For a better decision making and continual improvement of Service Management practices, a
comprehensive and effective measurement and metric method would encourage progression towards meeting business objectives.
Measurements and metrics should develop and change as the maturity and capability of a process grows. The most efficient method of measurements is to establish a ‘Metrics Tree.’
Balanced Scorecard is a Technique developed by Kaplan & Norton in the 1990s and involves defining a Measurement Framework covering four perspectives, Customer, Financial, Innovation/Internal Processes & Learning, and Growth. It can be used as a Strategy Performance Tool for the Organization towards a Metrics & Measurement framework.
Quote -” What gets measured gets managed”.
Proposal – Development of Metrics & Measurement Framework
The main objective of this research is to be able to present a balanced approach to Performance Reporting. This involves pick off, ‘right’ metrics needed to give a balanced view considering the four quadrants from balanced scorecard as a foundation in deriving; ‘what’s in it for me?’ to both; Customer and Service Provider. The intent here is for the Service Provider to have this balanced scorecard view for Performance Reporting.
Having picked what the metrics are that matter, next, is to be able to pick on what is the priority in to be represented in relevance to required agreements and compliances in the contractual agreement between the customer and service Provider. Having selected the metrics, it’s important to define, what would a measure of success for the metric mean and what would be needed to accomplish. Here is where the CSFs (Critical Success Factors) and KPIs (Key Performance Indicators) start getting to be defined. There are two basic kinds of KPI, qualitative and quantitative. The MoSCoW method is employed in this phase of metric identification. In this research, a variant of stakeholder prioritization methodology is applied to the MoSCoW definition of metrics for the balanced scorecard, so there is an agreeable approach between concerned stakeholders towards a performance reporting system.
For the CSFs and KPIs to start getting evolve into the balanced scorecard framework view, there is again this need of deriving the CSFs and KPIs in the context of Goals and Objectives of the Service Provider organization. The Goals and Objectives are a derivate from its Vision & Mission statement. At this phase of metrics definition; the GQM method is used to be able to arrive at a meaningful KPI definitions for measures of Performance Reporting.
The Principle behind GQM – Measurement should be Goal-Oriented. GQM defines Metrics top-down perspective and analyses and interprets data from bottom-up.
Every organization may find that they have limitations on what can be measured. Where organizations establish a primary measurement and monitoring capability, some caution should be exercised regarding the quality of this data: be aware of limitations of new data. Even if the data doesn’t make any sense, this is reason enough to explore the opportunity for improvements. It is important that once the decision to start capturing and reporting on data is made, an initial baseline is created so improvements can be measured against it.
Methodology & Methods:
By employing MoSCoW method and a stakeholder prioritization variant to it, the metrics and measurement framework would represent a balanced scorecard view of what metrics would come under the, ‘Must’, ‘Should’, ‘Could’ and ‘Won’t Have.’ Having decided these, the next is to be able to have a milestone approach towards deriving tangible business outcomes in the context of, immediate Quick-wins, short-term, mid-term and long-term achievable considering the agreed balanced scorecard performance reporting view on them. Next is to employ the GQM method to be able to arrive at the KPIs in the context of the Goals set.
For a better manageability, it is important to be able to arrive at what can get measured and represented, well within the scope of the contractual agreement between Customer and Service Provider. The stakeholder prioritization method of MoSCoW would greatly enable here, backed by the GQM method of drilling down the KPI to be able to measure success.
Axelos © Publication on Continual Service Improvement
- Balanced Scorecard: https://en.wikipedia.org/wiki/Balanced_scorecard, https://hbr.org/2010/10/what-cant-be-measured
- MoSCoW Method: https://en.wikipedia.org/wiki/MoSCoW_method
- Goal Question Metric https://en.wikipedia.org/wiki/GQM
Soligen & Berghout, 1999, The Goal/Question/Metric Method: a practical guide for quality improvement of software development
Lakshmi Nanduri -SMO Lead @YASH Technologies
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Lakshmi Nanduri September 11, 2017