Task: Define Business and Operational Measures
This task establishes the requirements for the business and operational objectives and measures of a Performance Measurement System.
Disciplines: Project Management
Purpose
To define a set of measures for monitoring progress and analyzing the effectiveness of implemented change efforts.
Relationships
Main Description
IT managers are responsible for ensuring the assets within their organization are able to maximize performance to customers. Businesses undergo change at varying rates and degrees but they do change. Technology changes, people come and go, products and services change to meet customer expectations. Working with a Solution Architect, managers in IT need to be aware of how they are impacted by these changes as well as how they can change their organization to improve business performance. A multi-tiered Performance Measurement System should be an integral element of decision making by IT managers.
Steps
Identify Business Objectives

Business objectives are goals to achieve to enhance business performance. They are not the same as a vision statement for a company. Vision statements speak of the culture of a company and are abstract in nature. Business objectives are explicit statements that can be quantified and typically have dollar values associated with them. State each business objective so that it clearly and concisely articulates the achieved business value from meeting the objective.

Typically, the business objectives relate to one or more of the following:

  • Revenue
  • Operation costs
  • Return on investment

Poorly defined business objectives or objectives not tied to business performance result in wasted effort and cannot be evaluated as to whether the goal was every met. Once the business goals are identified, prioritize them. Prioritization may be based on the amount of ROI, a backlog of business enhancements, or customer satisfaction but the decision is focused on what is best for the business.

A prioritized list of business objectives is used to implement changes in an incremental or phased approach.

Define Business Measures

After identifying and describing the business objectives in a measurable form, identify the measures for each. A business objective that cannot be measured cannot be met. For each measure:

  • Identify how the measure supports the business stakeholder
  • Describe the measure in clear text
  • Define the roles and responsibilities for each measure
  • Determine the frequency needed the for collection and analysis
To aid in the development of business measures refer to the list of sample metrics and to the Value-Traceability Tree.
Identify Operational Objectives

Business objectives are achieved through the performance of the company. For IT the performance is related to the people, processes, and tools within IT. An operational objective identifies a focus of effort to align IT performance with the achievement of a business objective. Operational objectives, and their associated measures, are typically described for concepts such as:

  • Productivity
  • Time to market
  • Quality
  • Consistency

For an organization that has defined operational objectives, assess them and evaluate their relevance to the identified business objectives as well as their relationship to the identified business objectives. Are the operational objectives:

  • Abstract
  • Too broad of scope
  • Quantifiable
  • Actionable

Assessing existing operational objectives may very well show that they need to be reworked. Whether they are usable as is, need reworked, or are entirely new will bring management focus to bear on the people, processes, and tools to achieve them and their related business objective. This focus means some amount of change in measuring of individual and team behavior to understand the effectiveness of operations.

Define a small set of operational objectives that relate to one or more of the business objectives. It is recommended that fewer operational objectives be identified in order to focus resources and cost on less broad-based initiatives. Using a more surgical approach provides a better chance for successful change. Operational objectives typically result in more change of individual and team behavior. It is through the behavioral effectiveness of individuals and teams that business objectives are met.

Define Operational Measures

Once the operational objectives are identified and the relationships to business objectives established identify a small set of measures of efficiency for monitoring and analysis to reason about progress towards achievement of the operational and business objectives. Determine the frequency for the metric collection and analysis.

As with business measures an operational objective that cannot be measured cannot be met. For each measure: 

  • Identify how the measure relates to a business measure
  • Describe the measure in clear text
  • Define the roles and responsibilities for each measure
  • Determine the frequency needed for the collection and analysis

Review the section for Value-Traceability Tree during this step. They may provide strategies to implement consistent with the operational objectives.

More Information
Guidelines