How to measure your services and establish KPIs

How to measure your services and establish KPIs

One of the most important things you can do for your business is to establish metrics and KPIs. These values will give your business real insights into just how your services and processes are performing, allowing easier identification of inefficiencies and improvements.

But how do we establish measures? What’s the difference between a metric, a KPI and a CSF? Wait. What is a KPI? And what’s a CSF? Why are there so many acronyms in IT Service Management? Okay, okay. I’m here to help answer some of those questions.

Let’s jump to definitions and go through the journey of establishing some great metrics which will add value to your reporting suite.

Metrics are our starting point. Metrics are measurable, basic observational events.

An example of how change management metrics feed, KPIs and CSFs

Examples of metrics are numbers of changes implemented, number of reopened incidents, number of helpdesk calls, customer satisfaction, number of incidents, number of outstanding problems, etc. 
You can find metrics in your CRM, monitoring software or work management solution.

KPIs (Key Performance Indicators) are values used to measure how well a business is meeting business objectives, using our metrics. 
KPIs are used to indicate to the business, the performance level of a service or process. Once we agree a tolerance (Acceptable service levels/performance), we can report against these and empirically judge whether those results fall within acceptable levels.
Some examples of KPIs are change efficiency rate and incident repeat rate.

A CSF (Critical Success Factor) is derived from a KPI. Ultimately, this is a measure of the performance of that KPI against it’s tolerance. This is the highest level figure which’ll often feed in to management reporting.

Let’s me clarify how this works with a graphic, using change management for this example.

An example of how change management metrics feed, KPIs and CSFs

As you can see from the above, metrics are used to calculate KPIs, which are in turn then used to derive the critical success factors.

In conclusion, once you turn your metrics into KPIs and KPIs into CSFs, you can build yourself a suite of information which will give you real insights into your business and business processes. This is absolutely critical in understanding where your business is right now, before deciding where to focus your attentions in the future.