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CIO Pathways Program Steven Snyder

BUSINESS IS HARD

“If Columbus had turned back, no one would have blamed him. Of Course no one would have remembered him either.”

-Source Unknown

OUR FIRST RESPONSE IS TO SOLVE A PROBLEM!

• Peers come to us to solve business problems with IT resources

• IT is typically an overhead expense in most organizations

• Our first response is to try to understand the business need associated with the issue

• Our second response is to develop a project plan to implement a solution to the problem

• Okay lets start coding

KPIS VS. METRICS

KPIs are quantifiable metrics which reflect the performance of an organization in achieving its goals and objectives.

KPIs reflect strategic value drivers rather than just measuring non-critical business activities and processes.

A KPI IS A METRIC BUT A METRIC IS NOT NECESSARILY A KPI!1. KPI echoes organizational goals

2. KPI is decided by management

3. KPI creates meaning on all organizational levels

4. KPI is based on legitimate data (supported by Metrics)

5. KPI is easy to understand

6. KPI/Metric has a timescale

7. KPI/Metric has a benchmark

8. KPI leads to action

"what is measured is managed," and, conversely, "what is not measured merits little or no attention.”

Consequently, it is critical that the KPIs measure those vital few activities and processes that monitor the health of the organization.

WE CAN ADD VALUE!

There is also a need to ensure that KPIs are not defined in functional or siloed terms but rather as cross-business enterprise standards.

The IT/IS team is in a unique position to help the business units measure their level of success. We run the systems that provide our peers and the management team with their KPIs & Metrics. If we take an active role in the analysis with a lens across the organization, we become strategic advisors rather than a group that just generates reports.

KPI EXAMPLES

• Price comparison to competition

• Customer complaints

• Defect rates

• Plant utilization

• Targets met

• Unit cost compared to competition

• Growth rate compared to industry growth rate

The first and most important challenge is to ensure that that the metrics reflect strategic drivers and are consistent with the vision and goal of the enterprise. In other words, KPIs must emanate from the vision level and cascade through the organization. In the strategic alignment pyramid

STOP. BACKUP. LEARN.

We know there is a need

Will the fix do any of the following? Improve workflow Improve productivity Improve the business bottom line Reduce man-hours associated with a task or process Improve the customer experience

METRICS AND KPI BUILD HEROES

If any of the previous are true then: Define a group of metrics before anything is implemented, including

changes in processes It’s okay if some of the metrics are squishy

“The program feels slow” “The client is complaining that navigation sucks” “The colors are horrible”

These will become anecdotal evidence of success post implementation

ITMAN

YOU CAN’T MANAGE WHAT YOU DON’T MEASURE.

If you don’t measure, you don’t know what is working well and where you need to improve.

If you don’t measure, you don’t know if your fixes are making things better or making them worse.

If you don’t measure, you can’t drive toward consistent performance and consistent delivery.

JUST WHAT I NEED. ANOTHER THING TO DO!

Yes, more time and resources are required

Yes, you have to talk to more folks

Yes, you have to do some deep thinking This will force a deeper understanding of the business need instead of

“the IT perspective”

Yes, you will build allies in the organization as you develop an understanding of the problems from a stakeholders perspective

What? More work?!?!

DO YOU WANT TO BE A HERO?

• No metrics—Cost center

• No support of Business KPIs—Cost center

• No measure of success—Cost center

• Before and after metrics validating project performance—Hero

• Proof of improved performance, measured or anecdotal—Hero

• Well thought out metrics/KPIs proving project success—Hero

ITMAN

CHALLENGES

• No top-level support to define or measure metrics

• Lack of buy-in

• Lack of resources to perform function

• Lack of continuous reinforcement—correlation of metrics to project outcomes

• No defined approach to measure return on investment

KEY SUCCESS FACTORS

Consistent reinforcement of the terminology and metrics definition

Develop the metrics early in the project

Gain agreement on key metrics

Gain agreement on reporting and monitoring

Dashboard and summary reports developed pre- and post-implementation

Metrics and measures are clear and concise

THE ROADMAP

Define Scope &

Governance

Metric Identification

Baseline Measurement

Industry Benchmarks

Define Targets

Establish Reporting Process

ImplementPost Project

Review/Audit

METRICS GUIDANCE

• Encourage feedback from participants

• Must be institutionalized and repeatable

• If possible reward participants

• Metrics not analyzed or acted upon are useless

• Plan for changes in the measurements collected

• Measurement results should remain anonymous Do not measure individuals Focus on the process and the product

PROCESS STEPS

Identify Metrics

Customers

Target Goals

Ask Questions

Select Metrics

StandardizeDefinitions

Establish Counting Criteria

Define ReportingSystems

AdditionalQualifiers

Collect Data

Consider Human Factors

METRICS DO & DON’T

Do Don’t

Obtain buy-in Ignore the data

Provide feedback Use only one metric

Select metrics based on goals Measure people instead of process

Focus on products, processes and services

Use metrics as a “carrot & stick”

IN CLOSING

Metrics and use of KPIs will quantify your team’s value within the organization by:

Providing tangible return on investment benchmarks

Prove IT/IS understands the businessProves IT/IS are trusted advisors in business process redefinition

Building alliances with your peers

Use the tools you have as an IT leader to prove that you can be a business champion. It is important for executive level management to understand that YOU understand the business that the company is in and that you can help leverage KPIs and Metrics to do business better, faster and more profitably.