Digital transformation (DX) is causing a shift in the enterprise. Business leaders must rely on new KPIs for effective IT measurement. This blog covers the shift from traditional IT KPIs to the new KPIs that are being demanded as organizations are disrupted by digital transformation.
Digital technologies and the new business models they fuel have significantly impacted most enterprises. In this regard, executives are called upon to leverage digital transformation (DX) to change and disrupt their business, customers, markets, and competitors. This shift is driving tremendous changes to the rules for IT measurement. Many IT organizations still lack the ability to run IT as a service business and address the business value of their contribution to enterprise imperatives.
Traditional IT measurement, with its long-term focus on efficiency metrics for managing infrastructure, applications, and components, is no longer adequate. Furthermore, a new IT contract with Line of Business (LOB) executives continues to mandate the reliability, availability, responsiveness, and flexibility for delivery of IT services critical to achieving target business outcomes …but “more” is now the imperative for IT metrics that matter.
Currently, organizations are challenged to transform IT measurement to effectively broker, integrate, and orchestrate IT “business-oriented” services empowered by 3rd Platform (i.e. cloud, mobile, big data/analytics and social business) as well as innovation accelerators (e.g. Internet of Things, robotics, 3D printing, next-gen security, cognitive interfaces, and virtual reality.) There are multiple issues created by this shift.
Examples of DX Trailing KPIs:
Examples of DX Leading KPIs:
Essentially, “leading KPIs” create a timely notification of the digital innovation’s expected success in fulfillment of the more traditional “trailing KPIs” leveraged by upper management. Additionally, “new” DX requirements for KPIs are primarily driven by the uniqueness of the short term operational goals. These reflect how DX initiatives must perform “now” versus waiting for the desired DX end-state to register win or loss. The above examples of digitally-oriented KPIs demonstrate the effectiveness and immediacy so essential in fulfilling DX targeted business outcomes.
Bill Keyworth is Vice President of Research with a focus on IT Operational Excellence for IDC’s IT Executive Program. Visit idc.com/itexecutive for more resources geared towards the IT and LOB leadership teams and information on research from IDC’s IT Executive Program.
Is your organization aggressively disruptive in the use of digital technologies? You might be the next Digital Disruptor.