The “Performance Management for IT” landscape
I have been working in the “Performance Management for IT” space for over 20 years and have been actively involved in IT4IT for several years. In my opinion, the combination of the two, performance management and IT4IT, is really what should drive IT transformation projects.
Performance Management is all about setting business goals, determining critical success factors and picking the right key performance indicators/measurements for the different personas in your organization.
The key goal is to pick the business goals most important for your organization to improve on. Let’s say “IT Transformation”. From there you cascade downwards to the critical success factors for the different areas that will have an impact on those business goal(s).
IT4IT Value Chain
For example, you can pick critical success factors for the IT processes within IT Operations. Cascading one more level downwards will describe the KPIs/measurement for a specific area or process (e.g. incident, change, or service level management).
IT4IT is a prescriptive reference model for IT Service Lifecycles. The IT services in a value chain go through 4 different value streams and describe the data required for managing and monitoring the IT services through its lifecycle.
Below you see a picture of the value chain and its four value streams. Every value stream has its own data points that should match with the measurements and or KPIs.
KPI tree Structure; combining performance management and IT4IT
Combining the principles of performance management and IT4IT will give you a KPI Tree Structure like the one shown below. At the top level of the KPI tree, you will have IT Transformation as your business goal. This is the end goal that you want to improve on; in the sense of: it should make IT services cheaper, better, faster and safer.
To measure and to guide your organization in improving at the highest level, you will break it down into value streams. The critical success factors are “improve on the four value streams and you will improve on your IT Transformation goals”. Drilling down another level from there will lead you to define the relevant KPIs for the different IT processes within a value stream.
For example, all the ITSM processes that reside in the Detect to Correct value stream.
The image below drills down a little further int the KPIs for the Incident Management process.
The KPI Tree above is not complete and finished at all! And I did that on purpose.
First, it is most important just to start your IT Transformation journey. That could be anywhere in the value chain, if you understand how it should fit in the overall tree structure. Further, the Performance Management process is never finished. It is a dynamic process that should be embedded in your organization.
It requires governance, quality control, actionable intelligence, etc. Every KPI will have its owner responsible for improvements, who will set out actions in the organization or add new KPIs to keep improving at higher levels in the KPI Tree.
Performance Management and IT4IT should go hand-in-hand during an IT Transformation project.
Improving on your IT Transformation process can start anywhere in the journey if you have a core team available that aligns the deliveries (for examples Dashboard for Detect to Correct) with the overall structure for improving your IT Transformation services.
In another article I will discuss how to start, organize and manage a performance management project.