9 Key Metrics for IT Success
By John Edwards
Is your IT organization a business champion or a burden? Here’s a look at the essential KPIs for gauging IT’s business effectiveness, including digital transformation.
It’s strictly a numbers game when it comes to measuring the various aspects of IT success. Positive KPIs generally indicate that all is well with specific IT operations and services. Negative numbers, on the other hand, warn that IT efforts may be headed in the wrong direction or are already actively damaging enterprise goals.
In a world awash with IT-relevant KPIs, a few stand out as truly insightful. Here’s a rundown of nine fundamental IT metrics — both internal and customer-focused — that matter most.
While it can be tricky to measure, utilization is a fundamental IT success metric. “IT in general has a reputation for unsuccessful projects and costly, underutilized tools,” says Jason Rappaport, president and CEO of Innovative, an IT strategy planning and support firm. “Therefore, those who are able to measure utilization and the impact of the IT systems and tools that support overall business goals are having the most success.”
Rappaport warns, however, that IT metrics shouldn’t exist in a vacuum, isolated from business metrics. “IT should be used to move the needle on specific business outcomes that are aligned with overall strategic goals,” he explains. “Utilization metrics aligned with systems and tools that are intended to support overall business goals provide the greatest insight into the success of IT within the organization.”
Nick Brigman, vice president of digital strategy and client enablement at IT consulting and management services provider CompuCom, says that it’s also important to listen to end users. “After each project, it’s important to solicit feedback from the business and/or the technology group you’re partnering with to gain further insights into the areas that perform well, the areas that are exceeding expectations and what could be improved moving forward.”
2. Time required to deliver defined business goals
Today’s economy is very dynamic and requires businesses to adjust and innovate frequently, observes Lahav Savir, executive vice president and chief architect at cloud services provider AllCloud. Frequent strategy adjustments are fundamental and strongly dependent on IT systems. “In order for IT to be true business enablers, the amount of time to deliver defined business goals metric can be key to the organization’s success or failure,” Savir says. “Even though IT is not customer-facing, it should be perfectly aligned with the business goals and should be an enabler.”
3. Cost and revenue indicators
As digital transformation progresses, Brigman advises paying close attention to cost and revenue indicators. “Measure reduction in administrative expenses, operational costs and customer acquisition costs,” he suggests. “Evaluate new revenue sources generated from new digital business models, as opposed to analog revenue streams, to assess how the digital transformation has impacted the bottom line.”
4. Overall enterprise growth rate
Given technology’s critical importance in today’s competitive landscape, an enterprise’s position in terms of growth, profitability and shareholder value is a strong indicator of IT success, reports Steven Poniatowski, technology strategy principal director for IT advisory firm Accenture Strategy. “More tactically and internally, when the above-mentioned integrated service metrics are properly managed, one can be confident that IT is managed effectively,” he says.
5. User experience
Many of the metrics currently used by IT are industry specific and tied to various business KPIs, observes Brian Berns, CEO of user experience software firm Knoa Software. “However, one of the most important metrics, which has gone woefully under-measured until recently, is user experience, and that cuts across all industries and lines of business,” he notes. “User experience, as IT professionals are starting to realize, is directly tied to employee engagement, user productivity and overall business process efficiency, which drives the successful utilization of IT assets toward business outcomes.”
Regularly examining user feedback is perhaps the best way an IT leader can determine IT’s overall impact on user experience.“There are other metrics we look at to check effectiveness and efficiency, but no other IT metric will matter if the users are having a bad experience,” says Paul Telesco, vice president of technical services at Logicforce, a law office IT consulting firm.
6. Website and social media activity
In today’s connected world, website and social media involvement provides important clues to both business and IT performance. A rise or drop in website visits, as well as a trend toward longer or shorter visits, indicates whether an enterprise’s web presence is succeeding or failing. Online sales and abandoned shopping cart statistics are other critical KPIs.
IT plays an essential role in ensuring consumer websites that are innovative, informative and reliable. “All teams, global and local, should be measured by one question: ‘did we make the customer happy?’,” says Sujai Hajela, president and CEO of Mist, a developer of artificial intelligence-enabled Wi-Fi management software. “IT organizations need an aligned vision of success, and customer delight is the ultimate indicator of performance.”
7. Mobile app downloads
App popularity, as measured by the number of downloads, upgrades and consumer feedback ratings, is a strong indicator of business and IT success. In today’s mobile-focused society, app success is essential. IT’s role is to ensure apps and updates that are reliable and customer engaging. “IT is a pipeline that takes in ideas and turns them into working software,” says Nolan Wright, co-founder and chief product officer of Pinpoint, a company specializing in software performance and cost measurement technologies. The faster IT can act on business ideas, the faster the enterprise can innovate and respond to competitive threats and jump to new markets. “In the modern market, victory is to the swift,” Wright observes.
8. Customer experience statistics
Customer scoring in areas such as the number of service requests, positive and negative online reviews and other forms of direct and indirect feedback provide a valuable indicator of how IT is helping the enterprise succeed in key business areas.
“If the business is thriving overall, it’s reasonable to expect that IT is doing its part to enable those outcomes,” Poniatowski says. “IT is an integral part of how a company provides the customer experience, operational capabilities and efficiencies that drive competitive agility.”
“IT and business need to align to projects that have the greatest impact on customer experience,” suggests Anthony Macciola, chief innovation officer at OCR and text scanning software provider ABBYY. “IT needs to understand and show how a project aligns to strategic plans/initiatives that are tied directly to customer experience,” he notes. Internal operational metrics should be studied to determine how fast the organization is able to respond to customer needs and create the best possible experience. “This could be how fast a customer gets approved for a loan, on-boarding new customers or reconciling customer complaint billing issues,” Macciola explains. “Enterprises need to obsess over the customer and every touch point in order to drive greater efficiency and a better experience for their customers.”
9. Overall customer satisfaction indicators
It’s easy to base IT success on typical metrics, such as service level agreements (SLAs), project budgets, uptime and other easily tracked methods, notes Frank DeGeorge, CTO of Impact Networking, an IT and business optimization company. “While these KPIs are important — as well as keeping track of Net Promoter Score and CSAT rating — the most important metric may also be the most difficult to measure: the satisfaction of your customers.”
Reference letters and online reviews praising enterprise products and services are other important indicators of IT success. “If your end users are not your biggest fans and in turn brand ambassadors, you’re not achieving your ultimate goal,” DeGeorge says. In today’s era of digital transformation, continuous development and security threats, IT teams are working harder than ever to deliver solutions customers want and need, delivering an experience that improves on the existing one. “The best metric is the praise that will come from your users and the employees who support those users,” he observes. “What motivates IT teams is building quality work and seeing that work in action with happy users.”
It’s important to follow a balanced set of KPIs, Poniatowski says. “Metrics tied to rewards are motivational and useful, but to affect a digital transformation it’s important to make sure all the elements of the new IT operating model (processes and tools, governance, organization, workforce and technology) have been aligned.”
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