Don’t purchase an IT service management tool without being able to measure and realize its benefits

ITSM.pngA year ago, I met with a CIO from a Global 50 company. His team was in the decision-making process for the purchase of a new service management tool. When we discussed IT performance management, he said that no one else had talked to him about it. All the vendors on their short list had only mentioned the ROI for buying the tool itself.  He went onto say that having a performance management system with a service management tool means that they can drive the business transformation and ROI. These were his goals in purchasing the new service management tool in the first place.

 “What I need is best practice KPIs to measure along the journey,” he said. In many respects, this is like Weight Watcher’s online service that lets you see when you should take the personal corrective action to achieve your weight loss transformation.

 

What objectives do customers have for purchasing service management software?

Over the last year, I have asked some of our most savvy customers what their typical reasons are for purchasing a service management tool.  Here’s what they told me:

 

1) To implement an industry-standard IT service delivery model

2) To achieve the benefits of ITIL to people, process and technology including: reduced IT costs, increased application availability and increased customer satisfaction

3) To align better with the business by providing customers with service level agreements and the reporting and metrics that come from having goals

 

These are all great objectives and creating balanced scorecards for each service management process—incident, problem and change—will drive the process improvement that make the purchase business case.  A balanced scorecard can demonstrate that service management is achieving the desired benefits. Clearly, this scorecard should be based upon the goals that IT set for the purchase. For this blog, we will use the three objectives mentioned above.

 

What would go into a Service Management Scorecard?

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

 

The first quadrant in the scorecard should focus on IT value. I recommend that the first IT value KPI should be the percent of the variance between actual versus planned costs for the service management software. This includes the physical software cost or subscription, plus the total hardware and implementation cost across all phases. Then you need to ask yourself, “Did I actually live by my planned cost and do I have the potential to really deliver the estimated ROI?” I would also look at derivative KPIs for business value as well. These include the percent change in business service cost reduction over time.

 

Moving to the customer quadrant, I want to see the benefit coming out of goals number two and three listed above. Here KPIs that make sense include: the percent of available services, percent of service performance achieved, the average outage duration and mean time between failures to services. These should all be showing improvement for real the value derived.

 

For the operational excellence quadrant, many KPIs make sense here to track change. In this quadrant, we want to measure classic ITIL improvement.  These include things such as:  the mean time to repair, percent of re-opened incidents, percent incidents resolved within SLA, percent of changes that resulted in an outage, percent of unauthorized implemented changes, percent of emergency changes, the change success rate and the restore operations success rate. These should be showing month-over-month improvement from the service management process investment.

 

For future orientation quardrant, we want KPIs that measure prior and post employee and customer satisfaction from the business process change. It would be normal to expect a spike in dissatisfaction as the change occurs, but as time rolls on this number should go down.  As well, the percent of service desk employees meeting training goals should be measured. Clearly, if training is not taking place, employee frustration and sentiment will go up and down respectively. These two measures together provide a rather complete view of the success of the service management implementation.

 

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

 

Related links:

 

Solution page:   HP Service Management

Solution page: HP IT Executive Scorecard

Twitter: @MylesSuer

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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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