Every department needs to develop key performance indicators to measure performance. IT is no exception. In fact, it is probably more important for IT to have a set of KPIs to show overall performance in the business. This supports the mission of IT to add value to the organiztion. For my department I have been tracking the following KPIs. I have been tracking on a weekly basis to keep an eye on trends that may develop. Your organization may be different but I would recommend that you track with more frequency then less.
Percent of IT cost vs. total revenue of the
Percent of keeping the lights on cost compared
to the total IT cost
Dollars saved due to productivity improvement
Average seat/resource cost trending over (Month
to Month)(Quarter on Quarter)(Year to Year)
Actual spend vs. budget (Month to Month)(Quarter
on Quarter)(Year to Year)
Percent of projects completed within schedule
Percent of projects exceeded their original
schedule and/or budget by xx % (we use 10%)
Percent of project time consumed by rework due
to defect fixes and scope changes
Number of known defects released to production
Percent of projects initiated without an
approved business case
Business critical system/application uptime
Average turnaround time for fixing production
Number of production incidents by severity
Percent of service requests/tickets closed
within the SLAs
Average time to resolution for service tickets
Business time lost due to unscheduled downtime
Number of security breaches/incidents in systems
Percent of systems/applications compliant to
Percent of security patches applied within
The above KPIs have been graphed in Excel using the raw data collected. Again I track on a weekly basis which make it easy to slice and dice the data when asked. We have now started the process of incorporating this information into a dashboard format. We are using a product from iDashboard to help convert this data. It is recommended that a developer be involved to write scripts to interpret this data. Taking raw Excel data and importing in iDashboards was not clean and required additional coding. The end result will be to see this information in a clean graphical format wit the push of a button.
As a CIO or department head it is important to establish a uniform practice of performance evaluation and tie staff compensation directly to performance. Many firms struggle with this task. Many IT shops fail at it. Staff management is the one area where there is no how to book. Instead, it is mostly trial and error-mostly error.
Staff performance should be evaluated in various categories that align with your company’s vision and goals. Depending on the needs of the business one or more categories may be focused on for improvement.
For example, for my staff I used 3 KPI each with a weighted percentage:
1. Leadership/Professional Development=30%
2. Financial Performance=10%
3. Core areas=60%
Overall leadership /professional development skills demonstrated for employees will be measured in the following key areas:
Critical Thinking/ Problem Solving
Examples of leadership and management skills that may be demonstrated are provided below. The lists below are examples to be used in employee’s individual annual goals. Not all examples under each core area must be included.
Critical Thinking/ Problem Solving
• Carriers out systematic and rational analysis to identify the root cause of problems
• Provides feedback, input and support to the other parts of the organization for overall organizational improvement
• Assists in the development of policies and procedures
• Understands contract drawings and specifications & the impact on field work
• Seeks continuous improvement by considering solutions that make novel use of existing ideas, approaches, technologies or products
• Carries out systematic and rational solutions to complete the task required
• Works to coordinate efforts/resources within and across teams to deliver on goals
• Recognizes the importance of teamwork to achieve objectives; brings in ideas, information, suggestions and expertise from others outside the immediate team.
• Builds strong team relationships within and across teams.
• Proactively supports colleagues and collaborates with them to help achieve targets.
• Involves the right people (colleagues, vendors) to ensure the best decisions are made in a timely manner
• Takes personal accountability for achieving individual and shared goals.
• Works to plan well in advance and initiates action to move projects forward.
• Manages time effectively, monitoring performance against deadlines and milestones.
• Knows when to escalate decisions and when to make on-the-spot decisions
• Communicates openly and confidently.
• Influences, and convinces others in a way that results in acceptance and agreement.
• Shapes conversations to ensure focus and understanding.
• Speaks frankly, debates at the table, not afterwards; engages in constructive confrontation.
• Is a supportive listener.
• Ability to clearly communicate when appropriate.
• Ensure development plans are completed
• Actively participates in midyear and annual performance reviews with supervisor in a timely manner
• Identifies development needs and take advantage of the training made available.
• Provide the necessary resources and support for the training efforts.
• Participate in industry/core area based events and organizations to gain knowledge and expand the company brand
• Engage in ongoing development, support and refinement of the mentoring program
In each of the above area, performance will be evaluated against the goals using the performance metrics agreed to at the beginning of the review period. The Professional Development / Leadership Index will be the sum of weighted scores in each of the above areas.
Overall financial performance on the assigned projects will be measured by the follow Cost Management. Effective cost management is critical in understanding cost drivers and keeping them low to maximize the profitability on the projects. Besides good knowledge of the project, effective cost management practices require our project team to know what the individual cost items’ control budgets are, as well as actual cost incurred and projected cost to complete.
1. System Infrastructure
2. Application Management
3. Support / Helpdesk
4. Compliance & Controls
In addition, each position will be evaluated specific core functional areas. These core areas will be included as part of the goals for each employee.
Is there a rule of thumb for the number of IT staff to the number of end users? No.
No two companies are the same. If that were the case there would be a hard and fast rule we all would follow. So comparing the ratios of man to machine will not determine the correct ratio. IT staffing ratios might come into play in larger companies. Efficiencies of scale coupled with segregation of job responsibilities allow larger companies to trend those ratios to some pretty high numbers. But even in these cases I would be cautious.
Take a step back and ask the following questions:
How many systems do you need to manage?
How many customized systems do you need to manage?
Is your business complex?
What is the geographic structure of your business and locations?
Do you have a standard operating environment in place?
What is the level of your infrastructure (laptops/ pcs/ servers/ printers/ backuptools, connectivity ) etc?
What is management’s approach, how much support do they want and in what time frame?
How many help desk calls are you receiving?
Are the help desk calls emergencies, regular maintenance, user errors?
Are help desk calls occurring 24×7?
Is there adequate backup to the handle workload when staff are sick, on vacation, etc?
Your answers above will determine the adequate number of IT staff to support your business environment.
Every organization is looking at understanding IT performance. As a department, IT should be vigilant at applying information processing capabilities that benefit the business. In order to meet this requirement IT must provide the following services while managing costs and prioritizing requests to optimize value:
Operate and support the infrastructure required to process, store, secure, and communicate information
Operate and support the business applications that process information
Provide technology consulting, training, and planning services
Employ, train, and deploy staff required to provide these services
Plan, develop/purchase, test, and implement new infrastructure or software to fix problems or
provide enhanced information processing capabilities to the business
Every organization will have slightly different metrics for measuring IT performance. For my organization I have decided to report on the following:
Helpdesk tickets –Number of open vs closed
Network outages – Number of hours wan circuits are down vs SLA
Software development life cycle (SDLC) – Number of projects in each phase of the SDLC and average times in each stage.
Email – # of emails entering the organization vs being blocked due to spam, virus, etc.
Equipment uptime – Average equipment availability
Project budget – Approved estimated budget vs actual and % completion
Application performance – average availability
Some of the metrics represent averages while others are reported in the form of a graph. I have decided to report these metrics on a regular basis (monthly is the minimum recommended reporting period),so that I can spot trends across the reporting periods. In some cases the trends are more important than the actual value. No averages can hide significant problems. Some of the data elements are designed to identify significant problems that may go unnoticed by simply reporting averages. So in some instances I am capturing specific data points with a roll up.
One question that is always at the forefront on the minds of CIOs is what metrics to present to the business that is relevant. IT executives, generally have a tendency to present a vast array of data-most of which are irrelevant to business executives. The secret is presenting only a few key metrics.
Most IT metrics tend to be IT-centric and operationally focused on underlying technologies, such as WAN availability or server downtime. It is difficult for business execs to understand these measures and provide little insight into the value that IT delivers. As a result, the business typically focuses on the one metric that they understand — the cost of IT and how to reduce it — and this leads to a continuous cycle of cost reductions and the continuous statement that IT is only a cost center.
There really are a few metrics that make sense to present:
1. IT Investment Value – Present the value of IT investments by looking at the cumulative return of the entire portfolio
2. IT Spend – New investments versus operational spending
3. Service Availability – IT performance compared against service-level agreements
I have been privileged in my career to work with seasoned executives who understood technology and knew how to use it to grow their business. These were not techies but people that saw the power of the computer as a tool.
The fundamental problem that leads to a break down between business and IT is the lack of communication from both sides. The questions that should be asked and answered are the following:
· What are the expectations that need to be met?
· Are there clear goals that can be achieved?
· What information should IT be reporting on a regular basis and in what format?
· What metrics are helpfulful?
· Are the goals of IT aligned with those of the business?
I have seen in many organizations where IT has no clear direction. This is usually a failure of the CIO to articulate a vision. More so it is a lack of communication which leads to the breakdown of communications and the resulting disconnect and dysfunction between business and IT.
It is important to establish an effective relationship between your business leaders and your information technology group.