Leadership - Defining IT Performance Measures

September 16, 2008, 1:10 PM —

Determining and establishing performance measures prior to a project's planning process assists in defining if the project was successful. Measurements assess whether the IT initiatives align with business strategies, ensure that the funding allocated was appropriate based on organizational priorities, and demonstrate that your investment produced the positive results you expected. What should those performance metrics be measuring?

 

For every IT initiative and project, key performance indicators (KPIs) need to be defined. KPIs are concrete, measurable indicators that can be used to report the progress of the project or the new result against its predefined goals.  It is vitally important that realistic, measurable telemetry are used in the planning stage.  Changing metrics after a project has begun or at its completion obviates the ability to measure project success, or where along the implementation process the project could be improved for a more rapid deployment in the next iteration. Additionally, changing metrics in mid-project makes it difficult to measure the project's total value to the company.

 

Established metrics identify the strengths and weaknesses of each project plan, providing the continuous feedback loop necessary to make incremental improvements providing continuous process gains.  There are five major areas for defining projects. Each area must have specific, measurable KPIs to establish the project's value to the company.

1. Time to delivery. The telemetry for this metric need to include major and minor milestones along the defined project roadmap. Keeping an eye on meeting the milestones will help project managers and the IT Governance team determine if the initiative will meet its deadlines.  The metrics used here will assist in understanding what is working well in the project plan so it can be used again in future projects.

2. Project budget. The metrics used in project budgeting aid in identifying hidden costs and where they show up. Examples of hidden costs that can get overlooked include things like required software and firmware upgrades to support a specific application, additional management tools needed to support the application going forward, unanticipated downtime due to interoperability issues, and overhead associated with day two support and services.

3. Application performance. The metrics used here identify the overall impact on the infrastructure that a specific application has; it also identifies application dependencies. One of the most commonly over looked application performance issues stems from implementing voice of IP.  The application characteristics for voice are inverse to those for data-centric applications. Voice on the network needs to be defined as a high priority application so that delays and dropped packets are avoided.

4. User adoption. These metrics identify the benefit of the initiative to the overall company. The greater the user adoption, the greater the benefit to the firm. If user adoption is low, IT can take steps to increase user adoption through training and education thereby increasing the value of the initiative to the company.

5. Cost savings and revenue generation. These metrics measure the fiscal value of the initiative to the overall company. Cost savings measure the impact on bottom line financials, while revenue generation measures top line improvements.

 

It is important to define concrete metrics. There are some technologies where soft metrics are being used to define value. A firm should become very alert when a vendor or internal team starts promoting an initiative in terms of soft metrics. Soft telemetry generally involves emotional measures. By sticking with firm metrics, IT will be able to determine the value of the project to the company as a standalone effort as well as relative to other IT initiatives.

 Later this week we'll cover how establishing an e-Business helps a firm improve its customer care lifecycle.