Key Metrics for Every CIO

CIOs need to measure a set of specific metrics that:

• Will support the organization’s vision, their career, and the IT function all in one.
• Can be used as a tool to make informed decisions and take appropriate actions that will improve the IT function’s ability to deliver value.
• Consider the influence of critical stakeholders, especially the end customer.
• Are easily measured at any point in time.

CIOs often cannot define these metrics because:

• We confuse the operational metrics IT leaders need to monitor with strategic metrics CIOs need to monitor.
• Previously monitored metrics did not deliver value.
• It is hard to decide on a metric that will prove both insightful and easily measurable.
• We measure metrics without any method or insight on how to take actionable steps forward.

For every CIO, there are six areas that should be a focus, no matter your organization or industry. These six priorities will inform the metrics worth measuring:

• Risk management
• Delivering on business objectives
• Customer satisfaction
• Employee engagement
• Business leadership relations
• Managing to a budget

• Metrics should be used as a tool by the CIO to help inform the future actions that will be taken to reach the organization’s strategic vision.
• As a CIO, you need to have a defined set of metrics that will support your career, the organization, and the IT function you are accountable for.
• CIO metrics must consider the most important stakeholders across the entire ecosystem of the organization – especially the end customer.
• The metrics for a CIO are distinctly different from the metrics you use to measure the operational effectiveness of the different IT functions.

• CIOs often do not measure metrics because they are not aware of what should or needs to be measured.
• As a result of not wanting to measure the wrong thing, CIOs can often choose to measure nothing at all.
• Or they get too focused on the operational metrics of their IT organization, leaving the strategic business metrics forgotten.
• Moreover, narrowing the number of metrics that are being measured down to an actionable number is very difficult.
• We rely only on physical data sets to help inform the measurements, not considering the qualitative feedback received.

46% of CIOs are transforming operations, focused on customer experiences and employee productivity. (Source: Foundry, 2022.)

Finances (41.3%) and customers (28.1%) remain the top two focuses for CIOs when measuring IT effectiveness. All other focuses combine for the remaining 30.6%. (Source: Journal of Informational Technology Management, 2018.)

1. Every CIO has the same set of priorities regardless of their organization or industry given that these metrics are influenced by similar goals of organizations.
2. CIO metrics are a tool to help inform the actions that will support each core area in reaching their desired goals.
3. Be mindful of the goals different business units are using to reach the organization’s strategic vision – this includes your own IT goals.
4. Directly or indirectly, you will always influence the ability to acquire and retain customers for the organization.

• When you have good metrics, you can:
  • Ensure employees are focused on the priorities of the organization
  • Have insight to make better decisions
  • Communicate with the business using language that resonates with each stakeholder
  • Increase the performance of your IT function
  • Continually adapt to meet changing business demands
• Metrics are tools that quantifiably indicate whether a goal is on track to being achieved (proactive) or if the goal was successfully achieved (retroactive)
• This is often reflected through two metric types:
  • Leading Metrics: The metric indicates if there are actions that should be taken in the process of achieving a desired outcome.
  • Lagging Metrics: Based on the desired outcome, the metric can indicate where there were successes or failures that supported or prevented the outcome from being achieved.
• Use the data from the metrics to inform your actions. Do not collect this data if your intent is simply to know the data point. You must be willing to act.

• Leveraging the IT leadership team, empower and hold each leader accountable for the operational metrics specific to their functional area
• As a CIO, focus on the metrics that are going to impact the business. These are often tied to people or stakeholders:
  • The customers who will purchase the product or service
  • The decision makers who will fund IT initiatives
  • The champions of IT value
  • The IT employees who will be driven to succeed
  • The owner of an IT risk event
• By focusing on these priority areas, you can regularly monitor aspects that will have major business impacts – and be able to address those impacts.

• Time to deliver
• Time to resolve
• Project delivery (scope, time, money)
• Application usage
• User experiences
• SLAs
• Uptime/downtime
• Resource costs
• Ticket resolution
• Number of phishing attempts

• Few individuals in an organization understand IT risks and can proactively plan for the prevention of those threats, making the CIO the responsible and accountable individual when it comes to IT risks – especially the components that tie into cybersecurity.
• When the negative impacts of an IT threat event are translated into terms that can be understood and actioned by all in the organization, it increases the likelihood of receiving the sponsorship and funding support necessary.
• Moreover, risk management can be used as a tool to drive the organization toward its vision state, enabling informed risk decisions.

Risk management metric:

Number of critical IT threats that were detected and prevented before impact to the organization.

• Percentage of IT risks integrated into the organization’s risk management approach.
• Number of risk management incidents that were not identified by your organization (and the potential financial impact of those risks).
• Business satisfaction with IT actions to reduce impact of negative IT risk events.
• Number of redundant systems removed from the organizations portfolio.

• Create a risk-aware culture, not just with IT folks. The entire organization needs to understand how IT risks are preventable.
• Clearly demonstrate the financial and reputational impact of potential IT risks and ensure that this is communicated with decision-makers in the organization.
• Have a single source of truth to document possible risk events and report prevention tactics to minimize the impact of risks.
• Use this information to recommend budget changes and help make risk-informed decisions.

49%

Investing in Risk

Heads of IT “cited increasing cybersecurity protections as the top business initiative driving IT investments this year” (Source: Foundry, 2022.)

• CIOs often want to know how they are performing in comparison to their competitors (aka where do you compare in the benchmarking?)
• While this is a nice to know, it adds zero value in demonstrating that you understand your business, let alone the goals of your business
• Every organization will have a different set of goals it is striving toward, despite being in the same industry, sector, or market.
• Measuring your performance against the objectives of the organization prevents CIOs from being more technical than it would do them good.

Business Objective Alignment Metric:

Percentage of IT metrics have a direct line of impact to the business goals

• Number of IT initiatives that have a significant impact on the success of the organization's goals.
• Number of IT initiatives that exceed the expected value.
• Positive impact ($) of IT initiatives on driving business innovation.

• Establish a library or dashboard of all the metrics you are currently measuring as an IT organization, and align each of them to one or more of the business objectives your organization has.
• Leverage the members of the organization’s executive team to validate they understand how your metric ties to the business objective.
• Any metric that does not have a clear line of sight should be reconsidered.
• IT metrics should continue to speak in business terms, not IT terms.

50%

CIOs drive the business

The percentage of CEOs that recognize the CIO as the main driver of the business strategy in the next 2-3 years. (Source: Deloitte, 2020.)

• Now more than ever before, IT can positively influence the end-customer’s satisfaction with the product or service they purchase.
• From operational redundancies to the customer’s interaction with the organization, IT can and should be positively impacting the customer experience.
• IT leaders who take an interest in the customer demonstrate that they are business-focused individuals and understand the intention of what the organization is seeking to achieve.
• With the CIO role becoming a strategic one, understanding why a customer would or would not purchase your organization’s product or service stops being a “nice to have.”

Customer satisfaction metric:

What is the positive impact ($ or %) of IT initiatives on customer satisfaction?

• Amount of time CIO spends interacting directly with customers.
• Customer retention rate.
• Customer attraction rate.

• Identify the core IT capabilities that support customer experience. Automation? Mobile application? Personal information secured?
• Suggest an IT-supported or-led initiative that will enhance the customer experience and meet the business goals. Retention? Acquisition? Growth in spend?
• This is where operational metrics or dashboards can have a real influence on the customer experience. Be mindful of how IT impacts the customer journey.

41%

Direct CX interaction

In 2022, 41% of IT heads were directly interacting with the end customer. (Source: Foundry, 2022.)

• As a leader, you should always have a finger on the pulse of how engaged your employees are
• Employee engagement is high when:
  • Employees have a positive disposition to their place of work
  • Employees are committed and willing to contribute to the organization's success
• Employee engagement comprises three types of drivers: organizational, job, and retention. As CIO, you have a direct impact on all three drivers.
• Providing employees with a positive work environment where they are empowered to complete activities in line with their desired skillset and tied to a clear purpose can significantly increase employee engagement.

Employee engagement metric:

Number of employees who feel empowered to complete purposeful activities related to their job each day

• Tenure of IT employees at the organization.
• Number of employees who seek out or use a training budget to enhance their knowledge/skills.
• Degree of autonomy employees feel they have in their work on a daily basis.
• Number of collaboration tools provided to enable cross-organizational work.

• If you are not willing to take actionable steps to address engagement, don’t bother asking employees about it.
• Identify the blockers to empowerment. Common blockers include insufficient team collaboration, bureaucracy, inflexibility, and feeling unsupported and judged.
• Ensure there is a consistent understanding of what “purposeful” means. Are you talking about “purposeful” to the organization or the individual?
• Provide more clarity on what the organization’s purpose is and the vision it is driving toward. Just because you understand does not mean the employees do.

26%

Act on engagement

Only 26% of leaders actually think about and act on engagement every single day. (Source: SHRM, 2022.)

• Your relationship with other business peers is critical – and, funny enough, it is impacted by the use of good metrics and data.
• The performance of your IT team will be recognized by other members of the executive leadership team (ELT) and is a direct reflection of you as a leader.
• A good relationship with the ELT can alleviate issues if concerns about IT staff surface.
  • Of the 85% of IT leaders working on transformational initiatives, only 30% are trying to cultivate an IT/business partnership (Foundry, 2022).
• Don’t let other members of the organizations ELT overlook you or the value IT has. Build the key relationships that will drive trust and partnerships.

Business leadership relationship metric:

Ability to influence business decisions with trusted partners.

• The frequency with which peers on the ELT complain about the IT organization to other ELT peers.
• Percentage of business leaders who trust IT to make the right choices for their accountable areas.
• Number of projects that are initiated with a desired solution versus problems with no desired solution.

• From lunch to the boardroom, it is important you make an effort to cultivate relationships with the other members of the ELT.
• Identify who the most influential members of the ELT are and what their primary goals or objectives are.
• Follow through on what you promise you will deliver – if you do not know, do not promise it!
• What will work for one member of the ELT will not work for another – personalize your approach.

60%

Enterprise-wide collaboration

“By 2023, 60% of CIOs will be primarily measured for their ability to co-create new business models and outcomes through extensive enterprise and ecosystem-wide collaboration.” (Source: IDC, 2021.)

• From security, to cloud, to innovating the organization's products and services, IT has a lot of initiatives that demand funds and improve the organization.
• Continuing to demonstrate good use of the budget and driving value for the organization will ensure ongoing recognition in the form of increased money.
• 29% of CIOs indicated that controlling costs and expense management was a key duty of a functional CIO (Foundry, 2022).
• Demonstrating the ability to spend within a defined budget is a key way to ensure the business trusts you.
• Demonstrating an ability to spend within a defined budget and reducing the cost of operational expenses while increasing spend on strategic initiatives ensures the business sees the value in IT.

Budget management metric:

Proportion of IT budget that is strategic versus operational.

• Cost required to lead the organization through a digital transformation.
• Reduction in operational spend due to retiring legacy solutions.
• Percentage of budget in the run, grow, and transform categories.
• Amount of money spent keeping the lights on versus investing in new capabilities.

Action steps to take:

• Consider opportunities to automate processes and reduce the time/talent required to spend.
• Identify opportunities and create the time for resources to modernize or even digitize the organization to enable a better delivery of the products or services to the end customer.
• Review the previous metrics and tie it back to running the business. If customer satisfaction will increase or risk-related threats decrease through an initiative IT is suggesting, you can make the case for increased strategic spend.

90%

Direct CX interaction

Ninety percent of CIOs expect their budget to increase or remain the same in their next fiscal year. (Source: Foundry, 2022.)

• Use this tool to review commonly used KPIs for each practice area
• Identify KPI owners, data sources, baselines, and targets. It also suggests action and research for low-performing KPIs.
• Use the "Action Plan" tab to keep track of progress on actions that were identified as part of your KPI review.

• Consolidate your metrics and assign context and actions to those currently tracked.
• Establish tension metrics to see and tell the whole story.
• Split your metrics for each stakeholder group. Assign proper cadences for measurements as a first step to building an effective dashboard.

• Understand how to respond to trends affecting your organization.
• Determine your priorities based on current state and relevant internal factors.
• Assign the right resources to accomplish your vision.
• Consider what new challenges outside of your control will demand a response.