Porter's Value Chain
Porter’s Value Chain

As we mentioned in our last post, as soon as we take the point-of-view that IT is a value delivering part of the operations chain, our next step is to identify and document the business metrics for successful IT contribution.  The value delivered by IT services and applications falls into 3 overarching categories, which really stem from business P&L:

  • Revenue Impact
    • Transaction Systems
    • Customer Support
    • Shopping Cart
    • CRM Systems
    • Order Entry
    • Client Support
  • Cost Reduction
    • Productivity
    • Efficiency
    • Staffing Organization
    • Optimization
    • Service Level Alignment
  • Risk Mitigation
    • Operational Downtime
    • Reputation Loss
    • Compliance and Audit
    • Data and Operational Security
    • Vulnerability Remediation

Examples of business metrics: NPS, MTBF, transactions/hour, total uptime, latency, bandwidth utilization, unplanned downtime, instances/user, TTR, labor as % of budget, change failure rate, capacity utilization to plan, vulnerabilities remediated/period, etc.

In the next blog post we will talk about infrastructure & operations levers (connectivity, security and compliance, hardware and software, service support, service continuity, and management process) that utilize these metrics, and how to approach IT outsourcing decisions based on them.


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