This article was originally written by Avanade alum Dave Carmichael.

Key to making an IT modernization business case is the ability to demonstrate business ROI, thinking beyond IT, to show the impact to the business.

Critical to showing this impact is the ability of IT to measure key performance indicators (KPIs). This will enable you to understand where you are now (a baseline), how you compare against your peers and what areas you need to focus on. Just as critical is to show the relationship between those IT KPIs and business impact.

Where do you start? 
Well before you get into familiar IT territory, think about that how you can categorize that business impact. Here’s an example of the ones that we focus on at Avanade for some of our clients:

• Efficiency – if you’re IT is efficient, you can enjoy the benefits of lower cost and lowers risk, enabling the business to be more confident regarding new initiatives.
• Agility – IT supports business agility by delivering reliable, high quality applications and services fast.
• Innovation - the ability of the business to do new things- pursue new markets; create new products and services.

What IT KPIs do you use today?

The best place to start is those IT KPIs you use today that you can align to the above business categories, so for example:

• The ratio of IT staff to the number of business users is a good way to measure efficiency
• The average time to resolve a downtime incident is a good measure of agility
• The amount of time the IT team spends keeping the lights on is a good indication of innovation

The next step is to look for other KPIs that will help substantiate the impact further e.g. how long does it take you to implement a change request for a revenue generating business application. This type of KPI can then be directly related to the increased revenue the business is making, so now you’re clearly demonstrating the impact of IT to business ROI.

Comparing your KPI results with those of your peers
This is where things get a bit trickier as it’s unlikely you know the KPIs of your peers! It was the same problem for Avanade when we wanted show the extent to which we’ve helped our clients, so we turned to the research firm IDC for help. IDC already has an IT performance model created from the results of interviews with over 400 organizations across multiple industries and four global regions. IDC then helped us create an IT Performance Index, based on their model that enabled that peer comparison.

Find out how your organization ranks
We’ve now published the tool so anyone can try it for free. It’s pretty handy if you’re trying to make a business case for an IT project to be able to view independent data that shows how well you’re performing against your peers. All you need to do is enter a few bits of information IDC need to be able to plot you in the IT Performance Index, and you get to see how you stack up. If you then enter a name and email address you’ll get sent a pretty comprehensive report that shows how you perform against your peers in those key areas of efficiency, agility and innovation against the IT KPI’s. And because IDC has already done business ROI research with Avanade’s client's, you’ll be able to see the impact moving to Avanade’s managed services could have on those KPI’s. 

We invite you to take the IT Performance Assessment and learn how you can modernize your IT operations.