Why traditional IT measures fail business leaders & what to do about it

CIOs that can translate traditional IT SLAs into a set of business aligned measures that clearly show how technology is supporting critical business processes will have the best opportunities to forge a tight alliance between the business and IT.

Part 1: Why IT Metrics are inadequate for Business Leaders

The Core Disconnect:

Business processes are closely tied to a company’s financial performance. For example, Open Enrollment in an insurance company directly impacts member acquisition and revenue, while Order-to-Cash in a retail organization affects cash flow, customer satisfaction, and sales growth.

In contrast, IT functions and processes often lack this direct correlation. They are typically organized around technical domains—like infrastructure, applications, and service desks—rather than around the business processes they support. As a result, commonly used IT metrics such as incident resolution time and system availability may offer limited insight into business value.

Bridging this gap is difficult. ITIL-aligned metrics, while operationally important, are rarely mapped to outcomes that matter to business leaders—such as revenue impact, cost efficiency, customer experience, or time to market. This misalignment prevents IT from being seen as a strategic partner and limits its ability to demonstrate value.

IT Operation’s Ability to Impact Business Outcomes:

Outside of new project initiatives or system enhancements that add new capabilities, the question is “How does IT Operations support the improvement of business outcomes”?

The core challenge is accountability. End-to-end business processes rely on a complex web of integrated applications and infrastructure, often supported by multiple internal teams or external vendors.

When something fails, pinpointing a single responsible party—the proverbial "throat to choke"—becomes difficult. This fragmentation exists both in in-house IT models, where application and infrastructure teams are siloed, and in outsourced environments, where responsibility is split across internal staff and third-party providers.  Improving service delivery requires close coordination and integration across all the responsible parties, often requiring competing companies to work in close coordination.

Sample Structure:

There are numerous examples where there were service delivery failures that caused a significant business impact, but because the service disruption was only a small part of the vendor’s portfolio they didn’t even miss an SLA let alone receive an SLA penalty. From a business leader’s perspective, this indicates a total lack of accountability, from a CIO’s perspective they are left struggling with how to close the gap.

The diagram below shows a very common support structure:

Part 2: What to do about it?

You are going to have to work within the traditional construction of IT service delivery, meaning there will always be multiple teams / organizations responsible for different components of the architecture  executing the different business process. So the question is “How to you align IT closer to the business leaders?

Things to Consider within the traditional delivery structure:

It starts with the alignment between IT and the business on the most critical processes for each business area.  Have the business identify the top 1-3 processes and establish process leads that will work with the business on driving IT value for those areas. 

Application Stability:

1.       Map the process flows across applications, network and infrastructure

2.       Identify known issues within those flows

3.       Establish a remediation plan and funding request (if required)

4.       Communicate the issue list and remediation plan to the business owners

5.       Execute and communicate status and performance improvements (repeat)

Accountability:

1.       Service Level Performance (SLAs):  If you are operating in an outsourced managed services construct you will have a series of SLAs that have financial penalties associated with them.  Consider introducing “Significant Minimums” specific to the in-scope services specifically supporting the Critical Processes. A “Significant Minimum” triggers a financial penalty if a specific performance threshold is not met, regardless of performance in the broader portfolio. This ensures that the vendor pays special attention to the processes that have the biggest impact on the business.

2.       Cross Functional Teams:  Establish cross functional teams that include each vendor and internal group that has accountability for an underlying technology or business component of the process.

The outcome that the team will look to improve is ”Throughput”.

Implement measures that identify “Latency” (business or technical) and establish tolerance thresholds for each major step in the process. By evaluating variances against these thresholds, the organization will be able to identify where improvements need to be made.

The team will need support from resources specializing in automation, as proactive monitoring including the use of synthetic transactions will be critical to the ability to track latency within the flow.

Now changing the vendor’s SLA commercial construct to include their participation in the End-to-End delivery will need to be focused on variances in the latency thresholds driven from the in-scope activities for the vendor.  Ideally the cross functional team will work together to find opportunities for improvement across organizational boundaries. One should consider the impact that financial penalties may have on that structure and consider a KPI / Reward structure in leu of a financial penalty SLA approach.