IT's added value

Amidst the bearish sentiments and imminent collapse of the Greek economy it's a good moment to reflect on the business case of the IT department. The good news: the IT department is definetly necessary. The obvious news: it has to demonstrate more added value to its company. The bad news: IT guys are not good at demonstrating value, because they're necessary. Performing at SLA levels is not added value, that's the agreed minimum. Yet soon enough some nice finance guys come knocking with cutback plans, and a requirement to show one's worth.

The IT department does have a strong process orientation in common with its financial department brothers, and a penchant for metrics and service level agreements. However, this will not be enough to prevent the finance guys from pulling a Cain on many IT department jobs when it's crunch time.
Factor in aggressive competition between IT service providers, outsourcing and offshoring alternatives, and cloud computing, and before you know it the entire department is Abel. Doom scenario? Of course.

So, plan V for value. The hidden power of an IT department is continuous service improvement. One clear way to demonstrate value is to provide clear metrics on the improvement of IT operations over time. If the department can show it delivers better warranty and utility to the business than last year, preferably saving dollars at the same time, it's a good show. I'll briefly discuss seven areas to measure and report on. For all of these area's, the real power is showing the trends over time.

People, IT operators
People are the core asset of the department, not computers, systems or processes. Measure their performance and show it front and center. Not only is it the most important data, but it's the easiest to relate to for the alpha-educated. People-related KPIs show not just how well employees perform, but displays the vital statistics on the department itself, its health and wellbeing. Overtime and sick days are writings on the wall to experienced executives.

Users
Our dear problems between keyboard and chair are of course second in line to be measured and reported on. User-related stats and KPIs show the value of the department to the business like nothing else. Basically, it shows how much work the department makes possible elsewhere. Show how many users to a single operator. Show how fast a new user is up and running with a new computer, phone, account, software etc. Show the department as an enabler.

Partners and suppliers
If you have mastered the exact art and subtle science of multi-vendor contracts, devote time to playing them off against each other. The opportunity is to create competition for quality, and the pitfall is to allow competition for price. Therefore measure and report on your partners and suppliers the same way you do on your own department, focus on the people and the quality of work delivered, focus on the value to the business. Make no bones about who gets more pie when it's time to re-negotiate those contracts.

Incidents
Incident metrics are real measures of quality for an IT department. For an operational report on the department level, this data would be perhaps second in line. When it comes to reporting added value, it's a bit lower in the list but therefore no less important. The business wants to know its uptime, its operational risks and the speed and efficacy of its solution mechanisms. Incidents per timeframe or average resolution time alone are not going to cut it. Showing a breakdown of self-service desk resolved incidents versus operator-resolved incidents and their respective severity, now that is showing why they pay the big bucks. A short story on the emergence and resolution of a major incident does not go amiss either.

Changes
Change management is absolutely vital, but the related data is almost unbearably boring. Standard changes / request fulfillment can be reported on by average time to fulfillment and closure. Non-standard changes are mainly interesting for how well they are executed. Therefore report the numbers of change-related incidents, and if it's a tight ship then the trend should slant to the lower right. A well done report harks back to the section on users: show the department as a business enabler by providing insight into the business changes enabled by IT Change management.

Configurations
Now, and only now, do we get around to the original raison d'être of this whole ITSM bit: the computers and other configurations. Lots of things to measure, lots of ways to demonstrate value. Show the reliability of the standard configurations, their total cost of ownership. Show how much discount was brokered in volume agreements with large manufacturers. Keep in mind that this stuff is really boring. Internally, maintain comprehensive data on the fleet, the stock and the various costs. Externally report the basics. Configuration-related metrics are important for driving operational excellence. Stock-keeping and supply chain management are arcane sciences of their own, which IT guys may underestimate. The larger your operation, the bigger the issue. Smart contracts can keep the onus largely on the supplier side.

Miscellaneous metrics
There are many more things to be reported on, according to preference. Some nice forms of report padding are storage size / cost versus utilization and my personal favorite: e-mail. Mail volume / related incidents / cost of mail solution per user / per e-mail are all eminently relatable for decision makers. Odds are the report was received by mail and is acted on with e-mails, so it's an appropriate and ironic salute to the IT-dependency of the company.

PR Metrics
Last and least are what I call PR-metrics such as customer satisfaction. I am gleefully swearing in church by saying this. If all the above measures are signs of a well-functioning IT department, then this happy user stuff should be completely superfluous. Conversely, of there is trouble in any of the above areas the customer satisfaction will be adversely affected.
Measuring customer satisfaction as your primary KPI is like measuring how close you are to port, while neglecting to measure your course, speed and prevailing weather. Sure, it tells you how well you are doing, but does not tell you a blessed thing about how to get better. Therefore measure and report all the rest first.


The bottom line
Never forget who holds the wallet and show your results to that guy. Everyone else is just filling a chair. It's not important how well you or anyone else thinks you do, it's important how well he thinks you do.
Secondly, don't think for a minute that this is too much paperwork. On good days, this paperwork enables operational excellence. In the bad days ahead, it's survival.
The bottom line of any executive decision is cost versus (expected) profit. Know your cost, show your profit.