Five years ago, John L. Smith decided he wanted to start his own technology service business. He rented some office space, purchased some computer and network equipment, and installed a telecommunications circuit to the Internet. Almost immediately, he started to acquire customers who wanted him to host their business applications and for him to be responsible for the operational availability of the applications. In other words, John would provide the space, servers and local area network equipment, connectivity to the Internet, and an around-the-clock operational support staff. His customers would provide the business application software, and they would manage it remotely.
During the first 5 years, John’s business grew substantially. He had to relocate his offices three times, add computer and network equipment, increase the bandwidth and connectivity to the Internet, and hire numerous administrative and technical support staff.
As John needed to add computer hardware, he would negotiate with local retail stores and purchase the lowest cost equipment. If he needed additional communication services, he would go to the local telephone company to add the bandwidth and connectivity he believed he needed.
Starting his sixth year in business, John has over 30 major long-term contracts, a 20,000 square foot data center, over 400 servers; and 100 full-time employees. Additionally, he hosts 50 major business applications for his customers.
The organization configuration is fairly simple. John has set up an extremely flat organization in which the majority (approximately 80%) of the staff are technical or operations support (network, server, applications, operating systems, and database). Additionally, there is one contract, five helpdesk, one project manager, and five administrative support staff. John does all of the marketing and sales and personally negotiates each contract.
Prepare a presentation that outlines Smith’s current state and recommendations for key performance indicators (KPI’s) or metrics for Smith to measure.
In the presentation, include the following:
- Address the purpose and benefit that metrics provide for management and how the business can use metrics to drive improvements.
- Provide recommendations for metrics specific to Smith’s business in at least five of the following categories: customer service, quality, delivery / on-time delivery, cost, responsiveness, communication, project delivery, technology, employee productivity, capacity, etc. Include examples of charts / graphs or the manner in which the metric would be communicated to management and the frequency of reporting. This can include balanced scorecard, management memo’s, daily pulse reporting, monthly operations reporting or any other means which will provide the information in a timely and relevant manner to management.
- Discuss how Smith would track and report on the data needed for each metric as well as the limitations within the current process or assumptions built into the measurement.
- Explain the importance of metrics on customer relationships and satisfaction.