METRICS CATALOG SERIES: VOLUME 4

METRICS CATALOG SERIES: VOLUME 4

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Implementing the BalancedScorecard for Technical Support

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Metrics Catalog Series: Volume 4

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Metrics catalog series:VoluMe 4

implementing the Balanced scorecard for technical support

robert s. last Content Manager, HDI®

March 12, 2007

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table of contents

IntroductionWhere Do I Begin? ......................................................................8

Chapter 1How to Choose Support Center Metrics ........................................11

Chapter 2How to Link Metrics to Strategy ..................................................33

Chapter 3Useful Tools and Strategies ..........................................................47

Implementing the Balanced Scorecard for Technical Support

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introduction—Where Do i Begin?

The most common questions that I receive about the Balanced Scorecard Service Model are, “Where do I begin?” and “What metrics do I need?” In this book, the fourth volume of the HDI® Metrics Catalog Series, we’ll step back a few paces and look at the construction of a Support Center Balanced Scorecard.

I’ve heard comments from many people that the balanced scorecard is too difficult to use and harder to understand than “regular” metrics programs. I couldn’t disagree more. In my view, the balanced scorecard (BSC) is actually easier to use and understand because it puts support center metrics into a context that shows the value of the support center to the parent organization or business.

The feedback I have received from HDI members using the BSC for the first time indicates two problems. First, a difficulty in choosing the optimum mix of metrics and Key Performance Indicators (KPIs). Second, an understanding of how these numbers link to the support center’s performance and service to the parent organization. The good news is that these difficulties are quite common and can be managed and overcome with the correct amounts of time, imagination, practice, and study.1

� In an ongoing Web survey conducted by www.scorecardsupport.com. 5� percent of respondents reported that the BSC was an entirely new concept for them. Remember how much you hated learning to parallel park? The dilemma is similar.


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Compounding the natural difficulty of learning anything new are the bewildering number of metrics and KPIs that can be used in a balanced scorecard—by some estimates there are over �00 to choose from. In addition to multiple choices in metrics, there are also multiple choices in audiences that need to be satisfied. Your colleagues in marketing, accounting, legal, your customers, the CIO, the CFO, and the CEO all expect and rely upon the numbers that your support center collects and provides to its various audiences. The even better news is that making the decisions about what metrics to choose, and what they mean, is not as bewildering as it may seem.

In this volume, the implementation of the BSC will be discussed with suggestions made in the following way:

• Chapter 1—How to Choose Support Center Metrics, will review the BSC concept, discuss the strategic nature of the BSC, and provide guidelines and KPIs as the building blocks of the BSC.

• Chapter 2—How to Link Metrics to Strategy, will discuss how to use daily metrics and KPIs as the building blocks of the BSC.

• Chapter 3—Useful Tools and Strategies will present three tools for the practioner to review that will assist them in implementing the balanced scorecard.

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chapter 1

how to choose support center Metrics

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preliminaries

Building and using a balanced scorecard (BSC) would be so much easier if all you had to do was choose a handful of metrics, put them into a BSC format, and analyze them once a month and then once a quarter. A decade’s worth of experience with the BSC, however, has proven time and again that there are numerous factors and characteristics

that are routinely seen in successful BSC projects no matter the industry in which they are being used. Companies and organizations that integrate these factors and characteristics into their planning and implementation of BSC projects are successful, those that do not, are not. Success is a matter of hard work, planning, creativity, adherence to basics, execution, and:

• Defining the scope of the project. Why is the balanced scorecard project being undertaken? What results are expected? Does it just involve the support center or is it part of an organization-wide BSC program?

• Support Center Balanced Scorecard relevancy. A BSC can be used as a standalone tool to deliver metrics information, but unless the support center’s metrics and Key Performance Indicators (KPIs) are tied directly to the parent company or organization’s strategic plan or direction, you are better off skipping the project altogether. A support center’s job is to make everyone else’s job easier, including that of the paying customer. Consequently, a Support Center Balanced Scorecard should not be a standalone tool.

Chapter 1


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• Determine your audiences. What groups of people and individuals will be using the BSC? What groups of people and individuals do you need to work with to make it work? What groups of people and individuals will possibly be threatened by the BSC? How will it benefit the organization and the groups involved? Answering these and other related questions is not an exercise in the Zen-of-the-balanced scorecard; it is a necessary part of establishing the parameters of the BSC project. If you don’t know who your audiences are, what you need to do to serve them, and understand how you need them to help you, the BSC can easily degenerate into a waste of time and money for all parties concerned.

• Timing is everything. There is never a really “good time” for initiating a new quality improvement program because most humans dislike change. If your organization is preparing for a SOX audit, has just been acquired by another company, or just laid off 40 percent of its workforce, beginning a balanced scorecard project is probably not a good idea. If you use large amounts of common sense, good judgment, and communicate honestly with your management and your employees before commencing your project, you increase your chances of success tenfold.

the Balanced scorecard service Model

In the prior section, I introduced the concept of the balanced scorecard. In this section, I’ll discuss how the BSC can be adapted into a comprehensive service model. “The goal of the Balanced Scorecard Service Model for the support center is to balance goals and supporting key metrics that may at times conflict with one another. For example, if you are �00 percent


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committed to customer satisfaction, your costs may get out of line or your employee morale may suffer.”1 How effectively does your support center use metrics? Are these metrics just beans that you count or do they form the basis for monitoring and improving the performance of your support operation? Are the metrics that you collect used in a way that advances the strategic direction of the parent organization? These are just some of the questions that the Balanced Scorecard Service Model is designed to answer.

Many managers equate capturing data with generating actionable information; they are not the same. At the risk of stating the obvious, but for the purposes of instruction, let’s be clear about the purpose of metrics in a support operation. Metrics should be used to monitor and improve departmental performance within the context of a flexible, well-defined management system that is aligned with the needs of the corporate parent. We all know this is the way it’s supposed to work, but all too often support managers capture and monitor lots of data, but don’t look for information in that data which can lead to improved support center performance; and, if they do find it, they frequently don’t understand it. If they do understand the information they review, they fail to put it into a context that makes it actionable over the long term. Granted, the long term view is not a characteristic that American business is known for, but given the fact that support operations are the face of many businesses, as well as a revenue center, it is time to begin to construct metric systems that lead to better service, lower operating costs, and improved employee morale.

� Implementing Service and Support Management Processes: A Practical Guide, Carrie Higday-Kalmanowitz and E. Sandra Simpson, (Norwich, UK: Van Haren Publishing, 2005), p. 2.


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origins of the Balanced scorecard

It may sound like an academic dream, but the concept of a balanced scorecard works and is fast being adopted by IT support operations around the world. The concept was created by Robert S. Kaplan and David P. Norton in a seminal article written for Harvard Business Review.2 Ron Muns, founder and CEO of HDI® and Mark Ellis, of Kronos®, expanded the concept of the balanced scorecard for the support center in their article, “The Support Center’s Balanced Scorecard Service Model.”3

In the article, they argue that a Support Center Balanced Scorecard should be based upon four sets of goals, each with a set of supporting Key Performance Indicators (KPIs). Figure �-The Support Center Balanced Scorecard is shown below:

Figure 1–The Balanced Scorecard Service Model

Customer Satisfaction GoalsSupporting KPIs

Employee Satisfaction GoalsSupporting KPIs

Costs/Productivity GoalsSupporting KPIs

Organizational Maturity GoalsSupporting KPIs

2 “The Balanced Scorecard—Measures That Drive Performance,” Harvard Business Review, January-February �992.

� “The Support Center’s Balanced Scorecard Service Model,” The Muns Report, December 8, 2004.


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The four goals of the BSC are defined as follows:

Customer Satisfaction—Is usually measured by customer satisfaction surveys. Ideally, these surveys should be administered twice a year by a vendor to minimize bias and even the suggestion of manipulation. Equally important, however, is the use of transaction or incident surveys to monitor daily support activities. There are numerous, inexpensive e-mail and Web-based software programs available today that allow support center staffers to effortlessly send out a short e-mail survey to the customers they have just finished speaking with. These surveys are returned to a support manager’s e-mail for evaluation and distribution. The worry that customers can be “over-surveyed” is a false one; customers that don’t respond to the survey will simply ignore it or delete it.

Employee Satisfaction—You can take the best service staff in the world and break their morale, burn them out, and abuse them to the point where they leave, just by placing them in a work environment that values everything but customer service and treats them like a commodity instead of as knowledge workers. One of the reasons that customer support is generally so bad in the United States is because in the quest for suppressing operating costs, managers and executives have abandoned their obligation to manage and maintain their employee’s general job satisfaction, motivation, and hopes for advancement. It doesn’t take a 25 percent increase in a department’s budget to raise morale, but it does take desire and a commitment to make the support center an interesting, professional, and rewarding place to work. Support professionals expect to be paid a fair market wage, to be treated with respect, have a chance for advancement, recognition, and training, and to work in an environment that is disciplined,


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organized, and well-managed by mature leaders. Organizations that fail to plan for and deliver these elements of employee satisfaction will not only create mediocrity in their support centers, they will ultimately fail in their goal to serve their customers and create an environment where high staff attrition is the norm.

As with customer satisfaction, employee satisfaction should be formally measured once or twice a year using confidential surveys. The surveys should be administered by a trusted member of the human resources department and integrated into a human capital management program, and the results shared with the organization’s employees. Additional techniques that emotionally secure manager’s use is to encourage formal “open door” policies, “Town Hall Meetings,” and individual and group lunches where any topic is open to discussion. Rank and file staff people are usually suspicious of such invitations, but when the manager does it with sincerity, it can be an illuminating experience for decision makers and develop a sense of empowerment for staff people.

Cost/Productivity—The IT and support worlds still treat the necessity of gathering metrics as a generic exercise that supports the belief that if enough metrics are gathered, all problems can be solved. Put another way, just gathering cost and productivity data does not provide cost and productivity information. As an industry, we’ve become very, very good at generating so much data, that we’ve created data smog that obscures what is really happening in our support centers.


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The kind of information that support managers and their executives need should answer these kinds of questions:

• Is our operation cost-effective and customer-centric? • Are we spending too little on support infrastructure and too

much on labor? • If the reverse is true, have the expected returns on investment

been realized? • Has a methodology been developed to measure return on

investment? • How much would be saved by developing multi-channel

contact avenues, i.e., telephone, e-mail, self-service, and chat? • Does the support center closely measure its operational costs

by cost per contact channel? • On a daily, weekly, monthly, and quarterly basis is the

support center meeting its goals?

Organizational Maturity—Assessing organizational maturity is a great deal like judging art; you know maturity when you see it in an organization. Financial success does not necessarily equate to maturity. Just ask the folks that used to manage and work at Enron, Arthur Anderson, and Tyco, to name a few.

On the positive side, the IT and support industries have taken huge strides in describing what constitutes a mature organization. To name two, HDI and ITIL® have developed a set of certification standards and best practices that have become the de facto measurement for mature, sophisticated, and successful organizations.


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Forward thinking organizations that expect to grow, that want to make their support operations a revenue center, and that want to align their IT resources with their business strategy, will take aggressive and progressive steps to move beyond the current status quo that has been the standard operating procedure for the last ten years. The “go-go” �990s are long over and the next evolution of IT and customer service and support management has begun.

By linking the financial and operational management of a support center to an integrated Balanced Scorecard Service Model built on the elements listed in the previous pages, it is possible to identify Key Performance Indicators (KPIs) that will allow the support manager to assess current operations, and past performance and trends. The BSC Service Model provides answers to four basic and critical questions:

• How do customers see us? (Customer perspective)

• What must we excel at? (Internal perspective)

• Can we continue to improve and create value? (Innovation and learning perspective)

• How do we look to shareholders (or the “bean counters” and CFO)? (Financial perspective)�

4 Adapted from The Balanced Scorecard—Measures that Drive Performance, Robert S. Kaplan and David P. Norton, Harvard Business Review, January-February �992, p. 72.


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There are two goals that the balanced scorecard is designed to meet:

�. To forecast future costs, gauge operational performance and service levels that are based on workload for both internal and external customers;

2. To transform strategic planning from a paper-generation exercise into an efficient and cost-effective management tool that actually gets used.

how to choose Metrics and Key performance indicators or Measurements

Step 1—Determine audiences. Constructing a BSC and reporting on metrics and Key Performance Indicators (KPIs) begins with determining what audiences will be the recipients of the data contained in the BSC. BSC audience members include, but are not limited to, the C-level executives that set an organization’s strategy. The number of people that request BSC data and use it can easily grow to unwieldy proportions and it is advisable to identify who these audience members are by using the reports table that is provided in Figure 2-Reports Table.


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Figure 2–Reports Table

Step 2—Identify measurements that can be used. There are times when every support manager thinks to themselves that there must be as many metrics as there are grains of sand on a beach. Even more frustrating are the support managers that are required to measure every metric known to humankind because someone in the organization thinks the act of measurement is the same as managing work and leading people. One way to deal with this problem is to understand the criteria that BSC measurements must meet to be useful, what measurements are available to be used, and how they work.

Report Audience

Calls Offered

Calls Taken ASA Abandons Talk

TimeAbandon

Rate

Joyce Smith, CEO

X X X

Susan Longstreet, CFO

X X X X

Rich Thomas, CIO

X X X

Juan Alvarez, Service Desk Mgr.

X X X X X X

Tina Canley, Network Admin.

X X

Steve Andrews, Sales

XX

X

Siraj Patel, Telecomm

X X X X X X


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Balanced scorecard measurements should have the following characteristics:�

• Linked to strategy. They should be linked to the business or organization’s strategy. There is a difference between diagnostic measurements that tell you about day-to-day operations and those that inform you of strategic performance. For the BSC, you want to rely upon strategic measurements.

• Quantitative. They should be quantitative in nature, not value judgments of performance. If you are judging any measurement using terms such as “excellent,” “good,” “average,” and “poor,” you are making a value judgment about performance and value judgments are not quantitative evidence.

• Accessibility. Measurements come in two forms, “must-have” and “nice to have.” The must-have measurements are the ones that relate directly to the strategy of the business or organization and are easy to measure or are accessible; the nice to have measurements are the ones that involve a great deal of time, money, and IT technology to capture. These characteristics make them inaccessible. Yes, everything can be measured, but at a certain point, the costs become prohibitive and when this point is reached, it is advisable to move on.

5 Niven, Paul R., Balanced Scorecard-Step-by-step, (New York: John Wiley & Sons, Inc., 2002) p. �47-�49.


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• Easily understood. With one look at the BSC, the reader should be able to understand the value, meaning, and direction of each measurement. If you have to explain every KPI in every quadrant of the BSC, it is safe to say that you need to look at your BSC and ask yourself if you have made the BSC more complicated then it needs to be.

• Counterbalanced. As you build your BSC, it is easy to become so focused on the project and the measurements that you forget why you are doing it and what it is that you are trying to achieve. The BSC is meant to assist you, not lead you in the wrong direction; don’t measure and act upon data that actually hurts your organization. It is okay to balance your measurements and goals with the reality of your organization; it is okay to do things that do not harm your organization.

• Relevant. The BSC should reflect the reality that you are working in. As Paul Niven observes, “The measures appearing on your scorecard should accurately depict the process or objective you are attempting to evaluate. A good test is whether or not measureable results are actionable. If some aspect of performance failed, you should be able to recognize the significance of the problem and fix it.”�

� Ibid, p. �48.


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• Common Definition. Poorly defined measures or measures with no definition at all are an invitation for endless debate and delay in implementation of the BSC. Although it may be a time-consuming process to achieve agreement on the definitions of metrics and KPIs, do so sooner than later or such neglect will come back to haunt you. As Niven rightly points out, “The process of agreeing on measure definitions is yet another example of how the scorecard building process brings seemingly disparate functions together as they work to ensure that the measures capture a meaning that allows all to contribute meaningfully to success.”�

The first step in this process is to create a data dictionary. The balanced scorecard is a strategic management system, not a fancy format for presenting ACD and call tracking data. The BSC uses “…measurements within the context of this strategic management system, and a company [or organization] can evaluate itself and its strategy from different perspectives….”� The metrics and KPIs that IT and IT support generate not only have to be counted, but they have to make sense to non-technical, business-oriented executives that have the job of ensuring that IT and support measurements map to business and organizational strategy.

7 Ibid, p. �49.8 “Bridging the IT Credibility Gap,” Bill Hickman, Matrix® Essentials, Volume VII,

Number 2, p. 2.


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Step 3—Validate the measurements in data dictionary format. Almost everyone skips this step and as the BSC project proceeds, it shows in the difficulty that some people have in describing and defending the metrics and KPIs that have been chosen. The best way of avoiding this problem is to create a data dictionary that defines each measurement that will be used in the BSC. It is a tedious and sometimes frustrating process, but as with all foundations, once it has been built, the rest of the structure will rest upon the foundation. The data dictionary can take two forms; both are presented on the following pages.

The more sophisticated and detail-rich format for a data dictionary entry is as follows:

Figure 3–Directions for Creating Performance Measure Data Dictionary Entries �

Data Dictionary Component Definition and Details of the Component

Balanced Scorecard Goal: Customer Satisfaction

Support Center Balanced Scorecard quadrant; there are four quadrants.

Measure Name/Measure Number: Customer Loyalty Rating

All performance measures should be assigned a name and a code number; the code number is important should you choose to later automate the reporting system.

Owner: Robert Scott, Support Manager The owner is accountable for the results of this measure.

Strategy: Revenue Growth Displays the specific strategy you believe the measure will positively affect.

Objective: Increase Customer Loyalty Every measure should be created as a translation of a specific objective. Use this space to identify the relevant objective.

9 Niven, Paul R., Balanced Scorecard-Step-by-step, (New York: John Wiley & Sons, Inc., 2002) p. �52-�54.


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Description of Objective: The customer loyalty rating measures the percentage of surveyed customers stating they prefer our products to competitor offerings, and will purchase our products again. Our research indicates that loyal customers make more frequent purchases and tend to recommend our brands to others. Therefore, we believe increasing customer loyalty will help us achieve our strategy of revenue growth

The description should be concise and accurately capture the essence of the measure so that anyone reading it will be able to quickly grasp why the measure is critical to the organization. In the example provided here, we quickly learn that customer loyalty is based on a percentage, what that percentage is derived from (survey questions), and why we believe the measure will help us achieve our strategy of revenue growth (loyal customers buy more and recommend our products).

Lag or Lead Indicator: Lag Lag Indicator: Measures focusing on results at the end of a time period (“How did we perform?”), normally characterizing historical performance; do not reflect current activities; lack predictive power.

Lead Indicator: Measures that “drive” or lead to the performance of lag measures, normally measuring intermediate processes and activities. Lead indicators are predictive in nature (“How are we likely to perform?”), and allows the organization to make adjustments based on results.

Outline whether the measure is an outcome indicator or a performance driver. When you begin analyzing your results over time, you will want to test the relationships you believe exist between your lag and lead measures.

Frequency of Reporting: Quarterly How often do you plan to report performance on this measure?

Unit Type: Percentage This characteristic identifies how the measure will be expressed. Commonly used unit types include numbers, dollars, and percentages.


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Polarity: High Values are GoodDual Polarity: No Polarity: High Values are Good-continued

Dual Polarity: No

Polarity refers to whether a value is high, medium, or low on a numerical scale or a values-based scale. Some performance measures will be considered successful if they are high, others will be considered successful if they are low. Average Speed of Answer (ASA), for example, usually has a high polarity; Average Abandon Rates usually have a low polarity.

In some cases it may be necessary to develop a system of “Dual Polarity.” For example, up to forty calls per technical support staff person may be acceptable, but forty-plus calls per TSR may be a cause for concern and indicate the necessity for action as the TSR becomes overworked.

Calculation Required: Number of quarterly survey respondents answering yes to survey question five: “Do you prefer our products to competitor offerings?” and number six “Will you purchase our products again?” divided by the total number of surveys received.

You should provide the specific elements of the calculation required for the performance measure. If the metric owner goes on vacation, the formula and the data that feed it should be processed in your absence.

Documentation is critical for continuity of process.

Data Source: Data for this measure is provided by our survey company, “SST.” Each quarter they perform a random survey of our customers and provide the results electronically to our marketing department. Data is contained in the form of MS Excel spreadsheets. Data is available the tenth business day following the end of each quarter.

Every measure must be derived from somewhere—an existing management report, third party vendor-supplied information, customer databases, the general ledger, and so on. Provide complete information on the source of the data and how and when it will need to be collected.

Data Quality: High—received automatically from a third party vendor.

Use this area of the template to comment on the condition of the data you expect to use when reporting BSC results. If the data is produced automatically from a source system and can be easily accessed, its quality can be considered “High.” If, however, you rely on an analyst’s Word document that is in turn based on some other colleague’s Access database numbers that emanate from an old legacy system, then you may consider the quality “Low.”


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Data Collector: J. Smith, Marketing Analyst Individual responsible for the actual collection of the data itself; this individual may be different than the owner.

Baseline Performance Date: January 2007 Users of the BSC will be very interested in the current level of performance for all measures. For those owning the challenge of developing targets, the date when the measure begins to be monitored is critical for trending and analysis.

Baseline Performance: Our recent data from SST indicates a customer loyalty percentage of 59 percent

Users of the BSC will be very interested in the current level of performance for all measures. For those owning the challenge of developing targets, the baseline is critical in their work.

Target: Q1: 65% Q2: 68% Q3: 72% Q4: 75%

Goals and objectives must have timelines just as financial goals and objectives do. Quarterly reporting is an excellent starting point.

Target Rationale: Achieving customer loyalty is critical to our revenue growth strategy. The quarterly increases we’re targeting are higher in past years, but reflect our increased focus on loyalty.

Provide an explanation for why this target was chosen and how it relates to a specific quadrant of the BSC. Every aspect of a performance measure data dictionary entry should lead to accomplishing a service goal.

Initiatives to Achieve Target: 1. Seasonal promotions2. CRM project3. Customer service training

Briefly describe the tactics, mechanics, and processes that will be used to meet a target.

This format “…provides the background you need to quickly defend your measure choices and answer any questions your audience has. Additionally, chronicling your measures in the data dictionary provides your team with one last opportunity to ensure a common understanding of measure details.”10 An alternative format is provided in Figure 4-Performance Measurement Record Sheet.

�0 Niven, Paul R., Balanced Scorecard-Step-by-step, (New York: John Wiley & Sons, Inc., 2002) p. �52.


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Figure 4—Performance Measurement Record Sheet 11

Measure Title You should give every measure a title which captures its essence.

Purpose Why are you measuring this? If you can’t produce a good reason, then maybe you shouldn’t measure this at all. This should guide you when you review the measures answering the two questions: “What behavior will this encourage?” and “Is this desirable?”

Relates to To what top-level business objective does this measure relate? You should design measures to support the achievement of the top-level objectives—often managers are inclined to insert measures which will show them (or their department’s performance) in a good light! By linking the measure to the top-level business objectives, this question prevents you from making the same mistake.

Target What performance target should be set? Your targets should also include a time frame for reaching them. Everything you have learnt before about targets being “high but achievable” needs to be applied here.

Formula How is the performance measure calculated? Be precise—too often people are inclined not to include a formula and as a result the IT department makes the decision. Your formula must include precisely what you are measuring.

Frequency You should decide how often this is to be measured and how often the measure is to be reviewed.

Who measures? You must identify who is responsible for measuring this performance.

Source of data You should specify the source of the data so that the measure is taken consistently. In this way, you can compare performance between periods.

Who acts on the data?

You must allocate responsibility for taking action on this measure.

What do they do? You should be able to specify in outline the types of action your people should take to improve the performance of this measure. If you can’t describe this, then you are asking too much of your people.

Notes and comments

You will find it useful to record any additional notes and comments here.

�� Bourne, Mike and Pippa Bourne, Balanced Scorecard in a Week, (London, United Kingdom: Hodder Arnold, 2002) p. 44-4�.


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An example of a completed performance measurement record sheet is provided below in Figure 5—Example of a Performance Measurement Record Sheet.

Figure 5—Performance Measurement Record Sheet

Measure Customer Complaints

Purpose To understand which aspects of our performance upsets our customers so that we can continually improve our service.

Relates to The need for the business to satisfy its existing customers and to retain their customers in the future.

Target Maintain a customer complaint ratio of less than 1 percent during 2007.

Formula Number of Customer Complaints Number of customer orders dispatched in the period X 100

Frequency To be measured and reviewed monthly

Who measures? Sue Williams, Quality Manager

Source of data? The customer complaint system

Who acts on the data?

Michelle Miele, Service Desk Manager

What do they do? Analyze complaints by key process, ensures process owners conduct root cause analysis, and complete corrective actions. Flag any major trends.

Notes and comments

We need to ensure that all customer complaints are captured by the complaint system and that staff are regularly reminded about the customer complaints procedure.

What format is chosen for the BSC is less important than the act of going through the process of creating a data dictionary or performance measurement record sheet. These tools are designed to force you to make conscious decisions about what measurements are chosen for the scorecard. If you get this task correct, the rest of the pieces of the puzzle will begin to fall


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into place and you will be able to judge, both intellectually and intuitively, if you are on the right track.

In Chapter 2, we will discuss how to link these metrics to the strategy of the business or organization.

conclusion—the least You Need to Know

• Before beginning the balanced scorecard project, follow the sage advice of Stephen Covey and “Begin with the end in mind.” Don’t start the project unless you understand how the BSC system works and what you need to do to implement it.

• Understand who your audiences will be and if the timing is right to undertake the project.

• Remember that metrics should be used to monitor and improve departmental performance within the context of a flexible, well-defined management system that is aligned with the needs of the corporate parent.

• The balanced scorecard is part of the Balanced Scorecard Service Model and is concerned with four set of goals—customer satisfaction, employee satisfaction, cost/productivity, and organizational maturity.

• Step � in a BSC project is to determine who your audience is and what is important to them. Although IT and the service desk will own and use the BSC, the data that will be produced will be viewed, reviewed, and analyzed by numerous people that will ask questions. The more you know about your audience, the better positioned you will be to answer questions and defend your data.


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• Step 2 in a BSC project is to identify the measurements that you will be using in the BSC. These measurements (remember that the term “measurements” is a generic term that covers the categories of “metrics” and “Key Performance Indicators” ) must have the following characteristics:

•They must be linked to the strategy of the organization •They must be quantitative in nature—no value judgments •They must be accessible and inexpensive to capture •They must be easily understood •They must be counterbalanced, i.e., no one measurement

should dominate the others •They must be relevant—can the measurement

be actionable? •They must have a common definition—easily understood

with a definition that is understood by all parties

• Step � in a BSC project is to put all measurements in the format of a data dictionary. Word dictionaries are used for a reason and the data dictionary that you create has the same purpose. The need for a data dictionary is especially important in the IT and service desk worlds where there is often little agreement on what some terms mean. For example, the term “First Call Resolution Rate” is misused almost universally because it is often applied to e-mail, chat, and Web self-service communication channels. These channels do need to be measured, but they have to be measured as “contacts,” not as “calls;” there is a difference and the difference is important.


chapter 2

how to link Measurements to strategy

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Mark Graham Brown observes that, “The key to having a good measurement system is to have a good strategy. Measures need to be derived from your strategy and from an analysis of the key business factors you need to concentrate on to ensure that you achieve your vision. Every successful company has a well thought-out strategy. A strategy is how you are going to provide some product or service in such a way that

customers will prefer dealing with your company rather than with your competitors.”� This involves some deep, complex thinking on the part of the CXOs that manage a business or an organization. If your CXOs have not engaged in this thinking, you will discover that there are gaps in your organization’s strategy and no matter how skillful you are in capturing and interpreting measurements, your BSC will be difficult to construct and use. The best you can do is to build the best BSC possible and if you determine that your business or organization is lacking a clear and consistent strategy, point out what you have discovered. After all, one of the benefits of having a service desk is to alert management to what is going on with the organization and its customers.

� Brown, Mark Graham, Keeping Score-Using the Right Metrics to Drive World-class Performance, (New York: Productivity Press, �99�) p. ��2.

Chapter 2


3�


To Team or Not To Team, That Is the Question

Should the BSC project be undertaken by a team or by one person? It depends. If you have the time and the skills to manage a project team, proceed accordingly. If you are short on time or don’t have the patience or skills to manage a project team, you can do it yourself or create a small planning cell of people that has no expectation of providing input.

step 1—Define and understand the terms2

The amount of confusion over basic organizational terms often causes much wasted work and time. In an attempt to avoid this problem, for the purposes of this metrics guide, the following terms have these definitions:

Strategy—The methods, processes, and procedures that dictate how an organization is going to provide some product or service in such a way that customers will prefer dealing with your company (or organization) rather than with your competitors. Strategy comes out of your vision; it should articulate, in general terms, how you will achieve your vision.

Vision—The vision should say what you want to be in five or ten years.

2 Adapted from, Ibid, p. ��0-��4.


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Key Success Factors—The things that you need to do or the capabilities you need to have to achieve your vision. Determining key success factors involves asking the question, “What are we going to need to do to achieve this vision and these long-term goals we have set for ourselves?”

step 2—gather Data and identify the importance of:

• Projections about future customers and markets • Strategies, strengths, and weaknesses of key competitors • Projections about changes in requirements and priorities

of existing customers • Evaluation of how new technologies may impact your

business or organization • Research, testing, and projections of new products/services • Regulatory trends that may impact the organization • Economic and societal trends that may impact the business

or organization • An honest analysis of your company or organization’s

strengths and weaknesses

Yes, this is a great deal of work, but planning the future of a company or organization is not an easy job, and building a balanced scorecard that is useful does not allow for the use of shortcuts.

step 3—executive review and analysis of Data to Determine critical success Factors

From the data that is generated from the exercise in Step 2, the leadership of your organization or business must develop a list of eight to twelve key factors that will impact the organization’s


3�


future. It is common for an initial list to contain thirty or more factors that deal with every aspect of the organization’s operation. When this initial list is completed, your organization’s leadership has to make the time to review and analyze the results of Step 2 and choose the eight to twelve key factors that will go into the BSC.

Verify Strategic Guidance

CAUTION!!!

IF YOUR ORGANIZATION’S LEADERSHIP DOES NOT COMPLETE STEPS 2 AND �, STOP NOW. DO NOT ATTEMPT TO IMPLEMENT

THE BALANCED SCORECARD WITHOUT THE NECESSARY STRATEGIC GUIDEANCE FROM YOUR

ORGANIZATION’S LEADERSHIP.

IF YOU ATTEMPT TO IMPLEMENT THE BSC WITHOUT THE PROPER GUIDEANCE, THE

PROJECT WILL FAIL AND THE END-PRODUCT WILL BE AN OVERLY COMPLEX MEASUREMENT

REPORT THAT OFFERS NO STRATEGIC BENEFITS.

step 4—Validate for strategic alignment

When you have been presented with the necessary strategic guidance, validate it by completing the worksheet presented in Figure �-Linking Measurements to Strategy.


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Figure 6—Linking Measurements to Strategy

What Is My Vision for the Future?3

Definition of Business Unit: JHJ, Inc. Support Center

Mission Statement: To exceed our customer’s expectations with every contact.

Vision Statement: To distinguish ourselves by offering the highest quality products and technical support at a reasonable cost.

� Adapted from “Putting the Balanced Scorecard to Work,” Robert S. Kaplan and David P. Norton, Harvard Business Review Onpoint #4118, September-October 1993, p. 8. Adapted from IT Balanced Scorecards-End-to-End Performance Measurement for the Corporate IT Function. The Working Council for Chief Information Officers, Corporate Executive Board, 200�, p. �0. URL: http://www.cio.executiveboard.com.


3�


If Our Vision Succeeds, How Will We Be Different?

To Our Organization To Our Customers To Our Employees To Our Organization’s Capabilities

Costs/Productivity Customer Perspective

Employee Perspective

Organizational Maturity Perspective

Connect service cost with strategy implementation and develop a set of granular financial metrics that allows the CIO to understand IT spending in the context of service levels, strategy implementation, and project progress.

Provide a customer-focused approach to delivering IT services by regularly assessing end-user satisfaction, so that the CIO can more accurately articulate cost and service quality trade-offs for consideration by business decision makers.

Routinely assess IT job satisfaction, retention, and the attractiveness of the IT workplace.

Achievement of HDI®SCC certification and adopt best-in-class processes that seek to provide an aggregate, customer-focused view of IT’s operations.


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What Are The Key Success Factors?

Costs/Productivity Customer Sat. Employee Sat. Organizational Maturity

* Weekly review of cost per call

* Weekly identification of most costly calls

* Cost of data communications per seat

* Relative spending per portfolio category

* Percentage of IT R&D investment leading to IT service improvements

* Results of event surveys after each customer contact

* Results of focused executive feedback on IT operations and service

* Monthly assessment of the quality of IT operations

* Monthly percentage of retained high-potential staff

* Monthly external citations of IT achievement

* Quarterly employee satisfaction surveys

* Percentage of peak time availability per week

* Weekly critical process uptime

* Percentage of staff receiving security training each month

* Percentage of staff involved in security violations per week

* Percentage of users involved in security violations

* Percentage of business process steps enabled by technology in process reengineering

step 5—transfer Key success Factors into the scorecard

In this step, you identify the metrics that relate to the key success factors that have been identified above. Note that the number of actual metrics is four (cost/productivity, customer satisfaction, employee satisfaction, and organizational maturity) and that each metric has between three and six Key Performance Indicators. The BSC is not meant to be a daily tracking device that captures and reports on the dozens of KPIs that are used in the management of a support center or service desk. Rather, as was mentioned earlier, the BSC is a tool that facilitates the strategic management of a support operation.


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Metrics Scorecard

Metrics and Key Performance Indicators Actual Target Status

Cost/Productivity:

* Weekly Review of Cost per Call $7.50 $5.00 Yellow

* Weekly Identification of Most Costly Calls

User Questions: $7.00

User Questions: $5.00 Yellow

* Cost of Data Communications per Seat $11.00 $11.00 Green

* Average Cost of IT Portfolio $21.00 $19.00 Yellow

* Percentage of IT R&D Investment to IT Service Improvement

33% 62% Red

Customer Satisfaction:

* Event Survey Score (1-5) 4.7 4.5 Green

* Executive Feedback Score (1-5) 4.0 5.0 Yellow

* Assessment of IT Ops. (1-5) 4.5 4.5 Green

Employee Satisfaction:

* Monthly Percentage of Staff Receiving Training 77% 90% Yellow

*External IT Citations 8 10 Green

*Employee Sat. Score (1-5) 3.8 4.5 Yellow

Organizational Maturity:

* Percentage of Peak Time Availability 98% 100% Green

* Percentage of Weekly Critical Process Uptime 97.5% 100% Green

* Percentage of Staff-Security Training 100% 100% Green

* Percentage of Staff-Involved in Security Violations 25% 10% Red

* Percentage of Enabled Processes 90% 75% Red


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two lists to learn by heart

The Eleven Deadly Sins of the Balanced Scorecard�

Description of Sin Type of Sin

1. Taking too much time to gather relevant data. You can spend weeks gathering data, you only need to spend a few days.

Technology and Process Challenge

2. Not making the BSC a critical part of a management process. Without the intent to use the BSC as a strategic management tool, the BSC becomes an overly complex measurement tool that will most likely be ignored.

Process Challenge

3. Stopping the education of users and managers. Successful BSC projects do not stop with the creation of the scorecard itself. The BSC becomes a catalyst for constantly learning more about the workings of the organization. The BSC offers an opportunity for continuous process improvement.

People Challenge

4. Looking for the “Aha” instead of the “I knew it!” The BSC is a surveillance tool that is meant to be used and acted upon. Any indicators below the expected level of performance (yellow or red if you are using color codes) should trigger a response from management.

Process Challenge

5. Managing understanding and support for the BSC. The BSC requires operational managers to routinely brief and explain the BSC’s results to executive managers. This means routinely getting and keeping their attention.

People Challenge

6. Not fighting the freeloaders who resist change. The BSC puts departments and people under intense scrutiny and some people will resist this kind of attention as if their jobs depend on it—because it does.

People Challenge

7. Searching for push-button solutions. IT people tend to look for technological solutions to people problems. There are no purely technological solutions.

People and Technological Challenge

8. Expecting the design of the BSC to freeze. As the IT and support operations evolve, so must the BSC change to reflect the evolution.

Technology and Process Challenge

4 Adapted from , Nair, Mohan, Essentials of Balanced Scorecard, (Hoboken, New Jersey: John Wiley & Sons, Inc.) p. 207-2�5.


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Description of Sin Type of Sin

9. Assuming no hidden costs. The BSC need not be a budget-buster, but there will be hidden costs that arise when you least expect them to. To think otherwise is not only foolish, it is delusional; plan for hidden costs at the beginning of the project.

Resource Challenge

10. Managing from the executive suite. Although the BSC is a strategic management tool and therefore a source of legitimate executive attention, the BSC should not be the catalyst for executives to micromanage the IT or support operation.

People Management Challenge

11. Forgetting the values, vision, and mission of the business or organization. This type of forgetfulness spreads slowly until the management of an organization suddenly realizes that it has lost its way and its customers are both furious and frustrated. Paying attention to the warning signs in the BSC helps prevent this problem.

Process Challenge

six structural attributes of successful it Balanced scorecard projects�

1. Simplicity of Presentation. The very best scorecards are limited to a single page of ten to twenty metrics written in nontechnical language. Although the IT BSC will track the operation of an IT department, it will be viewed and reviewed by non-technical business and organizational executives.

2. Explicit Links to IT Strategy. The scorecard should be tightly coupled to the IT strategic planning process and assist in tracking progress towards IT’s goals and objectives.

3. Broad Executive Commitment. Both senior IT as well as senior business managers should be involved in the scorecard process—both in the creation of and ongoing maintenance. The BSC is a strategic tool that should be used to align IT with the business or organization.

5 Adapted from Keyes, Jessica, Implementing the IT Balanced Scorecard, (New York: Auerbach Publications, 2005), p. 92.


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�. Enterprise-standard Metrics Definitions. Consensus should be quickly achieved on metrics definitions. The review meetings should focus on decisions rather than debate over metrics.

�. Drill-down Capability and Available Context. The high-level IT scorecard should allow for a detailed review of trends or variance by providing more granularity on component elements.

�. Individual Manager Compensation should be linked to scorecard performance.

conclusion—the least You Need to Know

• The balanced scorecard requires that the following terms be defined:

•Strategy—The methods, processes, and procedures that dictate how an organization is going to provide some product or service in such a way that customers will prefer dealing with your company (or organization) rather than with your competitors. Strategy comes out of your vision; it should articulate, in general terms, how you will achieve your vision.

•Vision—The vision should say what you want to be in five or ten years.

•Key Success Factors—The things that you need to do or the capabilities you need to have to achieve your vision.


4�


• Executive leadership is responsible for developing eight to twelve key factors that will impact the organization’s future.

• The BSC is a strategic management tool, not an overly complex metrics report.

• A business or organization’s vision and mission will drive the development of BSC key success factors.

• The key success factors are tied to the BSC metrics (cost/productivity, customer satisfaction, employee satisfaction, and organizational maturity).

• Under each metric there will be three to six Key Performance Indicators (KPIs).

• There are “Eleven Deadly Sins…” that every BSC project manager should be aware of and prepare to deal with. They fall into the categories of technology, process, people, people management, and resource challenges.

• There are six structural attributes that should be included in a BSC project.

chapter 3

useful tools and strategies

4�


4�


Section 1: Understanding IT-Business Alignment

Section 2: The Support Center’s Balanced Scorecard Service Model Ron Muns and Mark Ellis

Section 3: Assess Your Metrics Program, Bob Frost, PhD.

SecTion 1 it-Business alignment

introduction

Despite twenty years of conversations among consultants, practioners, and academics, and a blizzard of articles, columns, and blogs, a broad definition of what constitutes IT-business alignment and how to achieve it, continues to be a topic of discussion and a source of frustration. Seldom has one concept proven so resistant to the search for a commonly accepted definition and a set of principles that turns the definition into action. This section will offer a definition of IT-business alignment, discuss the obstacles that keep both parties from working together successfully, and suggest several strategies for achieving IT-business alignment.

Defining it-Business alignment

For the purposes of this book, a simple definition of IT-business alignment will be used; it is, applying IT in an appropriate and timely way, in harmony with business strategies, goals, and needs.

Chapter 3


4�


From the business perspective, this definition includes having the following capabilities:

• The IT organization serves the business from providing PC break/fix services to providing internal consultative services to other business units.

• The IT organization has aligned itself with the business; it serves the needs of the business in ways that the business wants and needs.

• The IT organization can perform IT due diligence activities for mergers and acquisitions.

• IT is an asset in helping the business comply with regulatory and compliance requirements.

• The IT organization has a good record in completing projects on time and on budget and demonstrates operational competency in all core areas.

• IT looks for ways to offer a competitive advantage to the business.

• IT is seen by all levels of the organization as a valuable part and user-friendly service.

• The CIO has a good working relationship with the CEO, and ideally, reports to the CEO.


�0


The successful IT operation works to insure that the IT operation is delivering tactical services, but operates on a strategic level that the business finds valuable. The CIO has made it a priority that no disconnect or insularity develops between the IT operation and the business. obstacles to alignment1

The obstacles to alignment are as numerous as they are complex and reflect the historical youth of IT as a profession—the IBM ��0 was created in �9�4—compared to the experience of business that pre-dates the Roman Empire. With different historical experiences and different educational and training experiences influenced by history, corporate executives frequently have conflicting opinions about the role IT should play in the business. At the same time, IT executives also suffer from confusion about IT’s role in the business. Is IT an infrastructure technology or can it really provide a competitive advantage?2

In addition, confusion reigns in some organizations about the role of the CIO. A 200� survey of CIOs sponsored by Deloitte Development LLC and conducted by IDG Research Services Group in October 200�, found some interesting results that illustrate the complex and often contradictory roles of the CIO �:

� This line of thought is adapted from the work of Ann Senn, Deloitte Consulting, LLP, Global IT Strategy Leader.

2 Nicholas G. Carr, “IT Doesn’t Matter,” Harvard Business Review, May 200�, p. 4�-49.

� Deloitte Consulting LLP, Deloitte Consulting Survey 200�, p. �.


�1


• �5 percent of IT executives say “ineffective communication of business strategy and goals between business management and IT” represents a “significant” or “moderate” challenge;

• 49 percent say the “lack of a defined business strategy” is a “significant” or “moderate” challenge;

• �� percent say a prevailing culture that allows business units to make their own technology decisions is a “significant” or “moderate” challenge; and

• 55 percent cite “weak support from senior business management” as a “significant” or “moderate” challenge.

Deloitte suggests that the communications disconnect identified above, is the result of differing perspectives between CEOs and CIOs. As Deloitte's Ann Senn puts it, “Most CEOs love the products, love the customers, and hate getting into details. They are superb at delegating.” Good CIOs deal in explicit facts, lots of them, and struggle with ambiguity. They have overwhelming “today” challenges—project delivery, applications maintenance, costs, vendors, risk management, and people problems. “Their jobs cry for decisive, thoughtful action.” Senn says. Conflict between and among IT executives and their bosses may be inevitable and it obviously interferes with the goal of IT-business alignment, but such conflict is not necessarily a bad thing. The challenge facing C-level executives, and CIOs in particular, is to find ways to mitigate the conflicts that separate them and ultimately damage the business.4

4 Ibid, p. �-7.


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recommended strategies for achieving it-Business alignment

The quest to achieve IT-business alignment can be facilitated by following some basic guidelines. These guidelines are presented below:

• Clarity of Mission—Never underestimate the need for clarity and the documentation of a mission. If IT has a role to play in a strategy or a project, what that role is needs to be documented, have deliverables identified, and have a timeline for completion. These elements help prevent “mission creep,” exhausting resources, and delaying projects.

• Executive Understanding—A great deal of the grief that CIOs receive from their business counterparts is justified and is a result of a failure of IT’s customers to understand what technology can and cannot do. You don’t go to a heart surgeon to have a cavity filled, and you don’t go to IT to increase sales. The CIO needs to educate, train, and persuade the C-level and the board-level as to what IT’s capabilities are and to set reasonable expectations about what constitutes success.

• Practical Timeframes—We live in a world where “continuous partial attention” is seen by many as a virtue, where everything is mission critical and every project or task has to be completed by the end of the quarter. As “Dr. Phil,” says, “Get real!” Sometimes these conditions apply, most of the time they do not. Trying to complete six months of work in sixty days is a bad idea when working with new technology and multiple vendors. Choose realistic timeframes, use good project management practices, and monitor your vendors.


�3


• Published IT Strategy—When people assume understanding without discussion, there is often no understanding; never assume. The CIO should have a clear, unequivocal understanding of IT’s role in the company. Having such an understanding is the foundation for success and the cornerstone for IT-business alignment.

• IT Organizational Review and Alignment with Mission—One of the “hot” topics in IT today is “portfolio management.” The theory behind this trend is that the projects that IT is working on have been reviewed and are in alignment with the business. Sounds like a good idea; do it at the same time IT strategy is discussed to increase the clarity and understanding of mission.

In the final analysis, IT-business alignment is a matter of communication, realistic planning, and leadership from C-level executives. No secrets involved, just a lot of hard work, sweating the details, and setting realistic expectations. It’s not glamorous, usually not fun, and often unrewarding, but it goes to the heart of business-IT effectiveness.


�4


SecTion 2 the support center’s Balanced scorecard

service Model5

Ron Muns, Founder and CEO, HDI®

I worked in conjunction with Mark Ellis of Kronos (www.Kronos.com) as well as our Strategic Advisory Board (SAB) to define a model for measuring the performance of IT service and support (the support center). The results of this work are included in HDI’s support process guidebook.

Most of it focuses on processes based on ITIL®; however, it also covers other important processes for support centers that are not covered by ITIL. Mark and I have documented an operational Service Model that balances key performance metrics that often conflict with one another. For example, customer needs, at times, seem to be at odds with costs/productivity goals. While both are important, they can compete for your attention.

What is a Balanced scorecard (Bsc)?

A new approach to strategic management was developed in the early �990s by Drs. Robert Kaplan (Harvard Business School) and David Norton. They named this system the ‘”balanced scorecard.” Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear view as to what companies should measure in order to “balance” the financial perspective.

5 Muns, Ron and Mark Ellis, “The Support center’s Balanced Scorecard,” The Muns Report, December 8, 2004.


��


The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate these into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise. Source: The Balanced Scorecard Institute

support center Bsc service Model

Effective financial and operational management for any support center operation should be directly linked to an integrated Balanced Scorecard Service Model that focuses on customer satisfaction, employee satisfaction, costs/productivity, and organizational maturity. Utilizing these four elements to form a high-level goal set with supporting Key Performance Indicators (KPIs), also known as key business indicators or operational metrics, will not only allow a support center manager to look at past performance and trends, but also will allow for optimized forecasting of future costs, operational performance, and service levels based on workload for the projected base of customers, whether internal or external.


�6


the support center Balanced scorecard service Model

Customer Satisfaction Goals• Supporting KPIs

•

•

•

Employee Satisfaction Goals• Supporting KPIs

•

•

•

Costs/Productivity Goals• Supporting KPIs

•

•

•

Organizational Maturity Goals• Supporting KPIs

•

•

•

customer satisfaction

Customer satisfaction is generally measured via customer surveys. To minimize bias, an external firm should ideally conduct these surveys. External survey firms may also offer comparative industry data or provide additional analytics on survey results. When this is not possible, efforts should be made to assure survey participants of the value of their honest responses.

The primary customer satisfaction survey is transaction based, which involves utilizing an abbreviated set of questions based on closed incidents (phone, e-mail, or Web). These surveys are usually focused on a limited number of questions specific to an incident during a given period, and specifically target the person who generated the original incident. Standard sample questions might include:


��


• Please rate the accuracy of the solution provided. • Please rate the timeliness of the solution provided. • Please rate our initial responsiveness to your incident. • Please rate the professionalism of the support engineer

who answered your incident. • Please rate your overall experience for this incident.

Other indicators of customer satisfaction might include repeat usage of support center services (mostly applies to external support organizations) and percentage of customers participating in surveys. If customers don’t think their input matters, they won’t respond.

employee satisfaction

In any service business, the people who deliver that service are the essential product. Despite this, many service organizations, including both internal and external support centers, do not properly manage and maintain their employees’ general job satisfaction. This can impact both customer satisfaction as well as the cost of operations.

An employee survey should be conducted twice a year with each employee, ideally about six months apart. Regular surveys will allow comparison of results and will identify improvement and/or dissatisfaction over time.

Finally, companies that effectively manage employee satisfaction do not always have the highest pay scales for their area. Pay rates are often ranked as the third or fourth most important issue on employee surveys. Generally, communication and training will frequently be more of an issue. Well-managed customer support


��


centers that can integrate employee needs into an effective service delivery model will become a target employer of future employees.

costs/productivity goals

It is time for the industry to come together and agree on definitions and methods for developing cost metrics. This is the only way that benchmark comparisons can have any value. Standard costing (and operational) metrics allow support organizations to understand their cost structures and operational efficiencies in comparison to other organizations or within the organization itself. It will help you understand and answer questions, such as:

• Are we spending too little on support infrastructure and too much on labor?

• Are our costs for e-mail support too high? • How much could we save by moving our end-users

from phone support to self-help? • Are our costs high because we have excessive

overhead allocations? • When can we expect to get a return from the

introduction of new support tools? • We do level one, level two, and level three support and

thus our cost per incident is higher than our competitors. Does management understand that our competitors support costs only include level one support? Or, does management understand that the competitor’s support organization only provides log and route support?


��


Doing costs/productivity analysis on the support organization eventually boils down to calculating costs in terms of cost per unit of work and per service delivered (i.e., per incident). The most important unit is the cost per incident, which should be computed separately by channel received (phone, self-help, chat, e-mail, self-healing, etc.). This analysis may be further broken down by products or services offered.

organizational Maturity

Of the four quadrants; customer, employee, costs/productivity, and organizational maturity, this last one is the most strategic and the most subjective. It is focused on the structure, ability to change, quickness, responsiveness, and strategic positioning of support within the larger organization. Organizational maturity enables customer and employee satisfaction with optimal cost structure. Elements to track that indicate organizational maturity include:

1. Visible executive support of the support center.

2. Time to fill knowledge gaps—When new errors are identified, how long does it take to document the problem and the solution? How long does it take for this information to be available to the support analysts and end-users (customers)?

3. Time to employee proficiency—How long does it take for new employees to be productive?

�. Time to new product proficiency—How long does it take for the support organization to be proficient on new products?


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�. Flexibility of cost to changes in workload—How quickly can the support organization change the cost structure (up or down) as work varies?

�. Diversity—Has the organization embraced the value of racial and cultural diversity within support? If the organization has global team members, are they aware of cultural and local issues that vary the definition of best practices.

�. Work elimination through problem management and change management—Tracking of cost savings resulting from identification and elimination known errors.

�. Formalization of IT processes—Tracking indicators that the support organization has integrated all support processes with those of other IT functional areas.

conclusion

The key to the BSC Service Model is to continually improve in all four quadrants. It is easy to improve customer satisfaction if you don’t consider costs. It is easy to lower costs if you don’t care about employee or customer satisfaction. It is easy to mature as an organization if you don’t focus on anything else. The key is in the balance. The ying and the yang of the support center. As with life, it is about balance. By understanding how our management decisions affect our customers, our employees, costs, and our future, we can evolve into that wonderful, but elusive “world class” support center.


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SecTion 3:assess Your Metrics program�

introduction

How do you know whether your current performance metrics are the right ones for your business or functional area? You could have them audited by an expert, but you can do much the same yourself. Examine carefully what they’re supposed to do and compare it to what they’re actually doing for you.

Consider your metrics as a group and rate them as follows:

� = No value on this goal2 = Some help on this goal� = Quite helpful on this goal4 = Extremely valuable on this goal

How well do your performance metrics:

Translate your business strategy into concrete action?

Align departments behind goals?

Fully reflect what your stakeholders care about?

Provide the leverage to create change?

� Adapted from, Frost, Bob, Measuring Performance, (Dallas, TX: Measurement International, 2000) p. �8-�9 See also http://www.MeasurementInternationa.com.


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Balance leading and lagging indicators (Note: Lead and lag indictors are discussed in Figure �-Directions for Creating Performance Measure Data Dictionary Entries.)

Balance strategic and operational indicators?

Enhance your ability to compete in the future?

Drive improvements in how work is performed?

Include internal and external benchmarks to judge performance?

Total your ratings. A total of less than �8 suggests your metrics are falling down on the job. If your total is �8-27, there’s solid value in your metrics but also room for improvement. Totals over 27 suggest your metrics are among the best.

The questions in this evaluation represent the kind of help you have a right to expect from your metrics. Any you didn’t mark a � or 4 suggest possibilities for improvement.

Should you revise your metrics, tweaking them here or there? Or should you stop patching and rethink the system completely? Your ratings give a summary answer. But you’re the one who must ultimately be satisfied with how you track business performance. You and those you report to should have a solid “big picture” understanding of performance in your area.

METRICS CATALOG SERIES: VOLUME 4

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