Most organizations monitor the wrong KPIs simply because they are KPIs that existing IT systems provide. Measuring the wrong KPIs has an adverse effect on business performance by changing behaviour away from the objectives of the business. Organizations that look to define KPIs that more appropriately measure business value soon realise that the metrics necessary to produce these KPIs are not readily available and require new processes, new IT systems, and very often cultural change, in order to collect. This approach delays an assessment of business health, increases the cost of producing the KPIs, and ultimately leads to frustration from executives who want this information instantly and on demand.
ServiceClarity solves this conundrum with a surprisingly simple approach: ServiceClarity monitors business value KPIs that can be derived from readily available metrics, translating them through clever KPI formulae into a unique KPI library.
The ServiceClarity KPI Library meets the two key constraints of business performance measurement:
- Monitoring KPIs the business wants – comparing the cost and value of revenue-generating business services and cost-centre services
- Utilising metrics the business collects – extracting available metrics from the IT systems you use
Monitoring KPIs the Business Wants
Fundamentally, all businesses want to reduce cost and increase value. Considering cost without value prohibits strategic investment. Considering value without cost reduces profit. ServiceClarity measures both Cost KPIs and Value KPIs from the same underlying metrics so that the relationship between both concerns can be understood, evaluated and optimised.
For both Cost KPIs and Value KPIs the ServiceClarity KPI Library follows the guiding principles outlined below.
Cost KPI Principles
- Cost is relative to scale – larger organizations obviously spend more than smaller organisations, but their efficiency can be evaluated by comparing total cost to the scale of operations. E.g. cost per business service, support cost per user, cost per incident
- Costs fluctuate – on a day-to-day basis, costs fluctuate in line with unplanned events and strategic project rollouts. While daily cost metrics influence operational decisions, rolling averages over months and years are required to improve long term efficiency.
E.g. daily cost per incident vs yearly cost per incident
- Labour is the biggest cost – as labour accounts for 70% of operational overhead, considering only hardware and software costs ignores the key cost driver. Most organisations don’t accurately track staff time so ServiceClarity extracts time tracked in Service Desks to extrapolate the division of labour costs across services and projects.
E.g. operation cost per service, labour cost per project
Utilising Metrics the Business Collects
The richest source of metrics in any large organization is the Service Desk that records Service Requests, Incidents, Problems and Change Requests. On their own, Service Desk metrics do not provide the full picture. ServiceClarity combines Service Desk metrics with key Financial Metrics and correlates the result against the definition of revenue-generating services and cost centre services maintained in the ServiceClarity Service Catalogue
ServiceClarity integrates with and provides out-of-the-box KPIs for a broad range of Service Desks, CRMs and Monitoring Tools.
Value KPI Principles
- Organisations ranks values differently – all businesses share common values, but place different emphasis on each. The ServiceClarity KPI Library defines standard value KPIs that organisations can weight in line with core business values.
E.g. agility, customer service, security, risk
- Value comes from services not assets – in a world defined by services, it is the perceived value of service to end-users, that is important, not the IT assets that enable service delivery
E.g. % customers satisfied, % SLAs met, % project objectives met
- Maximum service performance does not mean Value – increasing service performance regardless of cost leads to diminishing value. ServiceClarity enables business leaders to benchmark KPIs against industry standards and fine-tune KPI targets for their business. Monitoring business value KPIs against the organization’s individual targets informs optimization of the entire business.
E.g. optimal resource utilization, optimal budget allocation to R&D
For more information on the types of reports and KPIs ServiceClarity can measure view our top 10 JIRA reports. ServiceClarity integrates out-of-the-box with a broad range of cloud services including JIRA, ServiceNow®, Amazon Web Services, Pingdom and many more.