The Magnificent 7: Key KPIs to help IT perform better

By Myles F. Suer, Planning and Governance, HP Software

 

magnificent seven.jpgWhen I was young, the cool movie to see and talk about was “The Magnificent Seven”. For those that do not remember, the movie was about seven gunslingers that help a town take on an army of bandits.

 

Perhaps the movie works so well because there are seven heroes. Psychologists have found that the maximum things that the human mind can think about at one time are seven. Recently, as customers have started asking me what they should measure in IT, I have come back to the notion of a “magnificent seven.” Which key performance indicators (KPIs) would be on my list to truly make IT organizations better?

 

The first and most important KPI—change success rate

 

I believe that change success rate is the most important KPI. It sits at the confluence of “change the business” and “run the business.” And more important, the change success rate is predictive for the success of running the products of IT, services. Well, it’s simple. Most outages are self inflicted according to ITIL Version 3.0. Remember, the quality of your change process determines the quality of your delivered services and is, therefore, a huge predictor of customer satisfaction. Finally, improving the change process of a company can take cost out by reducing the volume of incidents and changes. It is like that old car adage, “You can pay me now a small amount or you can pay me later a much larger amount.” It’s your choice.

 

The second most important KPI—Percent of emergency changes

 

Second on the list is the percent of emergency changes.The percentage of emergency changes is a really important  KPI. If high, your change process is in trouble. It means you are recording changes—a good idea—but mostly after the fact. This means you are left to a reactionary process and more likely to experience  an outage- leading mistake. To improve, this percentage needs to be small and emergency changes should be rare.

 

The third most important KPI—Percent of SLAs met

 

I know that many of you would have expected this earlier on the list, but it did make the top three. The third most important is the percent of SLAs met. Clearly, IT is in the business of delivering services. In manufacturing terms, an SLA failure amounts to product that did not get out the door versus plan. When we stop delivering availability to plan, we stop delivering products to customers. And while many IT organization do not make revenue; for the business, this may mean that we stop delivering products to customers.

 

The fourth most important KPI—Percent of healthy projects

 

The fourth most important KPI is the percent  of healthy projects. Project Management is probably the most aligned area of IT. Most customers that I have met are actively involved. However, the place where we can determine whether the business will be happy is the percent of healthy projects. It shows whether IT will deliver and whether it is managing well the investment provided. As an index, the percent of healthy projects blends together schedule, expenditure, and issues, it tells you how you are doing at managing “change the business”.

 

The fifth most important KPI—Percent of first call resolutions

 

The percent  of first call resolutions is the fifth most important KPI. I hate it when a support person cannot solve my problem immediately or I get escalated multiple times without an answer. ITIL Version 3.0, for example, has a number of metrics that look at when a first line representative involves a later stage agent to solve a problem without escalating or escalates a customer to an agent who cannot solve the problem (i.e. there is more than one escalation). These are important. But I find the percentage of first call resolutions an ultimate barometer of customer satisfaction.

 

The sixth most important KPI—Incident aging

 

Incident aging ranks sixth. This is because when combined with Incident Volume, it allows you to know that one or more IT processes are in trouble. Why do I say this? A couple years ago, we had a customer give us their incident data. This one analytic showed that they had problems with their change and incident processes. Why? We noticed that incident count tripled between October and November and single day resolutions went down by 75%. When we asked the customer what caused this result, we learned it was a rush for end-of-year project delivery. In this case, poor change management was causing a poor incident response and, worse yet higher costs, as the incident team tried to respond to increasing incident volumes.

 

The seventh most important KPI--Variance between actual and planned costs

 

The percent of variance between actual and planned costs is the final KPI. It is very different than the previous KPIs because it shows how good IT is as a steward of business investment. High variance-- whether it is positive or negative or both--shows an IT organization that is out of control and that some IT processes are failing. A CIO that I work with often says that you can’t understand the quality of processes without understanding the quality of the financials.

Many of you may have noticed at this point that I did not have the percent of satisfied customers in the list. That’s because if you measure 1-5, than your customer satisfaction should be excellent. So now you have it, The Magnificent Seven KPIs to help you manage your organization.

 

Related links: 

Feature:  Peak performance demands precision control(

Solution Brief: IT Performance Suite

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About the Author
Judy Redman has been writing about all areas of technology for more than 20 years.


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