The secret to getting better at anything – whether it be playing a sport, perfecting a craft or running a business – is knowledge. Having the right knowledge and information is what allows you to continuously improve and grow.
But what counts as ‘the right knowledge’ or the ‘right’ information? That’s where metrics come in.
Jeff Bladt and Bob Filbin use the analogy of baseball to explain the importance and relevance of metrics to businesses:
‘Take baseball. Every team has the same definition of success — winning the World Series. This requires one main asset: good players. But what makes a player good?
In baseball, teams used to answer this question with a handful of simple metrics like batting average and runs batted in (RBIs). Then came the statisticians (remember Moneyball?). New metrics provided teams with the ability to slice their data in new ways, find better ways of defining good players, and thus win more games.’
When it comes to running a small business and managing IT costs, tracking the right metrics and benchmarking your IT is the key to driving efficiency and productivity. Using data you already have, you can make more intelligent decisions about your IT and find better ways to manage costs while growing your business and giving your staff the technology they need.
What are metrics?
If you don’t already know, metrics are basically numbers that tell you important information about something. Examples of common metrics include:
- Number of views on a YouTube video
- Average number of free trial signups per week
- Customer acquisition cost
- Average length of your sales cycle
On their own, most metrics won’t tell you much about your business. But when viewed together as part of a bigger picture, they can be extremely powerful. They’re extremely powerful when analysed as part of a bigger picture than as discrete points of data.
Why should you track IT benchmarking metrics?
Your IT is critical to the growth and performance of your business. Tracking IT benchmarking metrics, therefore, is an important part of analysing the IT activities that are working (or aren’t working) so that you can continuously improve.
In particular, tracking IT benchmarking metrics will help you:
- Understand if you’ve got the right hardware or software for your needs;
- Identify opportunities for cost-savings or efficiency gains;
- Analyse whether your customer support efforts could be improved; or
- Evaluate whether you need to outsource IT support or get an IT business partner.
Beyond performance, measuring your IT department’s contribution to your business is a positive step towards raising its profile with your stakeholders and in the boardroom. With a handful of metrics at your disposal, you can demonstrate to anyone – potential investors, clients, and other stakeholders – exactly what the IT brings to the business, and lay the groundwork for increased IT investment or a new IT strategy.
What metrics should you be tracking?
‘Good metrics,’ Bladt and Filbin say ‘have three key attributes: their data are consistent, cheap and quick to collect.’
Your IT benchmarking metrics should be easy to collect, and they should align with your broader business goals. There is no point in tracking something that doesn’t benefit the entire business, relates to a single event, or that you can’t use to paint a picture of how the business is performing over all.
When identifying IT benchmarking metrics to track, ask yourself:
- Is it tied to a business goal?
- Is it important to the customer?
- Does it measure a single condition or event?
- Is it easy to measure and report?
- Does it have specific results that support decision making?
If you answer ‘yes’ to these questions, then you have a valuable IT benchmarking metric that’s worth tracking.
6 IT benchmarking metrics we recommend tracking
Here are some valuable IT benchmarking metrics that we recommend tracking.
- Number of Service Disruptions. This is how many times in a defined period your IT services disrupted, down or otherwise unavailable. You can compare this metric with variation in income, new customer acquisition or productivity to evaluate the impact of downtime on your business.
- IT overhead costs. How much is your IT department costing you? This includes staffing, licenses, hardware and anything under the umbrella of IT. Use this metric as a gateway to identifying opportunities to cut costs, or as a way to start analysing your capital expenditure vs. operational expenditure
- Hours worked per process. Identify some key business processes and track how many hours you and your staff spend on them. Think timesheets, reporting or preparing presentations. Finding out how much time goes into each process can help you identify opportunities for efficiency gains, and opens up a conversation about which processes and systems are working, and which ones aren’t.
- Operating productivity. IT issues can slow people down and be a drain on productivity. To analyse the impact of IT on operation productivity, take the number of people on your team and divide it by the number of IT support issues raised or calls made. If the result seems high, you may need to invest in some employee training, better software or hardware upgrades.
- Average speed answered. Again, IT issues slow people down – especially if they go unsolved for a long time. Find out how quickly you’re resolving IT issues by looking at the average time it takes to get IT support.
- Average call duration. If calls to your IT support are short, then your support team is efficient in resolving issues and the caller’s productivity interruption is minimal. If they’re long, then you may be understaffed or you may have some more serious problems with your IT that warrant more than over-the-phone troubleshooting. Help from an IT business partner may be in order.
Knowledge is power
Remember, your IT department doesn’t exist in a vacuum. There are ways to view the impact that it has on your business as a whole. By tracking IT benchmarking metrics, you can start to improve and empower your business’s IT and use it as a platform for improving processes, productivity and eventually revenue. With the right information there is no telling what your business could do.
6 IT benchmarking metrics every small business should be tracking