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6 Strategic KPIs for Your IT Department

It’s a new year, and IT Directors and CIOs are budget planning and setting Key Performance Indicators (KPIs)!

Or are they? While it’s traditional to submit budgets and set KPIs, Kaseya surprisingly found that KPIs are somewhat uncommon for IT departments. In a survey of 900 small-midsize companies, less than half used the basic and conventional KPI, Service Level Agreements (SLAs).

While it may be difficult to measure the value of your IT department, it’s a necessity. We'll illustrate why it’s in your department’s best interest to set IT KPIs – especially if you want to be in the room where it happens.

“Strategic” IT Departments

In order to be a CIO with a corner office and direct access to the CEO, your IT department needs to be strategic. By "strategic", we don’t mean just embodying the adjective – it refers to a specific category within IT departments. Because IT departments are evolving at differing rates, both Kaseya and CIO.com cannily created a taxonomy to distinguish the different roles IT departments play today. CIO.com used the labels functional, transformation, and strategic. Kaseya came up with a similar model.

Is Your IT Department “Strategic”?

If your team solely responds to a ticketing system that reports company IT problems, you’re functional. If your company is also developing new strategies and/or adopting new technology to lower costs and resolution times, you’re transformational. But, if your department is also looking into how new technology can contribute to the vision and growth of your company, you’re strategic.

Figuring out where you land on this scale is important because IT departments should set their KPIs based on two things: where you are right now, and where you want to be. 

Why KPIs Matter for IT Departments

Similar to utilizing IT’s annual budget, KPIs are yet another important tool to expand IT’s role within the company. In fact, there is a correlation between IT departments that use KPIs and IT departments classified as "strategic".

Kaseya found that 46% of the self-identified “strategic” companies instituted an SLA KPI metric. In comparison, only 10% of “reactive” IT departments set SLA KPIs. It makes sense. IT KPIs illustrate the value of your department to company owners. Without KPIs, the IT department remains small and under appreciated. So If you haven't set them in the past, start now – they'll give your IT department a much needed PR boost.

6 KPIs for IT Departments in 2020

Functional KPIs. No matter how “strategic” your IT department becomes, you will always be expected to meet basic "functional" responsibilities. Functional responsibilities are how smoothly you keep workplace technology running and how effectively you respond to problems.

  • Operation: Measure how well your department operates. For example, common operation KPIs are ticket response rates, resolution rates, and overall internal satisfaction with IT.
  • Crisis management: Popular KPIs here include Mean Time to Recover (MTTR) and system/technology downtime.

Transformational KPIs. You'll also need KPIs that address how well your department handles “transformational” responsibilities. This is how well you can improve and expand the roles in your department.

  • Security: Technically, security falls under functional responsibilities, but the recent emphasis and investments in security make it an area for growth. This is coming from the top down: Executives, more than ever, are concerned about security and turning to CIOs for help. So make sure you have a KPI that illustrates how you’re working to alleviate these fears.
  • Customer experience: Companies are investing in IT departments as a means to improve customer relations. According to CIO.com, 76 percent of IT leaders are meeting with customers frequently or occasionally.  
  • Cost and time savings: This can be approached by investing in the right technology. A popular strategy is leveraging cloud-based services. For example, many companies are turning to cloud-based Unified Communications to improve efficiency and reduces the number of hours IT department spends fixing tedious problems. Jive’s Hosted VoIP mid market TCO analysis illustrates how a simple switch from a legacy phone system to a Hosted VoIP solution can give your IT department more freedom, money, and leverage.

Strategic KPIs. Finally, if you want to be a “strategic” IT department, you need “strategic” KPIs.

  • Profit: To make the relevance and importance of your IT department clear, find a way to bring in money. Then, measure how much you're bringing in – increased profit will grab the attention of your peers, and earn you a seat at the table.  

Make sure your KPIs are addressing what executives want from their CIO. A solid strategy starts with ensuring your KPIs address basic IT department functions, internal improvements, and a contribution to larger company goals – like profit and a competitive edge. When you hit all three, you just might be invited to the room where it happens.