7 Steps to Creating Quality IT Key Performance Indicators (KPIs)

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IT Service Management Professionals

7 Steps to Creating Quality IT Key Performance Indicators (KPIs)

Posted by Phil Hellerman

Fri, Feb 13, 2015

Success with an IT Service Catalog truly translates into a higher objective – delivering services correctly and consistently to happy customers.  A beautiful Service Catalog or employee self-service portal front door leading to poor, inconsistent services will be a failure, and will make customers even angrier than before given you have raised their expectations – then not delivered. Key Performance Indicators (KPIs) are the telemetry that underpins consistent, high quality service delivery. There are 7 steps to creating good KPIs. In today's post, Step #1:

 Review the organizational strategy and identify touch points to the cross-functional areas you are measuring.

When creating or identifying Key Performance Indicators (KPIs), you must first identify and understand the business strategy. Business managers expect to leverage the IT spend to provide a competitive advantage in the marketplace. By aligning the KPIs to the corporate strategy, business management is provided an opportunity to assess and understand how the IT organization is performing in support of the business.

KPIs supporting a corporate entity with a low cost mission strategy will be far different that those KPIs supporting other areas of the customer demographics. For example, let’s look at the business strategies of two retailers, Family Dollar and Neiman Marcus. Family Dollar describes itself as a “small-format value and convenience retailer” that strives to serve its customers “with value and convenience”. In contrast, retailer Neiman Marcus’ has a strategic vision to serve “the unique needs of the luxury market”.

Key Performance Indicators supporting each retailer will vary greatly; one will focus on cost and productivity while the other will focus on quality and continual improvement. The table below compares potential KPIs for each enterprise based on the strategy of the organization. 

 

Cost KPIs

Quality KPIs

Cost to resolve an incident

% of emergency changes

% of operational & capital cost reduction in IT service

 % reduction of CI errors reported in the CMDB

Employee cost per customer SaaS instance

% reduction of Incident tickets that were inappropriately closed

 

NEXT WEEK  - Steps #2 and #3:

 Identify and list all existing metrics and reports

Communicate metrics and gain agreement by leadership, stakeholders and SMEs.

 

Topics: Service Catalog, IT Service Catalog, IT KPI, Employee Self-Service Portal, IT KPIs, Key Performance Indicators

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