ITAM KPIs: Choosing The Right North Star Metrics for Your Business
In a recent podcast, Anglepoint’s Senior Lead Consultant, Chris Hayes joined the ITAM Review to discuss the topic of using ITAM KPIs to drive the right business outcomes. The discussion offered some great insights for organizations reviewing current KPIs, or setting new ones. This conversation can be applied to any type of KPI, spanning beyond ITAM-specific KPIs. In this article, we have collated key takeaways for you to guide your KPI-setting process to make sure they deliver true value.
Chris is a leading consultant in Anglepoint’s ITAM Program Transformation team, drawing from vast experience in supporting ITAM maturity improvements and standing up management systems. He shared his insights on ITAM Management systems and emphasized the importance of them, which is the framework that delivers defined value through processes, technology, and internal and external skills held together by mutually agreed upon policies and governance. When working with clients, Anglepoint’s team constantly evaluates this balance of people, processes, and technology to align with the outcomes required.
As we assess the process of the ITAM management system, Anglepoint evaluates if clients have clearly defined and accurately measured KPIs to benchmark and track business outcomes and achievement and remove any blockers. While this sounds straightforward, some intrinsic factors must be considered.
Set Up Your KPIs for Success
The first factor will be understanding the business goals, and what is deemed a success. These will not be granular departmental goals, but instead will be the overall business goals measured by the outlined North Star Metrics, to steer the ship for long-term growth. We explored defining these in a previous article, Delivering On Business Value – What Is Important To Your Organization? These goals will be subject to change as your business steers its course, so it is important to apply the Do, Check, Act tactics regularly and review these goals.
The second factor is tracking accurate data as a KPI. The analogy we have used on this topic is:
“You have an old GPS in your car, and you put an address into it and hit GO! Ten minutes later—according to the GPS—you are driving in the middle of a field, even though you are in fact on a paved road. Now you have no idea where you are going. The GPS data hasn’t been updated and is missing key information about new road layouts. You are now lost and cannot trust the directions from the GPS to get you back on track.”
Using accurate data that will provide the required information to monitor, measure and report on the KPIs is vital. If it’s not being measured accurately then it can’t be improved. A key example is estate visibility—can you clearly report on the entire estate?
Assuming that both these factors are in place there are 3 steps to defining your KPIs that was explored in the aforementioned podcast, The Importance of KPIs in ITAM.
Evaluating KPIs for your Organization’s ITAM North Star Metrics
Step 1. Establish Your Metrics
Keeping the organizational North Star Metrics in mind, whether you are on the ITAM team or the Finance team, you need to clearly define your KPIs that help drive your department’s desired outcomes. These metrics should be measurable, repeatable, and sustainable, leveraging accessible data for accurate measurement. You will need to be able to explain this clearly and show the results in comparable reports, month-on-month, week-on-week, and relate this to the overall company goal. These five or six ITAM measurables you define are what is going to drive value for the organization from your department. When these ITAM measurables are combined with those from other departments, they will provide the basis on which your organization’s North Star Metrics can be measured.
Step 2. Foster Collaboration and Alignment
Establish alignment of your management system objectives with other departments. You can uncover overlaps and commonalities across functions by having collaborative discussions and creating an ongoing cadence of discussing your department’s ITAM KPI measurables. These discussions also provide insights into how other departments measure their performance, allowing you to see how the data can be combined for a more complete picture. For example, consider how ITAM can contribute to top-down initiatives such as IT spend reduction. By understanding how ITAM supports this, you can utilize economies of scale by supporting a common framework for negotiating with vendors more effectively at renewals.
During this step of aligning KPIs, it’s also key that the terminologies used across departments are standardized to ensure there is consistency. It’s important to be able to explain your ITAM metrics clearly to ascertain whether your team is referring to cost avoidance and Finance is calling it cost saving. You may be calculating the same thing and giving it a different name, so part of the alignment process is understanding how you talk about things. Equally important is aligning on how this is measured, and which data sets are being used. Small differences in the filtering or segmentation of data can give drastically different figures—it’s important to compare ‘apples with apples.’ However you do it, it needs to be repeatable and sustainable.
Step 3. Communicate Effectively with Senior Management
This alignment process demonstrates to the senior management the clarity of vision and understanding of strategic objectives within the organization. Each department should bring its metrics to the table, ensuring they are aligned on terminology, measurables, and measurement methodologies, collaborating to focus on the same North Star. The result is a powerful overlay of intelligence delivering clear visibility on whether your organization is meeting its North Star Metrics and where improvements can be made. The overall KPIs can be agreed on, as can the methods for reporting these metrics to senior management, fostering transparency, and defining success. Every organization is different and there is not a one-size-fits-all approach to this. Some organizations will be very structured and top-heavy, so C-Level will decide what information they want and how they want it delivered and departments will have to adjust and adapt to add value. These KPIs may be more granular around data quality or effective specific reports. In other organizations, the senior management will embrace these defined KPIs and work with the departmental leads to understand what their goals and objectives are and how these will drive the overall business success. These KPIs may be broader and business-focused around a defined savings number or no audit spend. Some may sit between the two.
However your organization works, the cadence for reporting and reviewing KPIs must be agreed on. In a mature ITAM framework, there is a component of educated and informed leadership by way of a steering committee that should meet at least quarterly so the key business decisions and updates around program progress and what’s being measured can be put in front of the executives. Following these steps will go a long way to prevent new left-field KPIs from being thrown in that no one can deliver or measure. Constant communication in the interim will flag up strategy or objective changes that need to be considered for up-and-coming reviews to enable KPIs to be adjusted.
Final Thoughts: Leveraging KPIs For Organizational Success
The continuous process of defining KPIs, measuring, and reviewing them moves your organization into the realm of ISO 19970-1 and starts to build a more mature ITAM framework. These KPIs can be defined and leveraged to improve all organizational aspects from FinOps and IT Security, to ESG and employee attrition, ultimately meeting North Star objectives and achieving organizational success.
For more information on defining your North Star Metrics, download our eBook “Optimizing ITAM KPIs: Data Visibility For Program Excellence ”. Learn how to align your KPIs and gain the required visibility of accurate data needed to measure and review these key metrics.
If you would like to speak to our experts about support to help define your organization’s North Star Metrics and the KPIs required to achieve them, contact us to arrange a call.