Do metrics / KPIs help deliver real Business benefit?

This week Robert E Stroud posted a message asking whether #itil or #iso20000 metrics were more important in your organization.

RT @wdgll @RobertEStroud ITIL KPIs too broad. ISO20000 reqs are too easy. My choice is COBIT 5 where you are on the ISACA board so u know
@wdgll I am looking forward to #Cobit5 – it will assist business and IT to drive value whilst effectively managing #risk  
So what does the ITIL 2011 Edition have to say.  Continual Service Improvement core volume states that the treatment of service measurement and service reporting has been clarified. Because all processes have an element of measurement and reporting embedded within them, service measurement and service reporting are not considered to be processes.
 

Metric definition – (ITIL Continual Service Improvement) Something that is measured and reported to help manage a process, IT service or activity.

[youtube http://youtu.be/z5N-vPPP8SQ]

Malcolm Fry talks about the power of metrics. IT measures what we can do rather than what we can achieve.  IT must set targets that make sense to the Business.

KPI definition – (ITIL Continual Service Improvement) (ITIL Service Design) A metric that is used to help manage an IT service, process, plan, project or other activity. Key performance indicators are used to measure the achievement of critical success factors. Many metrics may be measured, but only the most important of these are defined as key performance indicators and used to actively manage and report on the process, IT service or activity. They should be selected to ensure that efficiency, effectiveness and cost effectiveness are all managed.

Achieving ISO/IEC 20000. Making Metrics Work – Jenny Dugmore and Shirley Lacy.  This book gives a practical view of metrics and service reports and explains their importance in delivering an effective service and to service improvements.

COBIT 5 describes Enterprise Goal Metrics and IT Related Goal Metrics.  Here is an example of the goals and metrics:

Enterprise Goal – Agile response to a changing businesss environment.

Enterprise Metric – Level of Board satisfaction with enterprise responsiveness to new requirements

IT Related Goal – Adequate use of applications, information and technology solutions

IT Related Metric – Percent of business process owners satisfied with supporting IT products and services

Regardless of whether a service organisation is measuring performance using metrics (efficiency, effectiveness) or KPIs the metrics that matter most are those that are aligned to Business outcomes.  A business metric is any type of measurement used to gauge some quantifiable component of a company’s performance, such as return on investment (ROI), employee and customer churn rates, revenues, and so on.

When a service organisation has identified and deployed the right capabilities major transformation is possible.  Here is an example: 

[youtube http://youtu.be/Ny5S8Kt7Txw]

The key stakeholders for any Transformation programme must be the CFO and the COO.  GBS has freed up $560-$690m of value

It is recommended that a service provider take an “Outside In” approach in order to define and agree the metrics that matter most to the Business. 

To all you Business Relationship Managers or Business Partners, I recommend that you become familiar with the Goals and Metrics set out in the COBIT 5 Process Reference Guide.  This will better enable you to focus on delivering real  benefits to the Business.

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