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IT Operations Management Scenario: Improving Your IT Business Through Metrics

Donna Scott

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Level 3 (proactive) is the minimum acceptable goal; otherwise, costs are too

high and quality and agility are too low.

Low I&O Maturity Shows Most IT Organizations Struggling to Transform

With nearly 250 complete self-assessments (and 500 on at least one dimension), average I&O maturity is 2.25 on a scale of 5

0

10

20

30

40

50

60

0-Survival 1-Awareness 2-Committed 3-Proactive 4-Service-Aligned 5-Business Partner

People Process Technology Business Mgmt. Overall I&O Maturity

Key Issues

1. What key trends are impacting IT operations management strategies, investments and actions?

2. How should metrics be used to drive transparency in selecting and implementing both tactical and strategic improvement projects?

3. How can the Gartner I&O Maturity Model be used to create a road map toward business alignment?

Key Issues

1. What key trends are impacting IT operations management strategies, investments and actions?

2. How should metrics be used to drive transparency in selecting and implementing both tactical and strategic improvement projects?

3. How can the Gartner I&O Maturity Model be used to create a road map toward business alignment?

CIO Strategies Reflect the Need to Reduce Cost and Improve Performance

*Item not included this year

Economy Leading to Belt Tightening

• Shift to more shorter-term projects

• Vendor, tool andinfrastructure consolidation

• Asset managementvisibility, utilization

• Shared services and centralization (focusing on efficiencies)

• Mandates to cut costs• Focus on cost analysis —

where are we spending?• Outsourcing, cloud and

SaaS as a means to reduce capital expenditure

At the same time, the business cost of downtime is rising, and the proportion of applications considered mission-critical

averages 20% to 30%!

IT Budget

Polling Question

Are your F2010 IT budgets:

• Same as for FY2009

• Up by 1-5% from FY2009

• Up by more than 5% from FY2009

• Down 1-5% from FY 2009

• Down more than 5% from FY2009

Technology and IT Operations Architecture Trends

• More data center and infrastructure consolidationand virtualization

• Virtualization creating greater interest in RTI

• Legacy lives on, but may be contained or wrapped

• Politics prevents widespread standardization

• Cloud hype threatens IT budgets and control

• Hardware and software market consolidation and vertical integration lead to more competition wrestling for control of your architectures

Technology

• Tool spending reflects visibility, but to a lesser extent, control

• Promises of IT transformation are taking a back seat to immediate goals of cost optimization, increasing quality or reducing risk

• CMDB, service catalog, BSM and capacity management are all advancing at a slow pace, primarily due to maturity readiness and organizational commitment

• Lack of IT service cost accounting and chargeback, making it hard for IT to drive business demand and behavior, and make optimization decisions

IT Operations Architecture

Key Issues

1. What key trends are impacting IT operations management strategies, investments and actions?

2. How should metrics be used to drive transparency in selecting and implementing both tactical and strategic improvement projects?

3. How can the Gartner I&O Maturity Model be used to create a road map toward business alignment?

Assess for Success

Changes Availability SLAs Terabytes

Processes Room K Services Projects

FTEs Budget Utilization OLAIncidents

Know what to measure; use methodologies to assist

What Is the Business Value of IT Operations and Infrastructure?

IT Infrastructure ValueInnovation value of the IT system that enables the business

IT System Business Value

ProfitRevenue ROICustomer Satisfaction

Employee Productivity

Shareholder Value

IT Operations Value

The amount of enhanced business

value through increased quality of

the IT system

The annual contribution to the

bottom line through cost reductions (i.e., increased

productivity, optimization)

The contribution to IT infrastructure value through IT

system innovation

Opportunity costs by not having IT

systems (and not achieving business

value)

Increase Your Confidence by Bridging Business, IT Service and Process MetricsBusiness Metrics IT Service Metrics Process/Runtime Metrics

• Cost• Productivity• Cycle time• Agility• Revenue• Expenses • Resource use • Customer

satisfaction

• Cycle time• Cost• Quality (availability,

MTRS, response time)

• RTO/RPO• Customer satisfaction• Project success rates• Benchmarking

• Frequency of outages • Changes causing

outages • Emergency change

proportion • Platform and component• Software usage• Efficiency• Cycle time

Metrics: Design Points

• Tailor to your audience and goals• Compare actual metrics to the expected results

(planned, budgeted, SLA, etc.)• Use metrics to drive actions (i.e., improvement)• Show trends• Use visuals (a picture is worth a thousand

words) plus commentary• Communicate consistently• Continuously look for improvement

opportunities

Advertise Your Accomplishments! Show the Business Value of IT

Executive Dashboard: Make it VisualWith Drill-Down

Performance to competition

67%Demand to capacity

Customer satisfaction

Aggregated SLA achievement

99.95%Availability

38% Revenue: Proportion Web channel

Service Financials People

-0.5%FTE to actual

-5%Chargeback to actual cost

-2%Desktop service unit cost trend

+15%Strategic Project X —budget to actual

+5%Capex —budget to actual

-1%Opex —budget to actual

85%Employee satisfaction

22%Management-to-staff ratio

+10%Employee turnover, planned to actual

12%Open req. to head count

72%Ratio of FTEs to contractors

Staffing benchmark analysis

Assessment and Action Plan Example: Service Quality LackingCustomer RequirementReduce average unplanned ERP system downtime of four hours per month by 50%:1. Assess performance (e.g., best-in-class IT service availability is five

hours of downtime per year, versus 48 hours per year)2. Assess the causes of downtime3. Assess infrastructure, applications and IT operations

architecture/design for risks4. Put together an action plan with ROI and get funding:

• Rearchitect • Incident management• Change management• Proactive monitoring• Release and configuration management

5. Implement, monitor, report and evaluate

Key Issues

1. What key trends are impacting IT operations management strategies, investments and actions?

2. How should metrics be used to drive transparency in selecting and implementing both tactical and strategic improvement projects?

3. How can the Gartner I&O Maturity Model be used to create a road map toward business alignment?

The Road to I&O Maturity: Invest in Projects That Contribute to Long Term Vision

0

1

2

3

45 Business Partner

Committed

Awareness

Survival

Service-Aligned

Proactive

Each Step Along the Way Represents Increased Business Value

PeoplePeopleProcessProcess Business

ManagementBusiness

Management

TechnologyTechnology

Visibility

Customer satisfaction

Quality, agility, cost

Trusted IT service provider; run IT as a business

Innovation

What Decisions Can You Makeat Each Level?

How can I reduce the unit cost of IT service delivery?

What causes IT service downtime and where should I be investing in to improve it?

What files have not been backed up?

What component outages occurred?

What projects are under way and what are

their statuses?

What end-user support issueshave yet to be resolved?

What end-user devices have not been patched?

What outages were prevented from occurring?

How can we be more efficient in servicing end users?

What is the impact of a component change

to the IT service?

How did we perform to SLAs?

How can I further automate, integrate and optimize IT service delivery?

What is the business forecast for IT service

demand? What is the business

value of IT?

What are my assets?

What new roles and skillsare required?

What is the ROI of emerging

technologies?

How can I optimizebusiness process

performance?

What is the responsetime for my critical

applications?

1 5

Elapsed Time and Effort Are Greater Between Levels 2, 3 and 4

Proactive

Service-Aligned

BusinessPartnership

Survival

Critical Success Factors:

Committed

Awareness

Resources and Effort

Time

• Senior management commitment• Persistence and patience• Culture of continuous improvement• Staffing perform while transforming• Funding• New metrics

01

2

3

4

5

Moving From Level 2 to Level 3 in Process

• Reduce time from event to incident• Restore +90% service outages at

Level 1; increase staff efficiencies, reduce costs

• Reduce business downtime

Implement command center and underlying instrumentation and run book procedure

• Foundation for improving the process and driving behavior

• Reduce business downtime• Reduce cost through standard

process and automation• Identify costs and times for

optimization opportunities

Implement OLAs for all defined processes such as for change management tracking and trending: change requests implemented, outage time caused by changes, emergency changes and average workstation MAC time

• Customer alignment; set expectations

• Basis for goal setting, performance evaluation and improvement actions

Implement target SLAs for IT service availability, MTRS and transaction response time (if applicable); design and implement measuring process

Investment Benefits

Costs

Customer Satisfaction and Recognition of Business

ValueBusiness Service

Availability

AgilityBusiness Alignment and

Integration

Efficiency

Maturity Level

Maturity Value

1 2 3 4 5

Maturity Investments and Return: You Must Spend Money to Save and Improve

Polling Question

What is your primary driver in investing in I&O maturity towardsservice and operational excellence?

• Business service availability

• Efficiencies/service cost reductions

• Customer satisfaction

• Agility/speed of service delivery

• Better decision making

RecommendationsYou can't manage what you can't measure: Implementmetrics to evaluate your performance, considering the audience and goals.Assess your process maturity. Use the IT I&O Maturity Model to plot a course toward the service-aligned level and beyond:- Become a valued, trusted service provider.- Use metrics to baseline and assess results.- Continuously optimize.- Do long-range planning. This keeps new technologies,

architectures and so on from being surprises and from threatening IT service delivery and trusted-partner status.

Develop an IT operations management architecture that defines roles, processes, integration points and tools/technologies.

Related Gartner ResearchThe Current State of IT Infrastructure and Operations Maturity: Immature!

Organizing and Measuring IT Infrastructure & Operations

Toolkit: Maturity Assessment for Infrastructure and Operations

Toolkit: IT Change Management Policy Guide, 2009

Defining Metrics for the CMDB

Q&A for IT Service Desk Metrics

The Future of IT Operations Management Suites

Automation: A Taxonomy

Notes accompany this presentation. Please select Notes Page view.These materials can be reproduced only with written approval from Gartner. Such approvals must be requested via e-mail: vendor.relations@gartner.com. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

IT Operations Management Scenario: Improving Your IT Business Through Metrics

Donna Scott

Notes accompany this presentation. Please select Notes Page view.These materials can be reproduced only with written approval from Gartner. Such approvals must be requested via e-mail: vendor.relations@gartner.com. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

IT Operations Management Scenario: Improving Your IT Business Through Metrics

Donna Scott

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