What do real-life CIOs need to measure?

CIO Picture.jpgI’ve written before about what measures IT leaders should be tracking to achieve IT transformation and demonstrate increased business value. Now I want to share what I’ve learned from talking to real-life CIOs about what they want to measure and how they should be measuring themselves. My analysis is based upon interviews of a diverse group of CIOs from the following organizations: 

 

  • A global insurer
  • A major US insurer
  • 2 major regional banks
  • A major retail chain
  • A major oil and gas manufacturer
  • A major healthcare provider
  • A worldwide consumer goods company

What do CIOs Care About?

Obviously, this isn’t exhaustive research. But I do feel that I did get a pretty good sense about what CIOs care about. The first insight is that CIOs have not only become more of a business person in the last few years but they have become what some have labeled an “analytical CIO.” Every CIO that I talked to clearly wants to measure better and to use more timely information to manage better.  

 

Additionally, CIOs I talked to wanted to demonstrate that they and their teams were i in control of projects, services, and most of all costs. For these, they want to demonstrate as well that they have the ability to deliver consistently. And for many, this means showing that they deliver well against a benchmark or industry best practice. This means for those with a regional CIO model that they want the ability to consistently measure and deliver across regions and working groups.

 

For example, when I asked about the ability to drill into data or cascade into reports performance, one CIO said in all seriousness that he wanted to “within three clicks to know who to yell at.” I would say that this demonstrates an overall desire to drive personal accountability for themselves and their teams. This same CIO said that he simply wants to know where he is strong and where he is weak. This was why he greatly valued the ability to cascade metrics through his organization. At the same time, he and other CIOs wanted the ability to drill into, programs that have caused them to fail to meet a business goal.

 

Measure.jpgWhat do CIOs want measured?

In terms of what CIOs wanted to measure or be measured by, here are the most common themes that I heard back from the CIOs that I interviewed:

 

  • IT costs by line of business
  • Percentage of key objectives that align to the corporate strategic plan
  • The percentage of projects associated with business objectives
  • Supply versus demand for skills for development work and the projects affected
  • Application availability and health
  • Audit and compliance risk
  • Vendor delivery performance against goal
  • Quarter-over-quarter reduction in service costs
  • ROI for the life of asset and IRR (internal rate of return), ROI, and NPV (net present value) for programs  

 These are all good things to measure. I think it paints the picture of a CIO that is more development focused than service focused. Personally, I think both perspectives are valid and that CIOs need to increasingly ask questions like, why are we still spending money here? Or, how can we improve the quality of this service or application?

 

How should CIOs measure themselves?

 My recommendation is that CIOs measure themselves in a balanced scorecard by the following areas and specific measures:

 

  • Budget Control Improvement (% Variance of Actual vs. Planned Costs, Average Cost of IT Delivery Per Customer, % of Change in Business Service Cost, and % of IT Cost versus Corporate Revenue)
  • Innovation Spend Improvement (Innovation Delivery, % of Actual vs Planned Projects Cost)
  • Projects Tied to Business Objectives Improvement (% of Projects Associated with Business Objectives)
  • Overall User Satisfaction Improvement (% of Satisfied Customers)
  • Service SLA Improvement & Outage Reduction (% of SLA Met, %  of Met Application Performance, Downtime % of SLAs, % of SLAs that are responded to correctly)
  • Project Execution and Health Improvement (% Projects on Time, % of Healthy Projects, Average Project Initiation Time, % of Projects at Budget Risk)
  • Security and Risk Reduction Improvement (% of Compliant Servers and Network, Number of Applications/Servers with Non-Encrypted Data, Mean Time to Recover of Business Data, Restore Operations Success Rate. For more, see my recommendations on what CISOs should be measuring, please see “5 ways to measure the success of a security and risk management strategy”. )
  • Employee Retention and Improvement (Employee retention rate, employee training, and other employee related matters are currently a future within the HP Executive Scorecard.)

 One thing to absolutely notice is the word improvement. I believe strongly that the bar should change for KPIs. This why ITIL stresses “continual improvement.” Every quarter we should have a goal that makes us better than the previous quarter. This is my recommendation to CIOs and IT in general.

 

Related links

 Feature:  Peak performance demands precision control

Solution page:  IT performance management

Driving Relevance for VP of Applications

How the VP of IT Ops can better drive business relevance

Driving Third Wave Businesses: Setting an information strategy as well as 5 ways to measure success

5 ways to measure the success of a security and risk management strategy

Twitter: @MylesSuer

Labels: IT strategy
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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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