Conversations from the Mirror42 Team

This article describes the concepts of Critical Succes Factors (CSF’s), Key Performance Indicators (KPI’s), Metrics, and Outcomes & Benefits. It describes these concepts and it includes some examples within the context of IT service management.

As a European, I am amazed with all the statistics during an American baseball game. Keeping scores seems to be a national hobby. But they do have a purpose. As in any sport, the objective of the game is to score more runs (points) than your opponent. There is a very clear objective, and in each stage of the game, different tactics and people are applied - based on statistics. This enables going forward to best outcome based on previous experiences. This book “Moneyball: The Art of Winning an Unfair Game” even poses that using a better set of statistics gives a competitive advantage.

So, does this also apply on something, like say, Change Management (as defined in the ITIL library)? Change management is not a repetitive proces, each change can be different, but the main goal seems clear: implement a change cost-effective without non-planned disturbance for end-users. Let’s say we have statistics from previous experiences, that tell us that the type of change that we are planning has failed its objectives in 35% of implementing such as change. Maybe we even know that in all change implementation we have on average 4 hours more downtime as planned (unplanned disturbance). Maybe we even know that changes planned in the weekend have a 90% more change of being performed within its objectives (maybe due to the fact that the people who are responsible are not directly disturbed by other problems). So what would be the course of action, looking at previous experiences. I would say, we have any of the following ‘game plans’:

1. plan in the weekend
2. communicate more planned down-time to manage expectations of end-users
3. put your best performing people on the job (if it is critical that this change does not fail)

Although you may not be able to change the objectives of the game (# 2), I think the statistics of previous experiences gives input to the game plan to ensure that the objectives are met. You might even fail, but that gives new input for future changes. This is one of the reasons to track Key Performance Indicators (KPIs), the baseball statistics of business processes: learn from experiences to improve your game plan.

P.s. I have posted some baseball KPIs in the KPI library.

This interesting blog post comments on choosing Key Performance Indicators (KPIs) wisely to avoid an information overload. Although focused on supply chain management I believe this principle applies when measuring any business process.

“Following Pareto’s Principle and focusing on the 20% of metrics that are actually telling you how 80% [...] of business performance is actually being generated does deliver better results. The issue will become what are you going to use? Concentrating on the basics will provide a far better [...] dashboard to equip managers to focus on the real drivers of the [...] process.“

“Look to provide more than this and you are heading into information replication and data overload resulting in management delays in exercising decision making power and confusion over what the metrics are actually trying to tell you.“

A list of 10 characteristics of a good KPI published by TDWI:

#1. KPIs Reflect Strategic Value Drivers
#2. KPIs Are Defined by “Executives”
#3. KPIs Cascade throughout an Organization
#4. KPIs Are Based on Corporate Standards
#5. KPIs Are Based on Valid Data
#6. KPIs Must Be Easy to Comprehend
#7. KPIs Are Always Relevant
#8. KPIs Provide Context
#9. KPIs Empower Users
#10. KPIs Lead to Positive Action