Kicking the KPI Habit
We habitually use key performance indicators (KPIs) in IT, even when they are not relevant. But how does this affect the IT and the customer’s business…and can we kick the habit?
Following the herd
Our instincts are based on deeply engrained responses to situations. These reactions have often formed over our lifetime and, according to some scientists, “once the neurology of a habit is set, it is always there in some form or another” (Charles Duhigg, author of The Power of Habit: Why We do What We do in Life and Business)
Tried and trusted
When top IT executives move jobs, you can almost guarantee they will apply a similar approach in their new organisation – in my experience, particularly with IT Service Management (ITSM). That’s no surprise, particularly if they are employed to make a difference and because of their track record. But 20 years later, are their tried and trusted methods still relevant? They may have tweaked their game to reflect some new advances, but all too often the same old ITIL processes and KPIs just get cut and pasted to a different company logo.
Meanwhile, companies are busy doing just the opposite – forgetting experience and jumping directly into the latest technology.
Let’s focus on ITSM
Sometimes we focus on the wrong things because of the metrics we are using. Some of the most prevalent activities in ITSM revolve around the “service desk” – an industry obsession. A cartload of software providers cater to the service desk. It has its own Big Data and Analytics. We are even involving Artificial Intelligence and Machine Learning.
But the standard KPIs I see around the world measure the volume of incidents recorded, number of incidents closed within Service Level Agreement (SLA) targets, and so on.
WHY? We now have the technology to identify and rectify failures before the customer even knows about it and raises a problem. Yet we struggle to find budget for such things, preferring to invest in greater analytics for these internal-facing KPIs… Surely, this is one habit we need to break!
Effectiveness “v” efficiency
If your business is making cans of beans, you know that if the production line stops, the business suffers. If you can optimise the process to produce more cans of beans per hour, the business should thrive. But this is the first flaw in our instinctive assumptions. The business will only thrive if there is demand for the extra cans of beans. If not, we will just over produce. But still, we often focus on the optimisation of production rather than the true customer need. In my experience, over-optimisation of IT to support these efficiency-based KPIs always leads to systemic waste.
If you can’t measure it, you can’t manage it
“If you can’t measure it, you can’t manage it” – a maxim I was told by an engineer at the start of my IT career.
On the plus side, a culture of measurements and improvements in IT has helped many organisations to improve service provision, drive quality improvements and manage costs.
But this idea often drives us to re-use what we know and not investigate anything else. More intangible things that were impossible to measure many years ago can now be measured – things like the true customer experience. We should not ignore it!
KPIs for the sake of them
Like children with a new toy we try to show our KPIs to as many people as possible, even if they are not interested. They are forced on various parts of the organisation (and even the customers) – despite being totally meaningless to them. To make matters worse, we wrap them up in documents called Service Level Agreements (SLAs)! But this annoys many a modern business, giving the impression that our IT is not relevant.
The Weekly / Monthly report / Dashboard
We drill KPIs into our organisations and religiously report on them. We produce IT KPI reports and expect everyone to use them. We have IT dashboards and spend fortunes setting them up and having teams manage them; sometimes we even go as far as having widescreen TVs showing the KPIs. So, what is the impact of this? Do the KPIs get used? Are the reports read and acted upon? Sadly, often not, but still we persist.
So, can we kick the habit?
As with any addiction, change is hard and will almost certainly require external help. Perhaps you could use consultants, or people within your organisation who do not need that KPI fix. You’ll also need a support network of individuals to stop you lapsing (your governance organisation, for example).
What started out as kicking a KPI habit has suddenly become much bigger and more complex. It includes changes to operating models, changes to governance, different styles of engagement with the business, and managing suppliers against contracts. This is not just “fiddling about” with existing IT ways of working and KPIs. It’s a completely different outlook.
But with the right advice and guidance, you too can kick your KPI habit. And Virtual Clarity is here to help. I will also be presenting more on this subject with David D'Agostino of NexThink at the UK ITSMF annual general conference on the 20th November.