Date post: | 22-Nov-2014 |
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The Metrics Monster
A hi i VOI d ROI th h Achieving VOI and ROI through Effective Metrics
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Agenda
The Metrics MonsterU i th 7 St Using the 7-Step Improvement Process to Achieve VOI and ROI
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The Metrics Monster
The issues that arise when we use measurements and metrics to drive behavior instead of usingand metrics to drive behavior instead of using
metrics to achieve VOI and ROI
Letting only financial goals drive our desire for VOI and ROI, instead of seeing gthe results of ITSM
VOI = Value on Investment = warm fuzziesROI = Return on Investment = cold facts
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ROI = Return on Investment = cold facts
The Metrics Monster
The disconnect that results from reverse engineering IT Services from a set of measurements and metricsIT Services from a set of measurements and metrics
Building from the bottom up Building from the bottom up, without top down designIdentifying processes and Identifying processes and technologies as services
You cannot deliver “Change gManagement” like a product
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What should you measure?
Focus first on the customer and their needs (i.e. IT Services)
Identify your customer or market segments
Services)
market segmentsGather customer requirements for services they desirefor services they desireIdentify quantifiable aspects of the requirements by breaking the requirements by breaking down the requirements into more granular pieces.
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g p
What should you measure?
Gather requirements like you would for any other q y yneeds
Build measurements and metrics based on the metrics based on the most granular pieces Aggregate together to gg g gfind meaningful points to baseline
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What can you measure?
Validate the measurements and the metrics
What will they do with the information and knowledge you will provide to them?How will they use the information to see VOI and ROI?
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Gather the data
Using various outputs, gather only the data needed to fulfill the measurements
L k i ll S i
to fulfill the measurements
Look in all your Service Management toolsDifferentiate between Differentiate between data and information
Do not waste time collecting unusable or i t t i f ti
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unimportant information
Process the data
Identify the “currency” that your customers use
Translate dollars into hours or hours into dollars
40 FTE Hours * $100= $4000Slice and dice
Excel is your friendPivot tablesHi tHistogramsStatistical tools
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Analyze the data
Analyze the information using proven statistical, analysis and critical thinking methods and techniques
ROI Calculator
and critical thinking methods and techniques
Control chartsAdvanced Statistical toolsBrain power
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ROI Worksheet: Fewer IT Service OutagesFewer IT Service Outages
outages per month_____ outages per monthAverage outage: _____ minutesAverage users impacted: g p _______Average user rate: $_______/hourOutage costs = $________/minuteOutage costs = $________/hourOutage costs = $_________/month
Reduce by 20% = $________/monthReduce by 35% = $________/month
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Reduce by 50% = $________/month
Sample ROI: Fewer IT Service OutagesFewer IT Service Outages
10 t th A l 10 outages per monthAverage outage: 15 minutesAverage users impacted: 100
Annual Cost: 120 Average users impacted: 100
Average user rate: $50/hourOutage costs: $83/minute
120 Outages x .25 hours Outage costs: $83/minute
Outage costs: $5,000/hourOutage costs: $12,500/month
x 100 users x $50
Reduce by 50%: $6,250/monthx $50 hourly= $150,000
At 1000 I t d U $1 5M
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At 1000 Impacted Users: $1.5M
Present the data
Translate the analysis into meaningful pieces of information and knowledge
Understand how your customers
information and knowledge
yintend to use the information and knowledge Use their language
0%, 50%, 100% OptionsRecommended solution
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Take action
Be willing to throw out measurements and metrics if the customer sees no value in them
Follow up on the chosen recommendation
the customer sees no value in them
recommendationBegin a projectIdentify accountable individualsIdentify accountable individualsIdentify funding
Begin the cycle againBegin the cycle again
Remember: Metrics are the results and the goal not the beginning
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the goal, not the beginning
Questions??
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