IT KPI system

LEXTA can consolidate and intelligently link your IT key performance indicators (KPIs) to turn them into an effective management tool. A detailed system of IT KPIs is a prerequisite for efficient IT management, as it makes the following possible:

Planning, steering and monitoring of company objectives
Better recognition of potential
Earlier identification of risks
Provisioning and documenting information
Displaying interconnections and developments in their full complexity
Better planning for budgets

LEXTA helps you to construct a powerful IT KPI system from first principles. We can also utilise our expertise in IT benchmarking to review complete KPI systems against market standards and conventions, provide best-practice examples and even subject your high-level KPIs to benchmarking with the aim of identifying and evaluating problem areas.

Key indicator systems: benefits and requirements

The primary task for an IT KPI system is to ensure the efficient steering and monitoring of IT business activities within the enterprise. Some of the aspects covered include a systematic long-time analysis of the business, discovering dependencies and contexts between different performance indicators, and the resulting possibilities and/or risks for your business processes.

Although not obligatory, identifying your position in comparison to similar competitors in your markets is a useful option for increasing the precision of your KPIs still further. To achieve the benefits as mentioned, a KPI system has to exhibit a number of key qualities:

Scalable
The system of indicators must be able to be applied to business units of different sizes.
Capable of aggregation
It must be possible to consolidate the values obtained into meaningful key data for assessment.
Proof against falsification
To guarantee the highest levels of reliability and accountability, the values obtained must be as immutable as possible.
Targeted/steerable
The KPIs must be meaningful and chosen in relation to a specific target.
Available
To guarantee currency and relevance, the values in the KPI system should be available and accessible at all times.
Business-relevant
The development and implementation of an IT KPI system must also take business aspects and dimensions into account: the system is not an end in itself.

The LEXTA approach to developing an IT key indicator system

As with any product from the LEXTA CONSULTANTS GROUP, every project is different. The process is always adapted to the customer – and not the other way round. There are five phases that have been part of all our projects, however, although their importance will vary from customer to customer:

Status quo analysis and best-practice perspective

As to be expected, the first phase is mainly aimed at recording the status quo and the target status. A series of manager interviews and workshops are organised to identify the existing IT strategy, including any performance indicators already defined. In the course of these interviews, various needs for action are discovered in a parallel process, and best-practice approaches that have already been implemented in other companies are discussed as regards their applicability and quality.

Definition of Level 0 KPIs

In a second phase, the information collected to date is used to define around 20 to 30 of the most important key figures (depending on the company’s requirements). Each of these key figures is given the following attributes:

Addressee | Responsibilities | Data source and format | Measurement | Cycles

Once the KPIs – including their respective attributes – have been defined and agreed on, a preferred target range for each of the respective KPIs is then determined.

IT KPI system aggregation

Once the KPIs and targets have been defined as explained above, these then need to be consolidated into a useful system of KPIs. The definition of consolidation levels is central to this process. Once consolidation levels are known and agreed on, a tool is then used to visualise the KPI system for the management team.

Deriving recommendations for action

In the penultimate phase, the project team discusses the conclusions the client can draw in terms of IT governance, and the extent to which the best-practice approaches can be applied to the client’s situation and structures.

Once options for changing the governance system have been defined, discussed and specified, all of the results are classified in terms of cost/benefit ratios in order to prepare a final set of recommendations for action for IT management.

Identification of action choices

Ideally, the key indicator system so developed will directly identify the areas in the business where potential for the optimisation or restructuring of processes exists. This enables the identification of potential factors in the future that could, for example, then be more precisely defined in a follow-on project and – if required – implemented in the company by the management team.

We are also happy to offer workshops where we work together to identify the options and potential for your business in relation to IT performance indicator systems.

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