The Metrics Monster

A hi i VOI d ROI th h Achieving VOI and ROI through Effective Metrics

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Agenda

The Metrics MonsterU i th 7 St Using the 7-Step Improvement Process to Achieve VOI and ROI

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The Metrics Monster

The issues that arise when we use measurements and metrics to drive behavior instead of usingand metrics to drive behavior instead of using

metrics to achieve VOI and ROI

Letting only financial goals drive our desire for VOI and ROI, instead of seeing gthe results of ITSM

VOI = Value on Investment = warm fuzziesROI = Return on Investment = cold facts

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ROI = Return on Investment = cold facts

The Metrics Monster

The disconnect that results from reverse engineering IT Services from a set of measurements and metricsIT Services from a set of measurements and metrics

Building from the bottom up Building from the bottom up, without top down designIdentifying processes and Identifying processes and technologies as services

You cannot deliver “Change gManagement” like a product

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What should you measure?

Focus first on the customer and their needs (i.e. IT Services)

Identify your customer or market segments

Services)

market segmentsGather customer requirements for services they desirefor services they desireIdentify quantifiable aspects of the requirements by breaking the requirements by breaking down the requirements into more granular pieces.

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g p

What should you measure?

Gather requirements like you would for any other q y yneeds

Build measurements and metrics based on the metrics based on the most granular pieces Aggregate together to gg g gfind meaningful points to baseline

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What can you measure?

Validate the measurements and the metrics

What will they do with the information and knowledge you will provide to them?How will they use the information to see VOI and ROI?

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Gather the data

Using various outputs, gather only the data needed to fulfill the measurements

L k i ll S i

to fulfill the measurements

Look in all your Service Management toolsDifferentiate between Differentiate between data and information

Do not waste time collecting unusable or i t t i f ti

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unimportant information

Process the data

Identify the “currency” that your customers use

Translate dollars into hours or hours into dollars

40 FTE Hours * $100= $4000Slice and dice

Excel is your friendPivot tablesHi tHistogramsStatistical tools

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Analyze the data

Analyze the information using proven statistical, analysis and critical thinking methods and techniques

ROI Calculator

and critical thinking methods and techniques

Control chartsAdvanced Statistical toolsBrain power

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ROI Worksheet: Fewer IT Service OutagesFewer IT Service Outages

outages per month_____ outages per monthAverage outage: _____ minutesAverage users impacted: g p _______Average user rate: $_______/hourOutage costs = $________/minuteOutage costs = $________/hourOutage costs = $_________/month

Reduce by 20% = $________/monthReduce by 35% = $________/month

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Reduce by 50% = $________/month

Sample ROI: Fewer IT Service OutagesFewer IT Service Outages

10 t th A l 10 outages per monthAverage outage: 15 minutesAverage users impacted: 100

Annual Cost: 120 Average users impacted: 100

Average user rate: $50/hourOutage costs: $83/minute

120 Outages x .25 hours Outage costs: $83/minute

Outage costs: $5,000/hourOutage costs: $12,500/month

x 100 users x $50

Reduce by 50%: $6,250/monthx $50 hourly= $150,000

At 1000 I t d U $1 5M

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At 1000 Impacted Users: $1.5M

Present the data

Translate the analysis into meaningful pieces of information and knowledge

Understand how your customers

information and knowledge

yintend to use the information and knowledge Use their language

0%, 50%, 100% OptionsRecommended solution

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Take action

Be willing to throw out measurements and metrics if the customer sees no value in them

Follow up on the chosen recommendation

the customer sees no value in them

recommendationBegin a projectIdentify accountable individualsIdentify accountable individualsIdentify funding

Begin the cycle againBegin the cycle again

Remember: Metrics are the results and the goal not the beginning

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the goal, not the beginning

Questions??

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