ITSM Performance-Based Management
Author: Karel van der Poel
GROWING ITSM INFORMATION DEMAND
Increasing regulatory requirements. Tightening budgets. Fewer resources. Without question, IT organizations today face more pressure than ever to operate efficiently and profitably in constantly changing environments.
Business leaders realize that information ” the right kind at the right time ” is the key. As a result, the sheer volume of data being collected and managed by organizations is increasing dramatically everyday. Consider these statistics:
By 2012, enterprises will be dealing with 30 times more data than in 2002 (Gartner)
60% of executives say that the amount of decision-making data available to them was doubling or tripling every year. Over 70% say they are making more daily decisions than a year ago, more than 50% feel they have less time for those decisions, and 49 percent believe they are missing business opportunities. (Buzzback)
Today, more than ever, organizations that are struggling to manage meet these requirements need to maintain increasingly agile and flexible infrastructures.
WHAT ARE IT ORGANIZATIONS DOING TODAY?
In the face of escalating complexity, companies are turning to their IT organizations with the requirement for the real-time IT information and transparency that many of the new regulations and standards require. In turn, many IT organizations have turned to Business Intelligence (BI) solutions that promise these capabilities while delivering increased transparency to the customer.
Typically, the information used to manage IT services is available in silos from dedicated applications (i.e., network management, application performance, support response times, project schedules, etc.) rather than from a single source. In addition, that information is often technical data that needs to be transformed into business information to be easily assimilated by IT stakeholders. However, for many organizations, the integration effort of existing BI tools with heterogeneous systems and data sources is prohibitive in both resource and capital investment.
For those companies that can implement real-time capabilities, many are faced with the problem of having too much data. For many users, real-time information is similar to “drinking from a fire hose”. The volume of data comes fast and furious and actually has the opposite of the intended effect - the information needed to develop strategic insight gets lost in the flow.
Most BI toolsets are incomplete (a recent TDWI/Giga Research survey reveals that organizations use an average of 3.4 BI tools) and do not provide data connectors to commonly used IT Management applications. Further compounding the problem is the fact that most IT Management vendors lack a unified solution for their own platforms and products that typically has grown thru acquisition. As a result, customers are often left to manage multiple basic point-to-point reporting solutions that fail to provide an integrated, holistic view of IT Management processes, services, projects, risks and resources.
What are some of the other solutions to which organizations have turned? Some rely strictly on Service Level Agreement (SLA) reporting. This is vitally important to ensure contractual obligations are being met, but fails to give insight into cost efficiency, human resource utilization, or the quality of processes being used for service delivery. Other organizations have focused on Business Service Management (BSM), mapping IT services to business functions to determine actual business impact. As with SLA reporting, BSM is useful, but fails to provide insight into cost efficiency, human resource utilization, and process quality.
When faced with these alternatives many organizations stick with existing “spreadsheet management” solutions rather than running the risk of yet another failed attempt at a BI or analytics project. As a result, many companies remain in reactive environments suffering real competitive disadvantage and significantly higher costs of doing business.
THE SOLUTION: ITSM PERFORMANCE-BASED MANAGEMENT
What is the best solution to the complex maze of problems facing organizations today?
For companies that want real insight and a consolidated view of all IT activities, the solution is implementing a Performance-based Management initiative. Performance-based Management utilizes principles and processes that enable organizations to consolidate data and reports from disparate systems to provide valuable insight into past and present organizational performance. Over time, companies will be able to predict and preempt potential missteps.
When a Performance-based Management initiative is managed through a personalized IT information portal, personnel can avoid the information overload that is often association with real-time information. In addition, information can effectively be distributed only to those allowed to use the information through straightforward role-based authorizations.
Performance-based Management creates a holistic view of the organization and, if coupled with the processes provided through IT Service Management (ITSM), can provide true alignment between your business needs and the IT upon which it depends. Performance-based management can create insight into service delivery, process quality, project risks, resource utilization and IT compliancy trends.
ITSM Performance-based Management eliminates silos of information and processes to focus on execution, not simply technology. Organizations become free to focus on the quality of the services it delivers and achieve measurable ROI. Robust libraries of Key Performance Indicators and metrics are available to provide guidelines that businesses can leverage and get started with governing IT service, project and application portfolio’s and their relationships.
WHERE DO I BEGIN?
Successfully implementing an ITSM Performance-based Management solution doesn’t happen overnight. The goals, however, are straightforward: achieving operational excellence, improving profitability, improving time to market, and achieving real competitive advantage. Adopting a tried and tested methodology for deployment creates a roadmap for avoiding expensive and time-consuming missteps.
Set Objectives: Decide what you want to achieve and document your objectives. Use best practice resources to determine your KPIs.
Establish an Integrated Performance Measurement System: Establish a process which integrates reporting and analysis across all IT disciplines and silos of information. Performance-based Management is about integrating performance with Accountability and improvement programs. Think in terms of People, Process, and Technology - without proper technology you could drown in spreadsheets.
Establish Accountability for Performance: Accountability is necessary throughout the deployment process. Personnel should be driving performance objectives and continuous improvement.
Collect Data and Trends: Establish a baseline to identify “normal performance” as fast as possible. These metrics should be collected and stored in a single integrated data store to serve as the foundation of a personalized IT information portal.
Define a Process for Analysis, Review, and Reporting: Analysis is critical in order for management to be able to review, make mid-course corrections, and report performance information that has been collected during the performance cycle prescribed for the organization
Develop a Process to use Performance Information to Drive Improvement: Establish a clearly defined process to distribute information to all stakeholders and drive improvement programs that result from the information.
THINGS TO WATCH OUT FOR:
Some organizations struggle with their Performance Management initiatives once they have decided to move forward. Being aware of the potential problems and pitfalls is the best defense against failure. Here are some common pitfalls to watch out for:
Avoid the “Big Bang” approach: Build a roadmap and don’t start trying to cover all IT domains at once. Focus on today’s available metrics and build a roadmap to capture more data through improved IT management processes.
Key performance indicator definition studies: “We are not ready for an application yet. We need to decide what our key performance indicators are before we do anything else.” The truth is: you may never be ready to determine the perfect set of key performance indicators. Why? Because as your business is changing, your indicators will be changing. Be pragmatic and start building a history of performance today.
The customized data warehouse: Do not turn your performance-based management implementation into a huge technical project. It’s not about system integration and data warehouse design. Managing metrics should not differ from one company to another.
Management by spreadsheets: Often, performance-based management in organizations begins with a small spreadsheet to track a small number of indicators and metrics. The spreadsheet rapidly grows to become a shared workbook with multiple people inputting data. Eventually, the maintenance cost and reliability of the data eventually is in jeopardy and the spreadsheet becomes so sensitive that it can only have limited distribution. While spreadsheets are inexpensive and allow you to start quickly, they become cumbersome and prevent you to cross the “finish line” of your project.
Why would I provide my manager with a stick to beat me?: Implementing a performance-based management system can uncover some unpleasant realities, but a well conceived program can provide personnel with a roadmap to greater success and reward. Communication is critical, performance-based management is built upon a culture of improvement, not one of passing the blame.
SUMMARY
In light of increasing regulation and competition, organizations need to get the right information at the right time in order to make the best decisions possible. For the IT organizations that bear the bulk of the responsibility for making this possible, there is a solution: ITSM Performance-based Management. By choosing an ITSM Performance-based Management solution, organizations can focus on the quality and cost effectiveness of processes & resources, rather than simply achieving required benchmarks, and provide true alignment between your business needs and the IT services upon which it depends.
ABOUT THE AUTHOR:
Karel van der Poel has worked over 10 years in the ITSM industry. He started his career at PROLIN Software in the early nineties, PROLIN, a Dutch company of origin was in the business of developing Service Desk applications and was one of the early adoptors and of ITIL and ITSM. PROLIN was acquired by Hewlett Packard OpenView Software division in 1997. At Hewlett Packard Karel became part of the ITSM division at OpenView Software.
Today, Karel van der Poel is CEO and co-founder of Mirror42. Mirror42 is leading the charge to bring robust, rapidly deployable ITSM Performance Management Dashboards to organizations worldwide. Mirror42’s ITSM Dashboard solution provides a personalized information portal for IT stakeholders and, rather than taking the traditional approach of many Business Intelligence vendors, utilizes a Service Oriented Architecture to simplify the collection and distribution of critical business information from underlying IT Management applications. By combining this architecture with our extensive ITSM Metric & KPI libraries, companies can realize significant ROI through faster deployment and reduced implementation costs.
