10 Metrics for a New CIO

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My friend Vinnie Mirchandani is advising a new CIO colleague who is looking for a short and hard-hitting list of IT metrics to start tracking.  I’m a big believer in the less is more philosophy in terms of measurement.

Here are 10 IT metrics that I really like and that I think nicely balance strategic and tactical, apps and ops, projects and process:

  1. Multi-year view on productivity, something like (Discretionary IT Spend)/(Total IT Headcount).  This could normalized it with some factor for “effective” discretionary spend assuming all projects are not 100% effective.
  2. Percentage of discretionary spend categorized by type.  A few categorization models include – Run | Grow | Transform (Howard Rubin) – or Infrastructure | Transactional | Informational | Strategic (Peter Weill/MIT) and see if it matches where the business is headed.
  3. Number of bug fixes and enhancement requests for top 20 systems.  This is a quick indication of functional and technical health of applications.
  4. Average hours/days to close critical/high support issues.  You gotta get the platform stable before focusing on other stuff.
  5. Percentage of projects using enterprise HW/SW standards.  This is a good way to make sure there isn’t a proliferation of exceptions, non standards, multiple “enterprise” standards.
  6. Number of hours/days of training per person/team/area.  Training is an unbelievably neglected area in IT – this shows you care about your people.
  7. Number of projects in each phase of the SDLC and average times in each stage (view of overall project pipeline, identify bottlenecks, etc.)
  8. Some kind of customer/user measure if the company has any customers using an online channel – avg time on the site, top content viewed, top issues/comments, etc.
  9. Percentage of projects who deliver 100% of their planned scope or %scope delivered.  On-time/on-budget doesn’t mean as much as “did i deliver what the business needed?”
  10. Core application availability (not technical SLA stuff, rather apps availability when users need it)

I think external and internal customer satisfaction is also very important. But, aside from a general customer satisfaction survey, I haven’t seen anything too innovative or useful.  I’d be interested in any ideas you have on the customer sat front.

No matter what you measure, keep it simple.  Get your measurements figured out first, forget any tools.

cc licensed flickr photo shared by Alaskan Dude

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  • David Eddy64

    I don’t see anything on that list that looks at understanding the ENTIRE software portfolio. To the best of my knowledge IT seems to be the only (?) industry that doesn’t keep track of it’s own “inventory.” Why is this?

    How can you keep track of the “top 20 systems” when you don’t really know if you have 500 or 5000 systems in your portfolio. A system may very well be in the bottom 50 because it’s just ticking away without a hiccup for decades… and the ONE person who knows the system is coming up on retirement.

    I don’t know… maybe the CIO is just too busy with immediate term issues.

    So WHO is keeping an eye on the whole enchilada? Just seems like an overlooked risk, particularly with the baby boomers increasingly coming up on retirement.

    Surely no one’s going to argue that all the life insurance companies in the country that depend on 30-40+ year old Fortran actuarial systems are going to re-write these systems in Java or deploy them as web services in SOA?

    • Pankaj Kakkar

      David, you have hit the bulls eye. My view of metrics/focus area should be
      a) Hygine – Delivery on benefits, cost. App availability
      b) Getting house in order – application Asset library, maintainability with a sell by date, estimation, CI
      c) Integration/Simplification – Simplify technology landscape, decommission redundant apps
      d) Analytics – Patterns in data to help devise business strategy
      e) Innovation – Real innovation rather than incremental improvements. One that will result in new business line or substantial change in product portfolio.

      Metrics in all of above cases except for 1) & 2) would be subjective. However once you start reporting, you will be amazed by how much you will learn over time by relatively comparing today with a year back.

  • Thanks David. This list isn’t meant to be comprehensive, but something that a new CIO could start with. Here are some more suggestions from Andy Graham on the IT Architects Network group on LinkedIn:

    – A measure of overall data quality levels within the organisation.

    – The costs of managing the organisations data. (M)

    – The value derived by the organisations data. It is possible (although it does take some work) to measure the actual value of data assets. (V)

    – The ratio of return on the organisations data = V/M.

  • Chirag Mehta

    Chris,
    Very practical and applicable metrics. Three more based on my experience in tech/mgmt consulting space:

    1. Cost of IT service/user – this is important for internal IT team to bring together the capex/opex side of IT costs and for business to understand their cost usage. Any firm and its internal (or outsourced provider) should aim to reduce this YoY

    2. Number of innovations made by the CIO team to business development – this will focus the growing challenge of CIO’s positioning within the company and will force to think – whether IT is a technology service provider or business innovation partner. With most of business strategies driven by technology/information, it is important that ‘innovation’ is a focus and IS/IT is closely aligned with business to drive new innovations

    3. % of satisfaction within the IT community – this is important because morale/credibility plays a very important role and will force the company to think how to leverage IT capability by making it relevant, interesting and innovative

    Will be interesting to hear your thoughts.

    Cheers,
    Chirag

    Director, Acumentum Consulting

  • David Statham

    Three additional measures that i would like to see up there;

    1. Is there a culture of measuring project benefits post implementation – do we get at least a $ of benefit for every $ invested ?
    2. Are there any measures of IS Stakeholder satisfaction – I believe in a small set of targetted questions to business leaders (one level down from the top functional leaders) supported by as much commentary as you can get – real powerful data for knowing what your customers think and what you need to fix
    3. Do measures exist that measure deliverables / success in customer terms (not IS terms) ?

    The measure I get stuck on and never know a good answer for is a high level measure for development productivity – we delivered our projects generally on time and to cost, but could we have done it cheaper. quicker – have I got into a culture of expensive, over engineered projects that have simply become the norm ?

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  • A few more great comments from LinkedIn groups.

    From Bruce McCullough:

    I suggest that you add ITIL based service management metrics to the base set you suggested. Operational efficiency is critical to the success of an organization.

    Also, you’ll need a set of metrics that will vary according to the company size, the vertical, and where the company is in their business cycle. The same metrics that work for startups/growth do not work for turnarounds/realignments and the metrics will continually change as the company goes through various phases.

    From Sam Homer:

    Good list, and very relevant discussion. I have a 5-point list that I believe encompasses many of listed metrics (for example, Customer Satisfaction can include SLA, among otheers):

    * Workload
    * Quality
    * Cost Productivity
    * Customer Satisfaction
    * Alignment: IT investment supporting business strategy & growth

    Of course, each of these would have a detailed source and work list, and a tracking methodology.

    From Y’vonne Ormond:

    Good list but there seems to a gap in security, compliance and vendor metrics. I’d represent something with a little more meat focused in 5 key areas. Financials, workforce, projects, products and Compliance. Many of what you had I agree are key metrics.

    Financial:
    • Month run rate of spend vs. the budget (trend for last few months)
    • Forecast through years end broken up into operational and project categories
    • Headcount vs Contractor/Vendor dollars

    Workforce:
    • # of Headcount vs.# Time and Material Contractors Vs. Strategic Partners (Vendors)
    • Ratio of headcount to business lines
    • Either things like secondment opportunities, promotions, etc or as the article suggest training and certifications

    Projects:
    • Spend vs. actual budget
    • Resources allocated over 100% (shows overallocation)
    • Project breakdown by status (Red, Yellow, Green indicators representing risk )
    • # of projects in each stage of the SDLC
    • Defect density ratio

    Customer Service:
    • Measure system and application uptime and data loads (did they meet SLA?)
    • Voice of the Customer responses/Feedback

    Compliance:
    • Remediation activities suggested but internal continuous improvement QA assessments
    • Formal corporate audits
    • Security or data breaches

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  • Dan Briner

    I would add a customer satisfaction measure or survey on every direct internal client contact. This metric is key in keeping the focus of our customer service staff on customer satisfaction.

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