Measure IT to build trust, credibility, and respect from the rest of the business enabling IT to serve a transformational role.
Introduction
I frequently speak and write on the topics of the IT Value Journey and Measuring the Value of IT. Please refer to some of the articles listed at https://wolffstrategy.com/article-quick-find. For this article, I’ll summarize “What” to measure and also discuss “Who” to measure.
What (and Who) to Measure
The five most important things to measure, and examples of metrics to use, are:
- Customer Service. Measure customer satisfaction vs total cost of ownership and try to continuously improve satisfaction at a decreasing cost.
- Infrastructure. Cyber resilience can be measured by time to detect a threat and time to remediate one. Service availability can be measured by uptime for critical services like email, networks, etc.
- Software Development and Maintenance. Measure the percent of projects completed on time, within scope, and on budget. Measure the cost per story point or function point and strive to deliver more features at a continuously decreasing cost. Measure the timing of error detection in the software lifecycle. Most errors should be found in unit testing where it’s least expensive to fix. If we get all the way to deployment before we find an error, we spent a lot of money to get there, only to return to development. Finally, measure the reliability of production software based on availability and always drive to improve it.
- Project ROI. Return on investment for business projects supported by IT is a critical measure and it forces us to hold business sponsors accountable for the results delivered after investing IT resources.
- Budget Compliance. IT adherence to operating and capital budgets should be a natural for every organization.
Be sure to include these measures and the specific metrics in your IT strategic plan and track continuous improvement quarter after quarter and year after year.
“Who” to measure becomes apparent based on the “what” above. As the CIO, you have direct reports that are responsible for each of these measures. Each of your direct reports should own strategic objectives and goals associated with these measures. And their teams own the metrics as well.
Simply cascade performance objectives down the organization. That single exercise will create alignment that, itself, will improve some of these metrics.
People perform to what they are measured on and compensated on. Performance objectives, merit increases, and bonuses that are strictly tied to these measures and metrics will incentivize your entire team.
Note that there is nothing highly technical in any of this. Rather, it all relates to how IT creates value for the business.
These are metrics that can be shared across IT, throughout the company, and right up to the Board. You can present them in a way that tells a story of IT focus, continuous improvement, and value.
Coming Up
Coaching, and supporting the entire business with effective communication will be the final two topics in this series. Stay tuned for these articles in next week and the following week.
I’ve had the pleasure of speaking with many of our readers and encourage you to continue to reach out. Email Emily@WolffStrategy.com and she’ll be happy to schedule a call with me.
Larry Wolff is the founder & CEO of Wolff Strategy Partners, a boutique consulting firm specializing in Enterprise Strategy Management and Digital Transformation. Larry has served as CEO, COO, CIO, CTO, chief digital officer, and management consultant for public, private, international, and emerging growth companies. His specialties include corporate and IT strategic planning, technology led business transformation, business and IT turnarounds, merger integration and large-scale project rescues. His methodologies span industries and scale to companies of all sizes.