How do I measure IT Performance?

1. How do I measure IT Performance? Chapter 9 MISY 300

2. What does performance mean to IT? • What does performance mean to business? • Why are these questions important? • Success of IT performance is critical to success and competitive positioning of the business. • Ability to effectively measure IT performance can safeguard against making uninformed strategic decisions. • Measurement is key to continued effective and efficient operation of IT

3. Measuring IT Performance: 2 Perspectives • External Customer • Speed: timely delivery of software • Cost: seeking the lowest cost provider • Quality: right functionality performing efficiently and effectively • Internal Customer • Same measures of IT performance but how measured depends on level of performance needed to satisfy business goals and objectives • Specific measures may vary depending on perspective • Cost of performance needs to be balanced with cost of running business

4. IT Value Contribution • IT Providers perform services • Effective and efficient operation of day-to-day systems • Enhancements to production software • Developing new software • Delivering technical responses to help business stay competitive • Maintain fiscally sound organizations • Are IT Providers providing business solutions that will have appropriate functionality and quality of data, and will the solutions be delivered on time and within budget?

5. Business Value of IT Measured based on • Value delivery: Does IT provide value that has a bottom-line impact on the business? • Development efficiency: Has the software been developed in a cost effective way? • Biggest expense in application development and maintenance is labor • Is the company getting the most out of the monies spent on labor?

6. Key Performance Measures • Cost • Quality • Duration • Customer satisfaction and • Size

7. Key Performance Measure: Cost • Mostly a measure of cost of labor • Also, cost of maintaining and supporting the portfolio of applications • Most effective way of measuring performance based on cost: • Evaluate the cost for each individual work products produced by IT • By assessing expenses at product or project level, firm can then look at outcomes specific to each unique development activity and determine which projects were most cost effective

8. Key Performance Measure: Quality • Quality: number of defects in product or application • Often measured during testing phase of development life cycle • Defect removal should be done throughout project life cycle, not just during testing • Defect removal efficiency • More effective performance measure • Measures the effectiveness of removing defects throughout the life cycle

9. Key Performance Measure: Duration • Measures how long it takes a team to define, design, develop and deploy a software solution • No standard definition of duration • Beginning of project: feasibility study is performed? project code first set up? • Whatever standard is used: make sure it is used across the organization consistently

10. Key Performance Measure: Customer Satisfaction • Need to include customer perspective • Most effective way of knowing how customers view IT performance: ASK THEM • Customer satisfaction survey • Most economical way to measure IT performance • Yet seldom done on a consistent basis • Best practices of using Customer Satisfaction survey: • Use third party organization to develop and conduct survey – reduces biases • Question set needs to be well thought-out with clear understanding of objectives of survey • IT providers must be willing to respond to the results of the survey • Level of IT performance should be measured at the project level

11. Key Performance Measure: Size • Size does matter! • Why? • A good sizing measure should be: • Meaningful to the IT Practitioner and to the user • Defined and recognized as a standard in industry • Consistent and follow a documented methodology • Easy to learn and apply • Accurate and statistically based • Available when needed early in the life cycle

12. A Successful Measurement Program • Need to establish and maintain a measurement program • How to best measure IT performance? • Consider the customer’s expectations • What aspect of their IT services to the customers value? • IT Providers have a fiscal responsibility to operate in an efficient manner • IT Providers are responsible for technology and innovation • Bring solution to business problems that will aid in the organization maintaining their competitive position