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Measuring Value in IT Service Management: A Practical Guide

Understanding and quantifying value is paramount in the ever-evolving landscape of IT Service Management (ITSM). Often, we gauge our ITSM performance using Key Performance Indicators (KPIs), which may or may not align with Service Level Agreements (SLAs). These KPIs traditionally revolve around IT operational metrics like incident resolution, system availability, and response times. While these metrics hold their significance, they don't always resonate as value in the eyes of our customers. Often, we fall short in adequately articulating the value we provide to them.

To truly deliver value, it's imperative to recognise that value varies from customer to customer. It is rarely a one-size-fits-all scenario; it can be unique and multifaceted.

Cost: Balancing the Budget

Cost considerations are nearly universal for customers, but it's a mistake to presume that every customer prioritises cost above all else. For instance, organisations like NASA, while budget-conscious, cannot compromise on quality, as it could lead to catastrophic consequences. To accurately measure costs, it's essential to establish a robust service catalogue as the core of your service delivery. This catalogue allows you to associate work with specific services, ultimately enabling the identification of the genuine cost of delivering your services. It doesn't necessarily entail tracking time spent on each ticket; sometimes, counting ticket numbers is a practical starting point. Of course, having the right tools that link all your services and Configuration Items (CIs) is crucial to determining true costs and value.

Quality: Pursuit of Excellence

Quality is a universal aspiration in ITSM, and for some, it reigns supreme. As mentioned, quality becomes paramount when lives or businesses are on the line. Measuring quality requires a two-fold approach: ensuring that the service is both "fit for purpose" and "fit for use." This means that the service should deliver the intended outcomes (fit for purpose) and be user-friendly and practical (fit for use). One could argue that the initial measure of a quality service is its suitability for both purpose and use. Surprisingly, this critical aspect of quality is often underemphasised. Measuring quality can be as simple as conducting an annual feedback survey that poses relevant questions to customers about the service and its delivery.

Speed: Racing Against Time

Speed can be of paramount importance to customers with urgent needs. Measuring speed may seem straightforward; response and resolution KPIs typically come to mind. However, it's essential to exercise caution and not merely chase numbers. A real-world example illustrates this: A service desk, meeting all KPIs with flying colours, received poor customer feedback. Upon investigation, it was revealed that teachers who needed their issues resolved promptly valued having their calls answered within ten seconds more than immediate issue resolution. The challenge was that all classes had breaks simultaneously, causing a surge in helpdesk calls.

To address this, several steps were taken:

  • Roster Optimization: Agents were scheduled to handle calls based on school terms and timetables, improving response times slightly.
  • Collaboration: Engaging in discussions with teachers and the department led to the realisation that reducing resolution times in some cases was not feasible. Instead, the focus shifted to answering calls promptly during school breaks. KPIs were adjusted accordingly during term breaks to adapt to changing business needs.

These simple changes improved customer feedback and a more satisfactory experience.

Price, Quality, and Speed: Finding the Balance

Recalling the ITIL adage that you can have only two out of three – price, quality, and speed – prompts the question: Is it possible to have all three? Here are some strategies to achieve this elusive balance:

Balance: Prioritising Customer Needs

Every customer's needs are unique. Consider a more nuanced approach instead of focusing on a rigid choice between price, quality, and speed. Determine what's essential to your specific customers and align your KPIs accordingly. This approach strives to deliver "cheap enough, good enough, and fast enough" to meet their distinct requirements.

Smarter: Embracing Automation and AI

In the era of AI and automation, simultaneously achieving quality, speed, and affordability is increasingly feasible. While perfection may not be attainable, automation offers consistency, a vital element in delivering quality and speed. As automation matures, it can be refined incrementally to enhance quality further. In due course, you will respond faster and more consistently and at a lower cost.

80/20 Rule: Emphasising Pragmatism

Perfection can often become a hindrance. Overly fixating on perfection can stall your progress. Embrace the 80/20 rule, which suggests that delivering 80% of what's needed is an excellent starting point. This pragmatic approach enables you to strike the right balance between price, quality, and speed without getting bogged down in perfectionism.

Measuring True Value: A Customer-Centric Approach

Accurate value measurement becomes more attainable and relevant when you deeply understand your customers' requirements and meticulously document your services. If you've missed this crucial step, you might measure your perception of what customers want rather than what they genuinely need to achieve their objectives. While KPIs remain valuable for measuring response and resolution times, they may not capture the alignment of your service with customer expectations (beyond response times).

Implementing feedback surveys, both online and in-person, can provide a more holistic perspective of the value your service delivers. Remember the importance of being "fit for purpose" and "fit for use" when assessing your service's value proposition.

Conclusion: Delivering Value That Matters

In IT Service Management, measuring value necessitates a customer-centric approach that transcends traditional KPIs. By comprehending your customers' unique needs, striving for a balance between cost, quality, and speed, and leveraging automation judiciously, you can provide services that meet their expectations. Remember, it's not solely about what you intend to deliver; it's about delivering what your customers require to thrive. In this customer-centric paradigm, value is defined by what matters most to those you serve.

Key Takeaways

  1. Tailor Your Metrics: Customise your KPIs to align with your customer’s needs and priorities rather than relying on one-size-fits-all metrics.
  2. Balancing Act: Striking the right balance between cost, quality, and speed is essential. Consider what's "cheap enough, good enough, and fast enough" for your customers.
  3. Automation for Consistency: Embrace automation and AI to maintain consistency in your service delivery, leading to faster responses and improved quality while managing costs.
  4. 80/20 Rule: Don't chase perfection; start by delivering what's vital and refine your services over time.
  5. Customer-Centric Measurement: Focus on customer-centric metrics, like being "fit for purpose" and "fit for use," to ensure your services align with customer expectations.
  6. Feedback Matters: Implement feedback surveys to understand how well your services meet customer needs and expectations.