Measuring business value in ITSM

Measuring business value in ITSM

How do people working in IT Service Management (ITSM) measure success and – more importantly – what should they measure?

Richard JoseyWhat tends to happen in ITSM is people measuring against internally-focused metrics: the number of incidents, service level agreements on incidents, the number of failed changes which have caused an incident, and so on.

However, the key to measuring real ITSM success is business value – and that means thinking about it from the perspective of your customer. For a car manufacturer, the number of cars rolling off the production line is a key business metric; measuring how ITSM supports such business metrics is where you need to focus your attention.

To develop a clear understanding of how and where business value is created in an organization needs communication between different departments so people appreciate what each part of a company does. This is about understanding the context of what someone in the business who needs IT support is trying to achieve. In turn, this helps ITSM to prioritize what they do based on what is really critical to the success of business operations.

Measuring business value

If you look at the work of the service desk, it partly fixes things that are broken. But what is the value of fixing something that shouldn’t be broken? What you’re doing isn’t providing business value but mitigating business loss.

Conversely, the other principal part of service desk activity – responding to requests – is an area where you can actively measure the business value ITSM delivers.

So, what value can you measure and how?  Here are some examples, that are not 100% scientific, but close enough to be practical to measure and provide an accurate enough picture to be useful.

  1. Productivity
    Assuming that every time you fix a laptop problem, it allows the person to get back to work and be productive. Measuring the value of this – a cost reduction that goes to the bottom line – can be based on assumptions of an employee’s cost per day and the time spent by IT to fix the issue.
  2. Employee satisfaction
    The satisfaction an employee takes from a positive experience with the service desk is a tangible measure. A poor service desk relationship damages the relationship between employer and employee. By increasing employee satisfaction, and creating happier staff, they tend to be more productive and deliver business value for the company.
  3. On-boarding processes
    How long does it take for IT/ITSM to provide what new employees need to be productive? You can measure how long it takes to get people up and running and whether this lead-time matches the level of agility the business requires. Some companies need the ability to handle changes in people numbers quickly; providing that effectively equates to business value.
  4. The impact on Continual Service Improvement (CSI)
    There’s no point measuring business value if you don’t have some form of CSI.

    So, measuring costs of fixing an incident plus the loss of productivity and knowing what you need to do to reduce those costs is where CSI comes into play. Also, if you’re deploying processes that don’t make sense you can shorten the amount of time it takes to fix things.

Where many organizations get it wrong is by taking the easier option of focusing on internal metrics. Unfortunately, that’s not necessarily measuring what customers actually care about.

An organization’s IT leadership needs to drive the understanding of why measuring real business value is vital and what to look for. The Business Relationship Management process role as outlined in ITIL® shouldn’t be ignored and is an essential way to understand what customers consider as business value and how to ensure it’s delivered.

Ultimately, this means communicating with those beyond the IT organization and selling the idea that engaging with IT will have impact.

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Comments

30 Apr 2019 David Colburn
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An article with this title should be a key message Axelos wants to send to ITSM practitioners and others looking for information on the value of ITSM, ITIL and the benefits of adopting service management best practice guidance. Unfortunately this article leaves readers with little insight into what ITSM practitioners should be focused on to speak to ITSM's value to the business.

Yes, IT should do the research to determine the relationships between technology assets supporting core business processes (CMDB) and quantifying how setting proactive (SLA-based) alerts on all assets in the service chain (Event Mgmt.) have resulted in proactively identifying and preventing potential Incidents. Yes, reporting this as a direct cost saving in prevented downtime. But this is not nearly as tangible to business customers are fundamental IT service improvements they actually can validate by experience.

An example: Business customers of IT services want to know:
1. Is IT showing a % improvement in the availability of my core business process application since last Mo. or Quarter or year. This is a basic KPI metric (MTBF) with a twist, showing a simple % improvement over the last measurement period
2. Is IT improving how they deliver against requests for standard services from IT, again a fairly simple KPI for Request Mgmt. showing % improvement in meeting the priority the customer assigned to their request.

% improvement KPIs are the key, when linked to basic things business customers request or expect (SLAs) from IT.

In Richard Josey's defense, a truly valuable article on measuring business value of ITSM is not a 2 paragraph blurb. It is a huge complex undertaking to map IT activities (Dev and Ops) directly to business process productivity improvements and the impact to the corp. bottom line. But, there are % improvement KPIs that can tell this story without doing the brain damage of calculating the core business process automation improvements IT delivered via better responsiveness because of Application changes or how faster servers improved productivity of business process workers.
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