CXO

Five hidden metrics CIOs should track

Don't overlook opportunities to measure costs and intelligence that might be beneficial when setting the IT department's performance goals.

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Image: lev dolgachov

Pat Riley, who coached the Los Angeles Lakers championship teams in the 1980s, once said that he tracked some uncommon statistics during a game. While points scored, shots blocked, and assists mattered, Riley also had people assembling "effort indexes" that counted how many times a particular player went for a rebound, whether or not the payer got the ball.

Like basketball, IT has opportunities for "hidden" metrics that CIOs can use to gauge the overall effectiveness of their departments. These metrics can make IT better if they are used as yardsticks, and performance goals are set to improve the results. Here are five hidden metrics opportunities.

1: Application maintenance/development ratio

Most IT shops have existing application code bases that have long since passed through development and are now in maintenance and enhancement phases. It's not unusual for app fixes and enhancements to consume up to 60% of application development's time, which leaves less than half of the time for developing the deluge of new mobile and web-based applications the business wants.

To move the ratio more toward the new development side of the equation, many CIOs keep a handle on how application development time is spent, but most are struggling to attain more than a 50:50 split. In the future, there will be pressures to move this ratio in favor of new development instead of maintaining aging code bases.

2: Cost to produce new applications

It takes servers, storage, energy, software, and personnel to develop, test, stage, and train users on new applications before these apps can be placed into production. Over the past 10 years, sites have made great strides in reducing costs by reigning in data center energy consumption, and decreasing the footprints of servers and storage through the use of virtualization. But on the systems software side, which includes database and transaction processing software, there have been fewer advances. Consequently, when IT develops a new application and then tests, stages, and trains users on the app, each of these application phases must have its own database and associated resources.

Creating all of these "supporting" resources for applications is labor intensive for staff. The need for so many physical databases dramatically increases software licensing costs, and the need to host all of these physical databases pushes hardware into expensive upgrade cycles.

Why hasn't as much been done in this area as in hardware, where there has been massive virtualization? One reason is that software virtualization tools are less visible to CIOs. Technical decision makers usually evaluate and recommend these tools for purchase. Many times, they are so accustomed to doing things in a certain way that they don't want to change. Nevertheless, there is real opportunity for data center savings in this "hidden" area. In one case, an Australian financial institution attained a 90% savings on software licensing and hardware upgrade costs, thanks to the addition of virtualization tools for system-level software like databases.

3: Turnover

A New York brokerage firm reported that it took two to three years to train a new college graduate into a production job in its data center. Employee turnover costs time and money, yet few CIOs keep tabs on turnover in their departments. Instead, turnover is consigned to HR, which measures turnover across the overall company. This practice compromises the ability of CIOs to drill down into why key people leave, and what they can do in the future to retain key contributors.

4: Help desk intelligence about the worst apps

The help desk is often the dungeon of IT — a place where new employees are assigned for the first six months of employment before they get moved to applications, networking, or some other technical discipline. Few IT pros want to stay on the help desk, because they want to build apps, not answer incessant user questions.

But for CIOs who strategically leverage what is learned at the help desk into intelligence that can be used in new application development and improvement, the benefits can be significant. Help desk statistics can tell you which apps are the worst (i.e., which get the most user calls and seem to have the most reported problems). By looking at these "worst apps," software designers can assess why the apps are problematic, and what can be done to improve future applications so pitfalls can be avoided. When help desk personnel are plugged into this discovery process, they also get a renewed sense of participation in mainstream IT.

5: Converting training to productive output

Most IT departments have their own training budgets, and each year they send employees to IT courses to learn critical skills. The key to optimizing this training investment is the availability of projects where newly trained personnel can immediately start practicing the skills they learned. When coordination between training and projects doesn't happen, the training investment is lost.

It's easy for CIOs and key IT managers to forget this important link between skills training and actual work in projects. Establishing an internal metric that assesses how much new training was actually used in projects creates visibility of return on training investment.

What would you add to this list of hidden metrics? Let us know in the discussion.

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About Mary Shacklett

Mary E. Shacklett is president of Transworld Data, a technology research and market development firm. Prior to founding the company, Mary was Senior Vice President of Marketing and Technology at TCCU, Inc., a financial services firm; Vice President o...

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