Measuring Business-IT Integration

So we understand now what is meant by business service management or BSM and some of the critical success factors. Measurements are at the core of enabling IT organizations and IT leadership to assess how well IT organizations are supporting their respective businesses and customers. We will focus on indicators that help IT organizations appreciate the extent to which they understand their customers’ businesses and the level of support that they provide to their customers to achieve their respective business objectives.

Some of the factors that will be critical (aka Critical Success Factors or CSFs) to the overall success of Business Service Management initiative are listed below.  Each Critical Success Factor or CSF in turn comprises of a range of recommended indictors that will help us assess / measure the performance (aka Key Performance Indicators or KPIs) of our Business Service Management. Depending upon your particular situation and circumstances, you may decide on a subset of these metrics.

• Quality and maturity of business and technical services (IT services)
• Business process enablement and support
• Business-IT integration

In this blog, we will discuss the key indicators that will help us measure how well we are able to achieve the quality and maturity of business services that we offer to our customer(s) and technical services that actually implement those business services. 

Quality and maturity of business and technical services (IT services)

This critical success factor or CSF is about the quality and maturity of IT services. Once an organization embarks on the BSM journey, it is vital that we are able to demonstrate an improvement in the quality of services that we deliver to our customers. In addition, we need to continually measure and improve our IT processes that underpin our IT services.

Some of the KPIs that will help us measure this factor are as follows:

• Average response times to changing business goals and needs

• %age of IT resources involved in operations (keeping the lights on) vs. new development

• %age of IT budget spent in developing new IT services / capabilities compared to the total IT budget

• %age of IT budget spent in managing existing IT services

• Ratio of IT budget spent on developing new services to managing existing services

• %age of IT services (business or technical services) provided by supplier (i.e., outsourced)

• %age of IT services that use standard technology components and other standards

• %age of technical documentation and other training manuals that are up-to-date

• %age of incidents for which external suppliers are contacted for further assistance.

• Ratio between the total number of employees within IT organization to the total number of non-IT employees within the business organization.

Business Process Enablement & Support

The level of business value delivered by IT services depends upon the extent to which these services enable and support the business processes. Some of the performance indicators that will help us measure our IT services in terms of business value delivered are as follows:

·   %age of IT projects that deliver the value on investment (or VOI) as assessed and agreed in related business cases.

·   %age of revenue generated through the use of IT services

·   %age of services for which cost of unavailability is well understood and properly communicated.

·   %age of business processes that rely on IT services

·   Number and %age of users that depend on IT services to perform their day-to-day job functions

·   %age of service improvement decisions made on the basis of quantitative as well as qualitative service performance as well as perception related data / information.

·   %age of services for which business / customer perception of service quality is calculated.

·   %age of # of key business decisions that are made based on the information / knowledge processed and provided by IT services. 

Business-IT Integration

How do you measure the extent to which you IT is integrated with the businesses and / or customers that you support. Following are the key performance indicators or KPIs that will enable us to understand how well IT is integrated with the business. These include:

·   %age of IT projects (per year) that are business-driven, are initiated by IT, and are a result of alignment of business and IT strategies. These projects are considered innovative and will result in enabling core business processes and / or addressing core business needs / pain points. These projects must be conceived within IT.

·   %age of IT projects (per year) that are business-driven and are initiated by the business. These projects must be conceived with business.

·   %age of investments made in IT development compared to the total investments across the business enterprise (applies to internal IT service provider)

·   %age of IT budget of the total revenues of the business enterprise

There are other KPIs that are related to specific ITILv3 processes e.g., Change Management has its own KPIs, Service Asset and Configuration Management has its own KPIs and so on. Relevant ITILv3 literature should be used to understand, identify and select specific metrics to measure the maturity of these processes.