Modern Middle Manager
Primarily my musings on the practical application of technology and management principles at a financial services company.
Executive's Guide to IT - Chapter 16

Monday, January 19, 2004  

Chapter 16 is about IT performance measurement. As the authors note, just about every other department in a company has some kind of measurement, be it sales, customer service levels, business retention, net income, etc. What isn't measured can't be improved. The authors suggest creating an IT dashboard to identify areas of measurement. Their gauges are:

IT investment
Investment return
Infrastructure and operations
Project delivery
Customer satisfaction
People development

An example they use is that of sales -- how does the IT area contribute to sales, and what key metrics can be used to track that contribution? Once a baseline is performed and priorities established, the IT department can be measured against the metrics and, so goes the theory, improvements found. For example, desktop metrics can be created to measure total annual cost per seat, desktops per employee, total desktop support ratio and help desk staff per seat.

My company does this in the realm of dollars and downtime. I have justified my budget numbers in the past by identifying industry benchmarks and making sure I was reasonably close (+/- 10%) to them. Numbers such as IT spending as a percent of revenue, IT dollars per employee and IT employees as a percent of total employees are used to indicate how profligate (or not) we are. Downtime is a huge concern on the banking side of the house, so we try to be as tight as possible with unplanned downtime. This goes to the heart of our project planning process and disaster recovery. Taken to ridiculous extremes, I would be identifying which portion of each capital outlay and/or application development project is devoted to reducing downtime and come up with a dollar figure to compare downtime with for a final metric. In a company our size (revenues < $25mm) I'd say that's a step too far.

What else should we be measuring? I look at help desk calls (reduced over 44% during the trailing twelve months), future outlays (I promised that server-based computing would cut down costs and those outlays are easy enough to track) and major application development projects. A formal dashboard would be interesting and I'll have to look into other ideas. Hmm.

posted by Henry Jenkins | 1/19/2004 06:01:00 PM

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