely on the need minimizes

– Value received – Value measured


Projects without Value is like a Cart pulling a Horse


Ensure Value Throughout the Lifecycle of a Project


From Benefits to Metrics Identifying, Measuring and Reporting


Business Issues/Goals and IT Objectives

Business Goals

Business Issues

IT Objectives

IT Objectives are determined by both: • Business issues with IT applications and support • Business goals

Example: Business Issue: Frequent application outages render unacceptable availability IT Objective: Eliminate unplanned outages on the top10 applications Business Goal: Establish sales presence in new international geographic territories IT Objective: Faster provisioning of infrastructure and services in new geographic areas


IT Objectives Driving IT Initiatives

IT Initiatives are begun to improve processes and technology to meet the objectives. New and enhanced capabilities are now available to IT and its users.

Example: IT Objective: Eliminate unplanned outages on the top10 applications IT Initiative: Implement Event, Availability, and Service Level Management IT Objective: Faster provisioning of infrastructure and services in new geographic areas IT Initiative: Implement Cloud Based Provisioning

IT Objectives

IT Initiatives


IT Initiatives Determine Critical Success Factors

Critical Success Factors need to be defined for all major initiatives. These typically reflect culture, organizational and process requirements for success, and measure efficiency and effectiveness.

Example: IT Initiative: Implement Event, Availability, and Service Level Management Critical Success Factor: Event management must be well integrated with incident management and have root cause analysis techniques IT Initiative: Implement Cloud Based Provisioning Critical Success Factor: Clearly defined criteria needed to define when to use public, private, or hybrid Clouds, and the economics of each

IT Initiatives

Critical Success Factors


Critical Success Factors Determine IT and Business Benefits

Benefits are defined based on the new capabilities, and specify the benefits (both IT and business) of the Critical Success Factors.

Example: Critical Success Factor: Event management must be well integrated with incident management and have root cause analysis techniques IT Benefit: Faster isolation of failing components via Single Pane of Glass Business Benefit: Less downtime of critical applications Critical Success Factor: Clearly defined criteria needed to define when to use public, private, or hybrid Clouds, and the economics of each IT Benefit: Optimized utilization of the different platform types allows for efficient staff use Business Benefit: Most cost-effective method to provide faster geographical setup (time to market)

Critical Success Factors

IT Benefits Business Benefits


Benefits are Measured by KPI’s

KPI’s are the measures that allow you to determine whether a benefit is being achieved. KPI’s contain a goal (target) and indicate the progress needed (improvement factor).

Example: IT Benefit: Faster isolation of failing components KPI: Decrease MTTR by 40% for outages involving critical applications

Business Benefit: Less downtime of critical applications KPI: Increase availability of critical applications to 99.5% in 9 months

IT Benefits

KPI’s

Business Benefits

Example: IT Benefit: Optimized utilization of different cloud types allows for efficient staff use KPI: 95% of critical applications will be sourced in a private cloud Business Benefit: Most cost-effective method to provide faster geographical setup (time to market) KPI: Reduce time required to setup new stores in Asia Pacific from 30 days to 1 week

Metrics


Be SMART When Developing Objectives…

SMART Description

Specific Be clear about desired value outcomes. Avoid fuzzy descriptions

Measureable Determine the criteria for measuring progress.

Attainable Can the goal be accomplished?

Relevant Is this goal worthwhile?

Time-Bound When is a realistic time to achieve this goal?


A Well-Defined KPI

Reflects strategic & project objectives:

Measurable:

Controllable:

Actionable:

Simple: Implementable:


Best Practices


Best Practices Governance Without a process for determining value, you increase your chances for failure

Communication / Commitment Commitment starts at the top to commit time and resources and to act upon the information

Process Maturity Must be considered because value goals will often differ depending on maturity

Working Together – 3 P’s Optimum value comes from process, organization, and technology working together

Support the Business IT value is only meaningful when it supports business goals.

Ownership Identify owners of Benefits and KPI’s. Owners are responsible for: • Identification of savings • Verification savings are realized and in budget • Retiring fulfilled benefits and identifying new

benefits


Thank You.

metrics that matter for business and it

Technology