By Hank Marquis
Measuring and reporting on IT efficiency and effectiveness is critical. The ITIL mentions Continuous Service Improvement Programs (CSIP), Goals, Critical Success Factors (CSFs) a.k.a. Key Success Factors, and Key Performance Indicators (KPIs) as the means to measure success.
A CSIP establishes goals based on business drivers and stakeholders. CSFs are important performance aspects of CSIP goals. KPIs measure CSFs to show achievement of CSIP objectives. Together CSFs and KPIs track IT performance.
The ITIL suggest dozens of KPIs, CobiT and ISO-20000 hundreds more. [See ‘Get Ready for ISO 20000 Certification’ DITY Vol. 2 #3 for more on ISO 20000.] However, every CSIP has unique KPI needs that require mixing people, process, and products into performance metrics, and then reporting on them in business terms. Called IT transparency, this is not an easy task.
Fortunately, there is an industry standard for creating effective KPI metrics linked to goals — the Goal Question Metric (GQM) method. GQM offers us a solution for creating transparent KPI metrics. Following we examine GQM.
Fundamentally, KPIs measure progress toward goals as reflected in CSFs. KPIs are then quantifiable measurements, or metrics. The Goal Question Metric (GQM) method arose from work done in software engineering. GQM derives metrics from questions about goals. GQM has some powerful benefits when applied to IT Service Management:
GQM requires no investment in tools or software. It is a participative and team-building program that helps drive values up and down the organization. GQM is useful in creating new KPIs, but it is also very useful in clarifying your existing KPIs. GQM is easiest to grasp when using a real example, so, here is an example, loosely based on examples in the ITIL:
This KPI needs clarification and is what I refer to as a “Dr. Feelgood” KPI -- it sounds nice, no one could argue with it, it seems to make sense and “fit” the CSF. However, how would you actually measure this KPI? To whom does it apply? What does it actually measure? It is almost impossible to determine the “who, what, when, where and why” given this KPI. This is where GQM is very powerful. GQM uses a standard form to define the metric and to whom or what it applies very precisely. GQM operates at three levels:
The five questions or parts of the GQM method are:
Let us use GQM to break down our (unclear) KPI into the required parts:
Table 1. GQM KPI Breakdown Form
Asking these five simple questions quickly shows that our potential KPI of “Percentage reduction in average time to respond to a call for assistance” is missing the key information that actually makes it useful:
You begin to see the value of GQM now. Using GQM we can clarify the potential KPI into a KPI that is actually useful. We have to go back and ask more questions in order to clarify the KPI. For example:
Table 2. GQM KPI Creation Form
We then re-write the KPI. Here is the original KPI and CSF:
Here is the clarified KPI and CSF:
You can clearly see the value of GQM now. Notice how much more clearly the re-written KPI now appears. Notice how it clearly indicates the “who, what, when, where and why” for the KPI. As an IT manager, you know what data to gather, and when, where and why to obtain the data. If you were the customer (or anyone else inside or outside of IT) you would know what the metric meant by simply reading it. This is an important concept in achieving the IT transparency required of IT/business alignment.
Also, notice that the clarified KPI only addresses a portion of the CSF! GQM will often result in many new KPIs. Now that we have re-written a KPI, you can also use GQM to create entirely new CSFs and KPIs from CSIP goals.
In either case, some basic guidelines apply:
One of the most difficult issues you face is to measure improvement from ITIL. The only way that works is transparency -- expressing IT results in business terms, linked to stakeholders. GQM makes this easy. GQM ties into the ITIL CSIP/CSF/KPI model very nicely, and provides a straightforward means to both identify improvement goals and measure their performance. You will also find that the GQM process itself helps identify process problems that you can address (and measure) using additional GQM derived KPIs! Finally, communicate the results of your clarified KPIs to IT and customers, this is a tangible step forward on the path toward Business/IT alignment.
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