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How to Measure the Impact of Your IT Transformation

By Matt Denton

Matt_Photo1Generally when a company makes a decision to move in a new direction, a lot of analysis and rigor take place to ensure the decision is the right one. Business cases are created and vetted until everyone is in agreement and the project is approved. This is all great and necessary to kick off a new initiative. However, once the project is in motion, how often do we measure the results against the original business case to see if we are delivering on what the company expected?

Think about it. A project gets kicked off and everyone is heads down implementing the new changes and making sure they meet their deadlines. Going back to review a business case is usually not a priority and, quite frankly, who has the time? But at some point, senior leadership will ask for an analysis, and one will be created to meet that one-time request. Then, it is back to business as usual—until the next request comes along.

What if you could measure the impact IT transformation has on the business proactively and in real time? Projects become more meaningful. Employees can see how their work is impacting the business. Transformation begins to make sense and can be justified. This can be done if you take the time to generate key performance indicators and metrics ahead of time.

Start by asking the team these questions at the beginning of a project:

  1. Why are we doing this?
  2. What are we trying to improve?
  3. How will we measure it?
  4. What is our current state benchmark?
  5. What is our target?
  6. How will we impact the business if we reach our target state?
  7. Do we have data to measure progress?

What Metrics Matter Most?
Usually I see companies measure progress based on financial metrics. For example, did we save the company money? However, there are hundreds of metrics that relate to agility, cost, and quality. The key is to pick those that are most impactful to the processes you expect to improve as part of the transformation. These may not all be financially driven, but will still have a measurable impact on the business.

Below are some other areas where you can measure business impact:

  • IT financial management
  • Service level management
  • Demand management
  • Service desk management
  • Incident management
  • Problem management
  • Change management
  • Configuration management
  • Availability management
  • Continuity management
  • Release management
  • Capacity management
  • Security management

Some of the metrics that fall into these categories are what I refer to as the “hard to quantify” or “soft” benefits. These are generally thrown out or overlooked during the business case development. I believe that once you can quantify these, you can translate them into real benefits and measure their impact on the business.

Provided the data exists, I’ve been able to help many clients both track the metrics they decide to measure and demonstrate how they can show the impact IT transformation has on their company. By quantifying these metrics and showing the impact your improvements are making on the business, you will know at any given time if the changes you are undertaking are making a difference or if you are falling short of your expectations. And, you will also be able to identify if additional changes are required to meet the project’s objective.

Too often, I see clients lose focus on the reason they started a project. This is easy to do on long projects. People change roles, leadership changes, or other projects take priority. Putting metrics in place and understanding their impact on the business will help you maintain that focus. The qualitative data gathered during implementation and post implementation are important to measure the impact IT transformation has made on your business. The data you collect and analyze will begin to tell a story and allow you to make precise decisions on where additional improvements are needed to make the biggest impact.

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Matt Denton is a VMware transformation architect and is based in Wisconsin.