Business Transformation in Action

We all know return on investment is important. But how do we know when we're seeing ROI from service implementations?  And how do we know if this ROI is relevant to the overall performance of the business?  Remember, those engines in the lower decks of the Titanic were running quite nicely, but that wasn't relevant to the fate of the ship.

Or, to look on the bright side, suppose your SOA or cloud services are a raging success, but nobody is aware of it?

I've come across two overlapping sets of metrics that may help in determining the value of SOA and cloud services.

The first set of metrics comes by way of my chum Steve Swoyer, who channels Gartner's advice on the subject:

1. Improved efficiency, particularly with respect to business processes execution
2. Lower process administrative costs
3. Higher visibility on existing/running business processes
4. Reduced number of manual, paper-based steps
5. Better service-level effectiveness
6. Quicker implementation of processes
7. Quicker time to market
8. Shorter (overall) project cycles
9. Overall reduction in the total cost of application development and maintenance

Enter the scenario of cloud-based services. Should these same metrics also apply?  Charlie Bess of HP provides some additional metrics that can help you determine if cloud services are delivering:

1. Provisioning time (down, leading)
2. Service reuse  (up, lagging)
3. Utilization (hardware, storage...)  (up, lagging)
4. Uptime/hour  (down, lagging)
5. In house personnel dedicated to operations support (down, lagging)
6. Business value generated per effort hour (up, lagging)
7. Business value generated per watt consumed (up, lagging)
8. Percentage of IT budget dedicated to fixed costs and maintenance  (down, lagging)