IT Metrics Video
The IT department should focus on areas that both IT and business users perceive as underperforming.
There are a lot of myths about metrics. For instance, some folks think creating metrics and collecting data are time-wasting exercises that take people away from real work just to keep the suits happy. But consider this: If the suits aren't happy, they'll be reluctant to give you any money.
At a recent conference Allan Hackney, CIO of John Hancock Financial Services, clearly illustrated how metrics can help illustrate IT's value to the rest of an organization, saying:
Unless you can prove there is productivity improvement and expense it, you don't get the bucks, never mind about trying to grow the top line or create capability.
Another myth about metrics is they are for fuddy-duddies. Startups don't need metrics; they run their businesses on endless streams of Red Bull, innovation and intuition. Right?
I have to confess, I always kind of thought so. In my experience, companies don't start talking about metrics until they are pretty well established and often then at the urging of outside advisors.
But that's not true of all startups. In an interview with Knowledge@Wharton, Zynga Co-founder Andrew Trader, now an entrepreneur-in-residence at venture capital firm Maveron, says being metrics-driven was Zynga's most important corporate value. He says:
For Zynga, that meant if you can't measure something, don't build it. If you couldn't measure the results, don't try it. Because how do you know it's working? How do you know it isn't? Especially in the early days, it was hard to be true to that value. But what it did was it instilled in our culture, in our company's DNA, a real significant emphasis on metrics.
It's tough to adopt a metrics-driven focus if it's not there from the beginning, says Trader:
I hear this all the time from companies. They've got eight people, 12 people, 25 people, and they say, "You know, we're thinking about hiring an analytics person." And then I say, "Well, it's too late. If that wasn't in the fabric of your DNA from the outset, it's really, really hard to try to backfill that."
Trader says the entire Zynga team, not just executives, focused on metrics and transparency. It helped Zynga "innovate quickly, test things really, really aggressively, and ultimately, kind of dominate this space. ... "
While innovation is important, execution is what sets winners apart from also-rans. And metrics certainly help with execution. Zynga launched the third poker game-not the first-on Facebook. Says Trader:
It wasn't about being early. It wasn't about being in the right place at the right time. ... But it took great execution and understanding of both the viral piece of it, and innovating around the social elements. Every step of the way, every incremental improvement was always about testing, analyzing, optimizing, repeating. It almost sounds cliched, but it comes down to execution always. Once you get the strategy generally right, it's about who can execute against their plan better.
Mark Tauschek, director of IT research for Info-Tech Research Group, echoed this view when he spoke about the importance of IT metrics at the Midmarket CIO Forum in November. One of the benefits of IT metrics, he said, was helping IT teams improve and establish a culture of continuous improvement. Tauschek also offered some great advice for starting a metrics program:
Trader also discusses the key metrics used at Zynga. He emphasizes the importance of matching metrics with priorities, noting that metrics may need to shift as priorities do.