In Pursuit of Operational Excellence
I recently wrote a blog where I outlined an epiphany I had around the need for an IT team to be operationally excellent (the original blog can be found here). In essence the insight was that high performing organisations have high performing IT teams and that a key characteristic of being a high performing IT team is operational excellence. That is, high performing IT teams spend significantly less than their industry peers on managing business as usual activity.
Operational excellence is not something that I find naturally inspiring. When I made the decision to become a CIO I was inspired by the goal of using technology to impact the organisation’s strategy and performance, not by being operationally excellent. This hasn’t changed. I still find the notion of using technology to create an organisation’s future inspiring, however I now realise that in order to be seen as strategically relevant you need to be operationally excellent first.
This was great to know but it begged a couple of further questions. Firstly what does operational excellence mean and secondly what can you do to become operationally excellent if you are not there already? The intention of this blog is to answer these two questions.
What is operational excellence?
To be considered operationally excellent you need to achieve the following 4 things.
- IT services you provide need to be stable and fit for purpose. That is, they need to work when the users expect them to, operate as expected and get the job done.
- IT needs to consistently deliver the technical outcomes of approved projects. At a minimum this means that projects are delivered on time, on budget, to scope and results in fit for purpose IT services.
- IT teams need to be customer oriented and easy to do business with. Your customers and users of IT services need to want to do business with you. As a minimum they need to believe that you can and will help them and they need to feel understood and respected.
- You need to be seen as a good steward of money. Your CEO, CFO and all your executive peers need to see that you are careful with the organisation’s money. There is no better evidence of being good with money than being able to demonstrate that you are spending less than your competitors to deliver the same basic services. Good money management is a basic requirement in all large organisations.
If you achieve these four things then you are most likely well on your way to being operationally excellent. The easiest way to know for sure is to consistently measure these outcomes and share these with your peers (explaining why these are important).
There are many different measures you could put in place. Here is one possible set of KPIs you could use:
- The number of system faults per user per year (to show reliability of systems).
- Mean time to resolution (to demonstrate high levels of support and service).
- Customer satisfaction with IT services (to demonstrate services are fit for purpose).
- Customer satisfaction with the support provided by the IT team (to show you are easy to work with).
- Business owner and Sponsor satisfaction with IT project delivery (to demonstrate effective delivery of projects and customer focus).
- The percentage of projects delivered on time, on budget and to scope versus the original business case submitted (to demonstrate effective delivery of projects and customer focus).
- IT BAU costs as a percentage of revenue (to demonstrate cost effectiveness).
What can you do to get started?
If you are not yet operationally excellent or cannot clearly demonstrate that you are operationally excellent here are 5 things that you can do to begin to build or improve your IT operational excellence.
- Define implement and report against a set of KPI’s similar to those above. It is very difficult to improve performance if you do not consistently measure and use that information to manage outcomes.
- Align incentives and responsibilities of your team to the KPI measures. Then coach and support them to produce the desired results.
- Focus on customer service including defining and implementing effective business engagement processes to acknowledge and address service issues.
- Introduce proactive management practices including ongoing system maintenance and consistent problem management / root cause analysis to permanently address ongoing system issues.
- Remove duplication, complexity and cost from your systems landscape. This will likely include reviewing existing supplier contracts and replacing expensive and hard to maintain systems.
If you do these things you will become operationally excellent. If you are like me this may not be particularly inspiring for you it does however provide the cornerstone of high performance which you can build on to become strategically relevant and begin to deliver on the promise and potential of technology.