Performance indicators must be related to agreed:
Performance indicators must be related to agreed:
- objectives and/or critical success factors.
- consistent throughout the IT organization
- reflect the IT organization’s strategy and its customers’ needs.
Measuring performance enables us
Measuring performance enables us:
- to achieve objectives. In the case of Lean IT, we always aim to relate these objectives to customer value.
Performance information available to everyone involved:
Performance information available to everyone involved:
- Primarily, the team producing the performance must get regular and frequent information feedback so that the team members are able to understand whether the performance meets the requirements.
- Team managers must also be aware of the numbers so that they can identify whether there is a reason to investigate possible shortcomings with the team.
- Lastly, the team must be prepared to share performance information with customers. Based on these insights, the customer can help to define what level of performance represents value for the customer.
By measuring the performance, the IT organization can:
By measuring the performance, the IT organization can
put a concrete number to the general feeling of the customer.
We may find, for example, based on the measurement of the average time to resolve incidents, that 90% of calls are resolved within 1 day. This measure can be equated to a ‘good’ level of performance. Sharing this information with the customer can help the customer put their own thoughts into perspective.
Performance Indicator. Clearly defined performance measures (or indicators) are vital in order to:
Performance Indicator. Clearly defined performance measures (or indicators) are vital in order to:
- understand whether the organization is achieving its goals.
Performance indicators can and must be used at all levels of the organization.
Measuring performance is in fact relatively straightforward. The key questions are:
Measuring performance is in fact relatively straightforward. The key questions are:
- Are we measuring the right things, and
- Are we using the measurement to help the organization to continuously improve?
KPI, what are the letters stand for and what is it?
Key Performance Indicators (KPIs).
A KPI is a central performance measure that supports the execution of the strategy.
KPIs cascade from the strategic level to the operational level and are consistent across the organization.
There must be a clearly defined measurement procedure
so that everyone knows how the KPI is measured and most importantly how it can be influenced.
Ideally, a KPI should be long lasting. This is to ensure that we can follow the trend of the KPI over a longer period of time,especially since the achievement of a strategy is a longer term objective.
All performance indicators should be:
All performance indicators should be:
- Specific,
- Measurable,
- Achievable,
- Realistic
- Time-bound (SMART).
we should be aiming to:
we should be aiming to: reduce the number of incidents with an increased number of changes
Contributing to customer value is always more important than achieving a KPI.
Performance indicators must be used to:
Contributing to customer value is always more important than achieving a KPI.
Performance indicators must be used to:
-direct behavior across value streams.
In the case of IT, we see that processes often go from the customer through an internal IT organization to an external service provider. Lean IT encourages organizations to look across the organizational boundaries to measure the value for the customer end-to-end
How to define a KPI?
- The goal of the KPI. What will this KPI help us to measure?
- The definition of the KPI tells what the KPI is about.
- The definition obviously impacts strongly on the formula.
- A KPI must have a unit of measurement.
- How regularly is the KPI reported?
- The KPI must have an owner.
- In order to ensure that KPIs are balanced, it is advisable to consider multiple perspectives, f
- This KPI card can be used to define other performance indicators
- Related to the formula, it is vital to define which data is used to calculate the KPI.
- We must also define the measurement accuracy. Will we round percentages up or down to the nearest integer or will we present a percentage to hundredths of percent?
- We need to understand how the KPI can be manipulated. Knowing how to fudge the numbers will enable us to be alert to any manipulation.
There are two characteristics of time that make it useful as a performance indicator:
There are two characteristics of time that make it useful as a performance indicator:
• Control.
We have direct control on cost through time usage. It is more difficult to control cost based on managing salaries since in most cases contractual agreements are not easy to change in most countries.
• Immediacy.
We can almost instantaneously change what
somebody is doing with their time. If someone is working on a change and an incident comes in, we can ask the person to stop working on the change and pick up the incident in a matter of seconds. This obviously has a downside: too much chopping and changing will lead to a “fire-fighting” culture within the IT organization.
We can define time based on the activity that is being carried out:
We can define time based on the activity that is being carried out:
- Value-Add,
- Necessary Non-Value-Add and
- Non-Value Add.
Achieving flow in processes is one of the ways in which Lean changes the way time is used.
The key question is how free time is used. Lean recommends using it to carry out improvement initiatives or respond to changes in customers’ requirements.
Process Cycle Efficiency is calculated by dividing the total Value-added Time within the process by the total Lead Time. The closer the PCE is to 100%, the greater the process has the characteristic of flow.
Within IT, we can quite easily get an estimate of the PCE of a process.
We do this by:
Process Cycle Efficiency is calculated by dividing the total Value-added Time within the process by the total Lead Time. The closer the PCE is to 100%, the greater the process has the characteristic of flow.
Within IT, we can quite easily get an estimate of the PCE of a process.
We do this by:
• Identifying the average amount of time spent working on, for example, changes.
• Determine the average end-to-end or lead time of a change.
• Dividing the amount of time worked by the average lead time, we get an approximation of the PCE for changes.
A lack of skills and knowledge is a driver of:
A lack of skills and knowledge is a driver of:
- Muri and Mura, and
- a contributor to all kinds of waste.
The objective of the Skills and Knowledge assessment tools is to:
develop people in the team so they can acquire skills and knowledge that are in line with customer demand.
The objective of the Skills and Knowledge assessment tools is to:
- develop people in the team so they can acquire skills and knowledge that are in line with customer demand.
a team needs a mixture of experts and:
a team needs a mixture of experts and:
more multi-skilled people.
How can a team identify where more or a change in skills and knowledge are required?
How can a team identify where more or a change in skills and knowledge are required?
Using the Voice of the Customer and associated CTQ,
To apply a Skill and Knowledge Analysis follow these steps:
To apply a Skill and Knowledge Analysis follow these steps:
- Analyze skills and knowledge currently available in the teams based on the voice of the customer. For overview purposes, group them in categories
- Create a form with the skills and knowledge categories and items
- Send it to every employee and request a response
- Aggregate all the responses to develop a team view on the current and future skills and knowledge requirements
- Discuss the Skill and Knowledge matrix with the employees during coaching sessions
- Change and update personal development plans and track progress both on individuals and at the team level
- Repeat these steps at least four times per year because the Voice of the Customer – the key driver for required skills and knowledge –will change
