What business metrics should we measure to assess the performance of IT?

Wow, this is a big business question to ask of small business IT. Of course, it’s a great question to ask – but is your business really mature enough to be making these measurements and then reporting on them?

Congratulations if you are running at this level; it shows you’re really thinking about how to grow your business by making the right investments. Finding metrics that are relevant without creating a burden on reporting is the key here. The numbers need to be simple to collect, and clear in what they tell you. And, yes, you need the focus to be on business objectives, not technology functionality.

What do I mean by this? Well, for example, you don’t want to report on server uptime and storage capacity, or WAN performance and availability. Why? Because this rapidly leads to assessing costs and driving IT decisions based on a price reduction target and technology cost based budget – which is counter-productive.

It is much better to instead measure business objectives that appeal to executives, and get them thinking about enabling business outcomes with technology (at which point, the cost of the technology is less of an issue if the objectives are attained).

We, as IT people, need to be conscious of WHY decisions are made in business, and ensure we’re working to create good outcomes in business capability, improving margins through productivity and efficiency, and quality of service.

Possible metrics include:

• Alignment of IT plans to business plans.
• Business value of IT investments.
• Quality of service provided.
• Level of functionality of the business systems.

The IT department needs to move away from reporting operational facts, and instead translate these facts into something executives can comprehend – such as the ability to access information systems or the cost to establish new markets or geographies.

Essentially, when the business value of IT investments is properly understood, IT is budgeted based on benefit and future possibilities, rather than a limited and limiting budget. This is the growth mentality as opposed to the reactionary mentality, and it is key to pro-active business development associated with expansion.

The level of functionality of core business systems is the other consideration. If you’re spending money on applications, infrastructure and staff, and still cannot perform your core business effectively and efficiently, then it is essential to go back to square one and re-do the plan to empower the right selection of solution, platform and people.

Constant assessment of the outcomes of IT will pay dividends; not necessarily reducing your IT spend but by improving the output of your company. Do not be afraid to look outside your current support arrangements to assess your current position, and ensure you’re making the right investment in your future technology.

David Markus is the founder of Combo - the IT services company that ensures IT is never an impediment to growth.