BEZVision and Key Business Indicators
Gauging Acceptable Business Performance
In any discussion of Key Business Indicators (KBIs), everyone would agree that they are valuable measures for gauging acceptable levels of competitiveness and revenue generation. Certainly, at its highest level, revenue is itself a strong KBI, but its value is really limited by the fact that it lags behind other possible performance measures. This means that if a problem arises that will negatively affect revenue, we may not be aware of it until revenue plummets and the business is in trouble. Ideally, the KBIs we would like to measure are those that will warn us ahead of an impending threat so we have enough time to explore alternative remedies and then implement the ones that minimize or eliminate the threat.
Choosing the right Key Business Indicators
Today, it's pretty easy to find software programs that will help measure KBIs, [also frequently referred to as Key Performance Indicators (KPIs)] and display them in a variety of different user configurable dashboards. But this is tricky business. Choosing the right KBIs is challenging for anyone who needs to track and analyze the success of their organization. Many authors agree that choosing relevant KBIs is a delicate balance of art and science. Are the indicators in these programs the right ones to measure success for your organization? Are these metrics timely enough and useful for correcting an issue that hasn't yet spun out of control or are they strictly "after the fact" measures whose real usefulness has diminished to the point of becoming a lesson in experience for the next time.
For the IT staff and managers, typical KBIs and KPIs may be a little more obvious than for other business measures. These might include measures of availability (utilization), performance (response time) and capacity (throughput). Of course, these measures are not as discreet and independent as stated here. For example, if a response time problem is fixed, it may allow for increased throughput with lower device utilizations. Nevertheless, these metrics provide us with some insight that we can use to correct a poorly performing workload or application. The down side to this is the fact that all of these metrics fall into the "after the fact" category.
Key Business Indicators Should Reflect Real Business Processes
Unfortunately, these measures also have limited utility when discussing system resource consumption with other business managers and staff. While business managers have some appreciation for the computer resources they use, to frame it in terms of CPU seconds and number of I/O operations really doesn't have the full meaning that it should and with good reason. These measures don't represent the various quanta of work that business managers would actually like to measure.
Perhaps, one serious shortcoming of using these measures as KBIs is the fact that they leave business managers out of any meaningful conversation about performance and capacity issues. KBIs are far more useful when they represent a quantum of work that both IT managers and business managers understand and can agree on. Business managers generally think in terms of the types of transactions they generate. Depending upon the industry, these could be the number of claims processed per hour, the number of customer queries processed per hour or any other measure that is specific to a particular business or industry. BEZVision can make up for this shortcoming with a built-in KBI facility that transforms standard system measures like CPU seconds and number of I/O operations into more meaningful indicators that are better understood by business managers.
Lagging, leading and coincidental indicators
For our purposes, KBIs can be classified into three categories:
- Lagging
- Leading
- Coincidental
Lagging indicators are good for after the fact analysis and are, for the most part, those that were mentioned above. Traditional computer performance management tools that rely solely on yesterday's collected data are pretty much restricted to lagging KPIs. While they do have value in helping us understand what happened, they do little to help us understand how we could have minimized or eliminated any problems that arose during the measurement interval. Lagging indicators, while valuable, can't really influence the outcome of the current system or business initiative. They can be used to apply remedial efforts to avoid having similar issues in the future but the damage, if any, has already been done.
Leading indicators, on the other hand, provide us with metrics that we can use to address small issues before they have a chance to become major crises. BEZVision, using predictive analytics, allows you to take just about any KBI you would like to use and turn it into a leading indicator. Leading indicators have significantly more value than lagging indicators by supporting efforts to minimize a problem while it is still small or by allowing the IT staff to take swift remedial action that will allow the problem to be avoided altogether.
Coincidental KPIs are those that occur coincidentally with others. For example, it is not uncommon to see a drop in throughput when a response time problem appears. Their value lies mostly in confirming the appearance of another issue. Rather than help predict future issues, coincidental KPIs appear along side other issues at about the same time.
BEZVision and Key Business Indicators
As mentioned above, BEZVision has a built-in KBI facility that can take virtually any measurement interval and translate it into identifiable business processes or transactions, thereby, providing a basis for discussion between IT and business managers regarding the level resources required and the associated costs of providing those resources. Click here to see an example of KBIs in BEZVision