Few employers say “No” to an investment if it has a high enough return on investment in a short enough timescale

It is important to explain the relationship between business performance and its IT service provided to the business by using an indicator that shows the result of the business.  

Business Performance Indicator is abbreviated to BPI. It is effectively a business level Key Performance Indicator (KPI) and given other names such as Metric of Interest or Service Quality Level.

 

• Take an inventory of the applications making up the IT service and classify those applications by business function.

• Prioritize the applications as classified by their business function.

 • Usage of each application classified by business function should be measured to establish

a baseline and the degree of usage can be identified compared with the priority.

It is effective to use application logs that are stored to close events on records if it is available. For instance, a Web application has an http log which includes the number of accesses and response time to each URL. This information can be used to analyze the usage of each business function.

 • This BPI must be an indicator that shows the result of a business function such as the

amount of revenue or profits, improvement rate of productivity or reduction rate of cost.

 • The BPI should have a time stamp to be able to compare the usage of application by business function in same time scale. The contribution to the business can be seen by correlating the BPI and the usage of the application.

• Unit costs of an application by usage, such as by each access or by each transaction, can

be calculated by dividing the degree of application usage into the total cost of the application
including the expenditure for development, maintenance and operation.

This brings the benefit of explaining how the application contributes to its business by comparing the total and unit cost with the results of the BPI.

This approach is achieved in Metron by using a ‘metrics matrix’ to develop the business drivers and BPI information needed, related SLA targets and constraints for each, which are then mapped into resource/component metrics to be measured and reported.

Few employers say “No” to an investment if it has a high enough return on investment in a short enough timescale.

 IT infrastructure may be thought of as being similar to a production line in the manufacturing industry.The product of IT infrastructure is IT service. The production line must have a capability to produce competitive products with expected quality. Investment in the IT infrastructure must be made to adopt the demands by improving and expanding its capabilities associated with business plan and strategy.

If the IT service currently provided is not being used at the expected usage level, we should consider whether the IT service can be disposed of because there is little value from the IT service. By doing this, we can reduce the fixed expenses for maintenance of the IT service and we can also apply the resource and staff spent on the IT service to other IT services.

 It is important to improve the productivity and skill of IT staff engaged in providing the IT services.

 We have to redistribute human resource to the right place, where they can display their ability based on the productivity. All of which can be maximized by outsourcing or in-sourcing.

The capacity planner should be trained or hired in the company.

We should not outsource this management process because it is best done by people who know the business and culture of the company and have an ability to communicate with users at LOB. They can explain the validity of an IT investment to employers as decision makers by using the information of how much the IT service contributes to its business. Of course, that does not preclude using consultants to act.

On Wednesday we’ll look at the interactive reports and analyses you should be producing.

Adam Grummitt

Distinguished Engineer and Author ‘Capacity Management – A Practitioner Guide’

http://www.itgovernance.co.uk/products/3077

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