IT can prove its business value to the board by changing
its metrics, making it easier to justify spend in the process, says
Mike Lucas.
Gartner has forecast that IT spending should increase by 5%
in 2004, and Computer Weekly's own spending survey found that IT
expenditure has been increasing in 2003.
If the projections for an increase in spending are to be realised,
organisations need to change the way they measure the performance
of IT to ensure their spending is aligned with business
value.
Typically the metrics used to gauge the success or failure of IT
are still technical in nature. They are focused on how well the IT
infrastructure is performing from a technical viewpoint, rather
than measuring the value IT is adding to the business.
For example, the IT department will often talk about how well it is
performing using terms such as uptime and utilisation, but this
tells us very little about how well IT is supporting the
business.
IT departments must change the way they measure performance if IT
is to be seen as adding value that supports the business, rather
than as a black hole of expenditure. It is not only about
justifying IT expenditure to others. It is about making sure that
the IT department is supporting the business in the best possible
way.
Instead of measuring server utilisation, why not look at what
applications are being used most often. If there is a an
application that is being used frequently by 90% of employees, it
makes sense for the IT department to focus on enhancing the
performance of that application and to be measured on how well that
application performs for end-users.
The performance of applications needs to be measured in a way that
can be understood by everyone. End-user response times, for
example, can be presented from an IT, business and end-user
perspective.
Telling the end-user that they can expect a five- or six-second
response time from a particular application allows them to better
understand the level of performance that can be expected from
IT.
Essentially, it allows the end-user to better judge how well IT is
delivering a service that enables their efficiency. It also gives
senior management the ability to see the impact investment will
make on the overall productivity of the business.
Until metrics change, businesses will remain gridlocked by IT.
Although most businesses know that IT adds value to their
organisation, they have no way of measuring how it does this. Using
easy-to-understand business-focused metrics should enable IT
managers to demystify IT and become more transparent to others
within the organisation.
These metrics will make it easier for senior management to measure
whether or not IT is adding value to the organisation and allow
them to assess whether extra investment in IT will result in
tangible business benefits.
What do you think?
Is there any means of measuring the effectiveness of your IT
department?
Tell us in an e-mail >>
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Mike Lucas is regional technology manager
of Compuware in the UK and Ireland