How to create a performance scorecard for your business service management software

I’ve written before about one CIO whose remarks about performance management have really stayed with me. Basically, he told me that to get the business transformation and ROI that he wants from an IT toolset, it’s necessary to have a performance management system to measure its benefits. In my last post, I talked about the importance of being able to measure the benefits of your quality management software. This week, I want to look at business service management (BSM) software.

 

What objectives do customers have for purchasing business service management software?

 

I went out and asked some BSM experts to tell me why IT Operations teams invest in a BSM solution.  I was told that with BSM, IT Operations teams can become world-class organizations that are able to do the following:

 

  1. Manage today’s complex hybrid composite applications across traditional data centers and private, managed, and public clouds.
  2. Run the next generation data centers built on virtualization and converged infrastructure – moving from a device-centric to service-centric management paradigm.
  3. Improve the delivery of service availability goals and reduce service disruptions by improving service performance visibility, reducing the mean-time-to-repair (MTTR), and improving capacity management.
  4. Lower cost of operations through better analytics and automation. And in addition accelerate deployment of fixes for incidents and reduce errors due to inconsistent deployment management.

These are great objectives. Obviously, the first and second are about enabling IT organizations to demonstrate that they can manage and act as a broker of IT services. Just because an IT function is outsourced does not mean that IT is not responsible for quality of IT or Business Services. At the same time, the third enables IT organizations to understand their customers’ perspective on IT performance. One person I surveyed said in their note to me that during a moment of corporate challenge their customer service website had poor performance and then went down because of user demand. And they did not even know this. The last objective says if I monitor availability from the service perspective to the infrastructure type, I can actual prevent incidents and outages. And automation creates great consistently in implementations—reducing self inflicted outages and accelerating deployment for regular issues. Interestingly, you can demonstrate that your organization is achieving your objectives by creating a balanced scorecard for your BSM software. For the purposes of this blog, let’s say these objectives are the reasons we’ve purchased the software.

 

What would go into a BSM Scorecard?

 

So if we follow the four-quadrant model for Norton Kaplan, what key performance indicators (KPIs) should be in the scorecard for the BSM purchase?

 

BSM Scorecard.jpg

 

First Quadrant—IT Value

The first quadrant in the scorecard focuses on IT value—think of goals number 3 and 4 above.  First on my list of KPIs for this quadrant is the Percent of Change in Business Service Cost. This is the ultimate measure of value. If the BSM tool is truly improving processes and reducing downtime, then you should also see cost reduction as well as movement towards best-in-class service delivery costs. Second on the list is the Percent of Failed Business Transactions. If BSM is delivering to its purchase objectives then clearly the customers of IT should be seeing this metric going down. Third and final is Percent of Applications Availability. For most businesses today, if IT goes down the business goes down. There are real costs to the business if this happens. These are both hard and soft costs. To use the example above, how valuable is corporate reputation during a tragedy? This risk should be going down month over month if a BSM system is in place and best practices and procedures are being followed.

 

Second Quadrant—Customer

Moving to the customer quadrant, this is where support is provided for goals number 3 and 4 again (to understand customer perceptions of IT). Here, three KPIs not only show the value of BSM to IT’s customers but also are major drivers of customer satisfaction for IT service delivery. My favorite is the Percent of Affected End Users by Application Quality. This is a kind of a rubber-meets-the-road KPI. End users want IT to run for them when they need it and the more end users feel this is the case, the better the customer satisfaction. In a similar vein, Mean Time between Failures of Services has the same type of impact. This is because IT’s customers feel outages, and if the number of outages are reduced IT’s customers tend to be happier. A mirror to this is the Percent of Met Application Performance. Customers know and feel when things get sluggish. Several years ago, I met a telecom business executive who was noticing that his sales performance was not predictable. He was eventually able to get a plot for application performance and overlay it on sales performance. What he found was when application performance worsened, sales went down. What was happening in this case, was that mall kiosks selling phones had their lines lengthen as performance dropped and many customers either deferred their purchase or went to another cell phone maker. Percent of Satisfied Customers is the final measure of the benefit of Business Service Management. It effectively rolls up all the benefits described above.

 

Third Quadrant—Operational Excellence

For the operational excellence quadrant, there are many KPIs that make sense to track. Specifically, we want to measure the improvement of the event-incident-problem management cycle. The KPIs here will relate to goals 1 through 3 above. KPIs that cover this include things such as: Percent of Available Services, Percent of Met Service Performance, Percent of SLAs met, Percent of Applications Availability, Percent of Met Application Performance, Percent of Monitored Applications, Downtime Percent of SLAs, and Percent of SLAs Planned to be Expired . There are a lot of KPIs above, but these are nuts and bolts of creating well managed business services. Together they measure the effectiveness and efficiency of service level management.

 

Fourth Quadrant—Future Orientation

In future orientation, we want KPIs that among other things measure improvement in the practice of Business Service Management. Here, two things show future orientation: Percent Monitored Applications and Percent of Satisfied Customers. Growing the monitored applications means that over time you will be able to better manage and control the lights-on business of IT. If the percent of satisfied customers is grown, this means that service orientation is delivering and growing the value. These obviously relate to goals 2 and 3 above.

With this said, we would like to hear back from you. What measures would you put on a business service management success scorecard? Where do you think we are missing something from the above list?

 

Related links:

 Feature:  Peak performance demands precision control

Solution page:  IT Performance Management

Twitter: @MylesSuer

Comments
balanced scorecard software(anon) | ‎06-26-2012 10:12 PM

 

Awesome post for business service.Thanks for share this.

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About the Author
Mr. Suer is a senior manager for IT Performance Management. Prior to this role, Mr. Suer headed IT Performance Management Analytics Product ...
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