In today’s fast-paced digital world, innovating and investing in the right IT technology is essential in order to remain competitive. However, demonstrating the value of the services that IT teams build and deliver is surely one of the greatest challenges that CIOs are facing in 2020.
Even in today’s digital age, what IT does is often seen as a ‘black box’ by business leaders, who do not always understand how IT contributes to achieving business goals. Similarly, according to a recent survey conducted by Gartner, only 7 percent of organizations are successful at demonstrating business value IT (BVIT) and over 45 percent of them do not even have a formal way of measuring. In this context, IT projects and investments can be perceived as meaningless if returns on investments are not delivered.
So, the question is: what can you do to effectively demonstrate business values to business leaders who do not have an IT background?
Traditional Infrastructures and Operations (I&O) metrics (e.g. service reliability and cost-efficiency) fail to summarise the contributions of I&O in delivering business value. This may cause enterprises to downplay the relevance of I&O in supporting digital initiatives, leading to the reallocation of resources to other areas of the business.
Taking this into consideration, below we have listed the main challenges that CIOs face when presenting IT Key Performance Indicators (KPIs) at management meetings:
1. Fear of Transparency
Reluctance to bring the data to light rather than identifying the weaknesses to correct them.
2. Data Freshness and Analysis Lag Time
If the I&O team don’t assess their data frequently, I&O leaders are less likely to deal with issues before they escalate.
Many I&O leaders find difficulty reporting the right IT metrics especially if they don’t have access to software built specifically for calculating accurate IT metrics and are using general-purpose tools instead like spreadsheets, corporate finance systems, and business intelligence systems.
4.Data Availability Bias
This is the tendency to focus on data that are easily available. Choosing certain operational metrics may not highlight operational efficiency.
problems in a more responsive way.
Data is not the challenge, making sense of it is…
“We need an awesome dashboard!”
Does the above statement sound familiar to you?
Whether you’re a seasoned IT leader or a relatively new support manager, the idea of creating an outstanding dashboard displaying a number of technical metrics might have come across your mind prior to presenting at your upcoming management meetings.
But, have you ever put yourself in the shoes of someone, who does not have an IT background?
When looking at the majority of business practices and leadership hierarchies within small and medium organisations, it still seems to be common practice to not include IT leaders in board quarterly meetings and, more often than not, senior decision-makers do not have an IT background nor have an adequate IT knowledge.
In fact, according to Gartner's recent research, 25 percent of IT Operations leadership roles consist of individuals, who do not come from an IT Operations background. In addition to this, Gartner predicted that by 2025, 65 percent of I&O leadership positions will be filled by individuals that have no I&O experience. According to Roger Williams, senior director analyst at Gartner, the reason why CIOs are filling I&O leadership positions with individuals from outside I&O is because to shake things up and are more likely to focus on rapid change and take adaption to new technologies as a priority.
As a result, not only might technical metrics make no sense to leaders at the top of the organizational hierarchies, but they might also appear to be meaningless to those within IT Operations over the coming years.
This trend is also reflected in their IT counterparts, as an increasing number of CIOs reported that they do not even present IT KPIs during management meetings.
At the end of the day, if people do not understand the messages you are sending, why should you even bother?
Which metrics should you measure?
For many years, it has been common practice for CIOs to thoroughly measure their set KPIs to provide their colleagues with an overview of how well the services have been performing.
To give you an example from the Service Desk industry, ass an IT managed service provider, we provide our clients with a good-sized basket of metrics and KPIs, which relates to the efficiency and effectiveness of the service desks we manage.
Likewise, as shown in the below graph, the Service Desk Institute (SDI) Global Best Practices recommend thirty-nine different metrics that any Service Desk should measure and monitor on a regular basis.
(The SDI Global Best Practice standard specifies 39 different metrics that a service desk should measure, monitor, and report on; this question contains 20 examples from the standards).
When looking at the above graph, it can be instantly noticed that the most commonly measured service desk metrics are the number of incidents and the number of service requests.
However, while these metrics reflect the capacity of a service desk, they do not demonstrate the business value that the service desk provides to the business.
On the other hand, only respectively 16 and 17 percent of CIOs tend to measure cost per incident and service request, which, are indeed representative of the cost-saving economic value that a Service Desk can offer to the business. For instance, these metrics can be meaningful when creating a business case to demonstrate the value of an investment in new technologies.
“The Plan-Net Perspective”
In order to address the above challenges and effectively demonstrate the business value that IT services can offer to the business, I&O leaders must reinvent their KPI scorecards.
Instead of focusing on what data you have displayed on your dashboard, you should rather question yourself on what story they can tell someone who does not have an IT background nor is interested in making an effort to understand their meanings.