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ITSM Basics: Getting Your KPIs Right

By | November 10, 2015 in Service Desk

ITSM Basics

Is first contact resolution (FCR) a good KPI for the service desk and incident management? Many corporate IT organizations think that it is – after all, it’s definitely one that’s prominent in the ITIL books and is popular with many IT service management (ITSM) consultants. But is it right for every IT organization?

On one level, is it a just a measure of closed calls or of the percentage of end-user issues that were given proper care and attention? On another, what’s included in FCR stats? Just easy incidents, including password resets? FCR can be fiddled with, and I’ve even seen service desks that add room bookings into their FCR calculations. Are trickier issues disallowed for “fairness”? And I bet some would include wrong numbers if it made the FCR stats look better. FCR, along with other ITSM KPIs, can definitely drive the wrong behaviors.

However, the real issue for me is that IT organizations need to understand what they are trying to achieve before they can define their KPIs – so picking up an industry best-practice KPI and making important decisions based on it might not be in the best interest of the company using it. I’ll come back to this. First and foremost, IT organizations also need to understand what KPIs are, and their use.

So What’s a KPI?

The easiest place to start is to look at the KPI acronym and what it stands for, or at least what it should stand for:

  • K is for Key. Most organizations will struggle to measure and report on every possible metric and, if there are too many KPIs, then the less important ones will most likely distract organizations from the key ones that they really need to focus on.
  • P is for Performance. A KPI should help organizations and teams to understand how well they are performing, and each KPI should help them to focus on a critical success factor (CSF) that needs to be achieved.
  • I is for Indicator. A KPI is not proof that something has been achieved – it’s simply an indicator that suggests how well you are currently doing. Achieving KPIs is not the end goal, it’s simply a tool to help organizations to focus on their activities, to implement remedial or improvement activities as needed.

Don’t Confuse KPIs with CSFs

Wow, us IT people really love our 3LAs (that’s three letter acronyms)!

CSFs are the things organizations or teams must achieve to help meet their goals and objectives. These may not be directly measurable, but it should be very clear how they contribute to success. Some examples of CSFs for ITSM processes include that:

  • The business is protected from the adverse impact of IT change (a CSF for change management)
  • IT service downtime doesn’t have a serious impact on the affected business service or process (a CF for availability management)
  • Workarounds reduce the business impact of problems (a CSF for problem management)

And although IT organizations might not be able to directly measure these CSFs, they can discuss them with their customers and other stakeholders, and agree that this is what you are trying to achieve via ITSM.

Turning CSFs into KPIs

Once CSFs have been agreed it’s time to define KPIs that indicate how well the organization is performing against these CSFs. There should only be a small number of KPIs for each CSF, otherwise the numbers become unmanageable.

Looking at the “Downtime of the service does not have a serious impact on the customer’s business process” CSF, example KPIs could be:

  • A maximum of four events in any year where there’s a total loss of the service to all users
  • The maximum downtime for any total service outage is 30 minutes

And remember, achieving these KPIs will not definitively prove that the CSF has been met, but it will help to indicate it.

Organizations should agree with the customer that this is what will be measured, and then report the KPIs to indicate how good the performance has been. But, in customer reviews, there is a need to discuss the CSF, not the KPIs – with the customer discussion something like “Here is the KPI data, do you agree that downtime of the service has not had a serious impact on your business processes?” This way, organizations can focus on what’s important rather than on what’s being measured. Read that last sentence again – it’s a very important point with KPIs and CSFs.

Why Using Best-Practice KPIs Can Be Dangerous

The ITIL books include many example KPIs, but in each section that lists KPIs it says:

“These KPIs should not be adopted without careful consideration. Each organization should develop KPIs that are appropriate for its level of maturity, its CSFs and its particular circumstances.”

Let’s return to the example of FCR and think about whether this is a good KPI or not. Suppose that an organization just measures FCR, as the right thing to do, and then reports it to show how the service desk is increasing the number of customer incidents and requests it closes during the initial phone call. This has to be good, right?

But then suppose that the organization introduces a new self-service capability, to allow people to manage many of their own incidents and requests without the need for a phone call to the service desk. They might also automate password resets, and provide knowledge articles to help people resolve common issues for themselves. This should lead to faster resolutions and happier customers but, as more of the simple incidents and requests move away from the service desk, the agents will have a higher proportion of difficult incidents to deal with. Thus FCR will get worse and might even become irrelevant. Hence FCR might be a good KPI for some organizations, but it might be completely inappropriate for others. And, more specifically, using FCR to benchmark either over time or externally will be inappropriate as the average incident or request level changes over time.

So when an organization is defining KPIs it really does need to think about: its level of maturity; its customers; and its goals, objectives, and CSFs. It’s important that they choose a small number of KPIs that will help to indicate how well they’re doing versus the CSFs. They will also need to regularly review their KPIs to ensure they are still appropriate.

When did you last review the KPIs you use to manage your IT services? Maybe it’s time to think about them again. For further insights, I recommend you watch my good friend Rob England's webinar The Right Metrics for Your Service Desk.

This blog is based on a previous Joe blog written for Conference in a Box.

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Joe The IT Guy

About Joe The IT Guy

Native New Yorker. Loves everything IT-related (and hugs). Passionate blogger and Twitter addict. Oh...and resident IT Guy at SysAid Technologies (almost forgot the day job!).

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