Showing posts with label operational effectiveness and efficiency. Show all posts
Showing posts with label operational effectiveness and efficiency. Show all posts

September 28, 2007

Getting Performance Metrics Right

Architecture and Governance Magazine, Volume 3, Issue 3 has a great piece on developing “Metrics that Matter”.

The idea is that metrics are a critical management tool for tracking, managing, and ultimately, changing organizational behavior!

All too often, organizations do not develop or keep metrics on anything below a top-level organizational view, and even then just develop metrics that either make them look good (i.e. the metrics are very achievable) or that are easy to measure (i.e. the measures are readily available from existing data).

Organizations cannot really drive improved performance if they do not measure systemically and strategically thoughout the enterprise!

For IT metrics, Architecture and Governance Magazine proposes that we use three core categories of metrics:

  1. Strategic Value—The most difficult area to measure, but one of the most valuable from the business point of view; it “identifies the degree of a business unit’s effective use of technology,” to achieve mission execution and and results of operation.
  2. Project Management Effectiveness—this should “cover the quality, scope, and milestones…includes schedule adherence, functional delivery requirement specifications, and—the least often measured—return on investment for several years after deployment.”
  3. Operational Effectiveness (And Efficiency)effectiveness, which is the more important metric, involves measuring such things as customer satisfaction, cost-savings, income generation, or ehanced mission capabilities; efficiency, on the other hand, is where IT leaders often “drown executives in operational data such as help-desk resolution times and network uptimes—data that is meaningless to the corporate strategy and cements IT’s reputation as being little more than a janitorial service for technical systems.” Additionally, “if they demonstrate only efficiency, they play into the bean-counter mentality that all that matters is extracting more efficiency from the system. That’s an easy road to continued cuts…‘this cost focus had led to the suboptimatization of IT’…[and] can even lead to the eventual outsourcing of IT.”

In general, emphasize the top 2 categories of measures, and focus only on the 3rd “if the IT department has a history of failure and thus needs to be closely monitored on the basics.”

Finally, “a good rule of thumb is that there should be less than a half-dozen key metrics provided to executives…if they need more detail, provide the drill-down capabilities, but don’t make it part of the standard report.”

In User-centric EA, performance metrics are one of the primary perspectives of the enterprise architecture (which include performance, business, information, service, technology, security, — and human capital, in the future). The performance measurement view of EA is the pinnacle of the architecture, where we identify mission execution and results of operation goals and then track and manage to these. The performance measures cascade throughout the organization to build performance results, bottom-up, to achieve mission execution and the performance goals set at the highest levels.

Additionally, IT needs to take a front position (i.e. lead by example) in developing and managing to solid performance measures that not only demonstrate the effectiveness of its utility operations, but that demonstrates effective management of new IT investment dollars to bring new and enhanced capabilities to the end-users and most importantly, that it adds to the strategic results of the enterprise.


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