Why is an IT Benchmark a key Management tool?
An IT Benchmark is a crucial management tool. It ranks first in EMEA and a second globally in a list of management disciplines. It is no surprise that more business and technology leaders seek to dispassionately baseline the present IT state and contrast it against peers. Obtaining a metrics based and therefore clear and unbiased perspective helps businesses to identify the best optimisation and transformation avenues.
Furthermore, the ability to learn from the environment is necessary for evolution. Modern businesses demand continuous improvement to gain a competitive edge or improve efficiency. This is increasingly achieved through best-in-class technology strategy, alignment and delivery. Improvement is however, difficult without knowing the exact starting point. An IT benchmark will provide that by helping to draw an accurate ‘line in the sand’.
Reasons for performing an IT Benchmark
There are multiple reasons for carrying out an IT benchmark and contrary to popular belief improving performance, cost-efficiency and processes need not be contradictory objectives. Traditionally, an IT benchmark is undertaken periodically, to reassure management of good value service, with the primary objective to assess relative efficiency of the IT spend. In some instances the main reason for an IT benchmark to be commissioned is to explore the challenges in troubled transformational programmes.
Broadly speaking there are four popular reasons for measuring, benchmarking and monitoring key metrics of IT services:
Validate – Prior decisions can be validated by monitoring performance and measurements that lead to actionable improvements.
Direct – Monitoring and measuring allows an organisation to set strategic direction to meet future business objectives and targets.
Justify – Changes made or actions performed can be justified using effective monitoring, measuring and benchmarking.
Intervene – Analysing key benchmarking measures can indicate the changes or corrective actions needed to improve results.
However, it is worth noting that not all executives who have carried out an IT benchmark had their expectations met. This is largely because the analysis performed was not granular enough and thus able to provide only high-level trend comparisons. None or few actionable insights for decision support and planning changes or improvements can be derived from such high-level reports and surveys.
ImprovIT understand these limitations and have developed an improved approach to IT assessment and benchmarking of IT costs called Metrics Driven Analysis.
The New Digital World – IT Benchmark as part of an IT Strategy
In recent years IT benchmarking studies are being increasingly used as the sharp-end of a multi-pronged approach to develop the most appropriate IT Strategy:
- In a complex group structure, getting the best from mergers and sharing services, requires difficult decisions on IT alignment, optimisation, and simplification. Often these require specific understanding and analysis, and benefit not only from intra-group comparisons, but more so from external world comparisons.
- IT services integration is a challenge in a typical landscape of heterogeneous IT services. With a hybrid of cloud and Hosted delivered infrastructure, platforms and applications, most enterprises are supported by multiple suppliers and in-house services, having to effectively manage a complex mix of sourcing models and providers.
- Taking a big picture view, assessing key performance metrics and comparing against similar scale and complexity operations can be insightful to determine the state of play, and to underline critical gaps. To determine the ideal Service Management target model in a multi-sourced IT services supply chain.
- On-going improvement and transformation programmes – more than an audit or an invasive diagnostic – benchmarking is being used as a pro-active tool, not to force downward pressure on IT budgets or beat-up suppliers, but as a framework for continuous improvement, to find the optimal balance between cost and quality.
- As we move, the digital world moves too, thus requiring evaluations over time and like-for-like comparisons with the outside world, to assess if there is indeed innovation in IT. Granular cross-industry comparisons enable cross-pollination of best practices, usage of virtual modelling to explore alternatives, and to offer insights that can actually help in defining, planning, goal-setting and tracking improvement initiatives.
Good is not good enough, and the aspiration for innovation, integration, alignment and digital disruption seems to be fueling the demand for the benchmarking discipline ever more. The imperatives and debates being addressed require the diagnostic and analytical value only an IT benchmark can deliver.
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