Thought for the day: What's IT doing for your company?

Forget response times and the like. Cost saving is the true measure of IT performance, says Colin Beveridge


Forget response times and the like. Cost saving is the true measure of IT performance, says Colin Beveridge.




According to Mike Lucas of Compuware ( Thought for the Day, 18 November), IT must prove its business value to the board by changing performance metrics, making it easier to justify spend in the process.

He quite rightly proposed that our IT departments must change the ways we measure our performance, specifically by abandoning our obsession with uptime and utilisation statistics. So far, so good, I have no problems at all with Mike’s opening argument – this is exactly why I always refuse to include such outdated mundanities in my own monthly service reports.

Why should we seek recognition, simply because a server, or network, was actually there when somebody wanted it? Big deal. Nobody applauds the facilities manager if the carpet in reception makes it through another month without tripping anybody up, or if the office ceilings remain intact. Of course not, we just take it for granted that a responsible management will maintain the fabric of our workplace in good order for our general comfort and safety. Which is precisely how it should be too for our technical infrastructure. There whenever we need it - without any fuss.

So I agree completely with Mike Lucas that we need to blow away the smoke and mirrors of service availability and utilisation as key performance indicators and find new ways of justifying our technology investments.

He loses my vote, though, when he puts forward his alternative basis for proving the business value of IT.
He told us: “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…”

Whoa there, just a cotton-picking minute, Mr Lucas. This sounds like you want us to dump one set of meaningless metrics and substitute them with a slightly different, but absolutely pointless, type of technology-based indicator.

How can I break it to you gently?

Application response times are not now, never have been and never will be, a sound basis for claiming value from IT investment. You might just as well claim cost-saving benefits from the heating budget, due to the warmth generated by our computer monitors.
A second or two, here and there, is neither here nor there when we are talking about general business application systems. Especially when we are trying to “justify” technology spend.

The only true measure of the value of IT investment is the cost contribution to the various value chains within our business, or in other words the incremental cost of the technology elements involved in each business transaction.

Knowing exactly how much your technology costs on an activity basis, and therefore contributes to the cost of doing business, is the true Holy Grail of IT cost management and return on investment.

So we must forget about any notional productivity gains from increased systems responsiveness, unless these really translate into additional revenue or reduced head-count, and focus our attention squarely on understanding our value chains properly.

This is not rocket science but I know too well from my own experiences as a strategy and cost consultant that too many IT organisations are still marching to the beat of the wrong drum. Still trying to perfect their technology tango and blissfully oblivious to the dance rhythm of the orchestra - the business value veleta…

What do you think?

What is the true measure of IT performance?  Tell us in an e-mail >> reserves the right to edit and publish answers on the website. Please state if your answer is not for publication.

Colin Beveridge is an independent consultant and leading commentator on technology management issues. He can be contacted at [email protected]

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