Measuring IT Processes: Moving Outside the Technology Silos Can Yield Major Benefits

July 18, 2006 —

When IT departments measure themselves, they typically focus on technology-based data-for instance, what is the total cost of ownership for Windows versus Linux servers? While this information is good to know, the real value in IT measurement lies in process data, says Kelly Bedrich, APQC's director of information technology. APQC sat down with its resident IT expert to explain why IT groups should focus on their processes.

APQC: What is the current state of IT measurement?

Kelly Bedrich: It is unusual for IT to measure by process, as everyone now measures by return on investment of a system. But other IT processes that are the cost of doing business should be viewed as well, such as the base cycle times to issue resolution for a help desk call, the cost to support systems, the number of FTEs needed to support your applications, and the overhead cost to manage these processes. These have little to do with technology, but they are very important.

APQC: What processes should IT organizations look at, and which metrics should they use?

Bedrich: APQC captures standard measures and computed performance ratios related to eight main groups of IT management processes listed in its Process Classification FrameworkSM (PCF). The PCF organizes these processes and functions as horizontal, cross-functional sections rather than the traditional technology silos such as hardware, software, and networking as well as more specific applications such as data warehousing and CRM. Instead, metrics are examined in areas including IT organization, IT planning and management, IT development and maintenance, and IT operations. Each of these has process-based metric categories such as cost effectiveness, staff productivity, and cycle time. To download a copy of the PCF, please visit www.apqc.org/pcf.

APQC: With all of the demands on IT today, why should organizations take the time to gather and analyze process data, either on their own or through third-party research?

Bedrich: Most IT organizations don't have a grasp of how they compare process-wise to their peer groups, and this gives them an opportunity to learn that. From a strategic perspective, IT is commonly viewed as a commodity, and if an IT organization can show that it is meeting needs faster than an IT group from another company-and with better alignment to the company's strategic goals-then that's a competitive advantage. From a cost-savings angle, they can show that they do more with less, faster, and more cheaply compared to others in their industry. If IT organizations do find they're behind on some measures, that gives them something to work toward.

APQC: Who needs to be involved in the gathering of IT process data?

Bedrich: Some organizations, especially smaller ones and those that outsource, may not have easy access to this information. In more mature organizations that have the data available, two people should definitely be
involved: 1) an IT financial controller, from a budget standpoint, and 2) someone in the project management organization who has access to project-related data. Once they gather the information, they can benchmark it internally against other stand-alone IT organizations' data or against other companies'. Organizations also can include the data in a research study that APQC is conducting-our Open Standards Benchmarking CollaborativeSM (OSBC) IT benchmarking will enable them to compare their data against that of their peers.

APQC: What are the benefits that organizations can expect to see if they compare their process, rather than just their technology, data against benchmarks?

Bedrich: The results of doing so will allow them to learn and do more with less. They'll be better able to justify budgets, improve customer satisfaction, and better align their IT strategy with the requirements of the company. They'll also be able to differentiate their organization. For example, speed is critical. If one organization is able to roll out an application faster than its competitors, that's significant.

APQC: What type of support can APQC offer organizations that want to benchmark their IT processes?

Bedrich: As I mentioned briefly, our OSBC IT benchmarking research will help organizations identify and analyze inefficiencies within typical processes. Participants will see the comparative budgets, costs, cycle times, FTE distributions, and productivity measures of each IT process outlined in APQC's PCF across their peer group by revenue size and industry. It will show participants where they are ahead of or behind the curve in terms of budgets, costs, and output/performance metrics. Improved IT alignment with business strategy is the real end game.

To learn more about participating in APQC's OSBC IT research, please visit http://www.apqc.org/osbc/it.

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