Measuring IT's Business Benefit

Ann All spoke with Marina Stedman, director of marketing for Touchpaper, a provider of IT Business Management (ITBM) solutions, encompassing IT service management, customer service solutions and network and systems management.

All: Touchpaper says that not enough organizations are using KPIs to help illustrate IT's value to the business. Why aren't more organizations using them?
Stedman: An independent survey of 100 CIOs conducted by Vanson Bourne on behalf of Touchpaper measured the role of KPIs. The survey found that while IT plays a central role in supporting today’s businesses, only 40 percent of enterprises measured IT’s contribution to business success with KPIs. The survey concluded that organizations today are still failing to set measurable goals, and this is severely impacting their ability to optimize value from their IT infrastructure.

One of the main challenges faced by IT organizations is the ability to identify, define and measure which areas of the business are materially benefiting from IT, and by how much. We suggest utilizing KPIs to measure ROI from IT programs and activities. The KPI process, however, starts with an understanding of business objectives and how IT can support those objectives. IT requirements, activities and programs can then be prioritized to achieve maximum organizational benefit. With clearer focus, benefits can be delivered in a quicker and more efficient way.

Organizations also need to put tracking metrics and evaluation techniques in place to ensure that results are communicated to relevant stakeholders throughout the enterprise, in an appropriate and timely manner. Lastly, CIOs and their management teams need to become more familiar with business language and concepts and be comfortable holding discussions with key decision makers about how IT can support the organization’s business objectives.

All: Touchpaper recently created a five-stage methodology it calls ITBM in an effort to help organizations align their IT service management processes with broader business objectives. Can you briefly walk us through how ITBM is intended to work?
Stedman: A key issue highlighted by the research was that while every organization would like to use IT to maximize its operational potential and to enable it to provide the highest levels of service to its internal and external customers, each organization progresses at different rates according to its own priorities and goals and maturity of the IT function. The ITBM Maturity Model therefore provides customers with a real-life, practical roadmap that enables them to understand where they are within their own IT lifecycle and creates a template for them to develop an infrastructure that maximizes their contribution to the organization and its employees, customers and citizens. It takes into account both their stage in the lifecycle and their specific goals and objectives.

Achievement and progress against these goals is measured through tailored KPIs, which are inherently linked to the service management tools and processes used to deliver IT services. They are then tracked using best-of-breed reporting tools such as BusinessObjects’ Crystal Reports, Microsoft Excel, Microsoft Office PerformancePoint Server, Oracle’s Business Intelligence (BI) Applications, or Touchpaper ManagementInformation tools.

The ITBM Maturity Model takes an organization through a journey over five defined stages, each with identified organizational goals for the provision of service management, whether for internal customers (employees) or external customers. Touchpaper has deliberately chosen to split the model into five stages because many studies have shown this to be the optimum number of steps or stages that people can comfortably understand and remember. Think about the fact that our brains are geared to interpret five senses — sight, hearing, smell, touch and/or taste — that we have five fingers on each hand, and that we are always taught to put no more than five bullets on a presentation slide.

The ITBM Maturity Model provides a set of achievable and tangible solution and service deliverables that can be tracked and measured over a period of time. Each of the five stages has a set of organizational challenges and goals that are typically faced within that particular stage of the model, plus a group of KPIs or measures that can be implemented to track and measure results and a solution set, consisting of products and services that are designed to help deliver the stage goals and measurement tools.

All: Touchpaper has chosen to incorporate some elements of best practices methodologies into ITBM, including ITIL, COBIT and CMMi. Why?
Stedman: When developing the ITBM Maturity Model, Touchpaper identified several frameworks, guidelines, methods and best practices that can be used to improve and help manage IT services that are, on the whole, complementary. Rather than defining a new set, the Touchpaper ITBM Maturity Model uses these as the foundation for its five stages, allowing organizations to choose which elements to encompass in their journey to service management optimization.

For example, while ITIL provides a detailed, well-established and mature process model for IT Service Management, it lacks step-by-step guidance on who, how or where it should be implemented. Touchpaper’s ITBM Maturity Model complements ITIL with a combination of software, processes and services to address the service management needs of any size and type of organization, and it clearly establishes tangible steps, solutions and service deliverables. This practical approach allows organizations to benefit from a solution that utilizes the best practices of other maturity models, but that can be tailored to their needs. It can then be implemented in stages, according to their own timetable and stage of evolution, and includes proven methods of delivery and measurement. It therefore facilitates clear tracking and measurement of value on a continuous basis, unlike many best practices or other maturity models that are used on their own.

One thing the ITIL third version will address, which is consistent with Touchpaper’s ITBM Maturity Model, is the role of KPIs in the IT department, adding metrics and benchmarks to help organizations gain better visibility into how this can impact their return on investment. Ultimately, it’s up to the individual organization to decide the correct course of action and to put in place the necessary processes and activities to ensure that all requests and requirements are recorded and classified.

The Software Engineering Institute’s (SEI) Capability Maturity Model for Software (CMMi), the de facto model for comparing software development processes to best practices, describes the characteristics of effective processes and gives guidance on how to enable informed leadership, delivering services and managing, measuring and monitoring development processes. But again, it doesn’t have an established mechanism for delivery.

COBIT is one of the most important complementary standards to ITIL, originally released as an IT process and control framework that links IT to business requirements. It is often referred to as the “Integrator,” introducing models for IT processes and tasks that include check points and security points. While an implementation of COBIT ensures that people can’t circumvent steps in a process, or proceed to the next step without authority or proof of meeting some kind of criteria, it focuses on what an enterprise needs to do rather than on how it needs to do it.

All: Your research has shown there are differences in how companies measure their internal and external service environments. Can you elaborate?
Stedman: Interestingly, Touchpaper’s research has highlighted that there has been much less focus on the development and adoption of industry-led best practices and standards within departments and organizations that are focused on delivering external customer service, compared to internal service desk operations. That has been confirmed in discussions with Gartner. The ITBM Maturity Model encompasses service delivery for both internal and external users, so it can help identify opportunities to raise service levels and address organizational and regulatory compliance requirements within both customer service and internal service environments.