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May 28, 2015

How We Improve Using Metrics

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The challenge we face as small business owners is knowing all the moving parts in our business and how each component can impact the top and bottom line. Developing metrics around the business model is extremely important so we can make decisions based on the numbers and not necessarily on the feelings we get.

If we zoom out and look at an I.T. company from a 30,000ft perspective we have many factors to consider when calculating metrics such as the operations, revenue, expenses, profit, the organization, sales, etc. We could spend days diving into all the different facets of an I.T. company and would love to do that, but today we want to go a few layers deep into the operations division.

The nuts and bolts of an operations team in an I.T. company consists of 6 core delivery areas and it’s possible that each delivery area can have more than one person. For example, we have support desk coordinators, network administrators, virtual chief information officers, technology managers, project managers and the on-boarding crew. We have to understand how each role is performing by reviewing all their different levers and how much each role costs in a per month per seat format or else we truly don’t understand the noise behind the numbers, the hole in the bucket, or any unrealized profitability and that unfortunately can lead to challenging problems when it’s already too late to bounce back quickly from.

As mentioned above when we calculate our operations metrics, we must understand per month per seat cost and the de facto leverage guidelines and how we compare to them in all 6 delivery areas or else we cannot see gross margin metrics which is very important in the grand scheme of things. If we focus just on the support desk coordinator role we can shed some light on how this roll can impact the entire company in a good or bad way.

If our cost per month per seat for our support desk coordinator role was calculated at $2.41 in an example we came up with, here is how we would arrive at that result:
How We Improve Using Metrics SupportDeskGrossMargin

Other metrics we review for our support desk coordinator role to improve our business is our average response and resolution times. We gather the metrics each week and have it generate a monthly and yearly summary. Example:
How We Improve Using Metrics SDMetrics

We also keep a real time support desk dashboard active:
How We Improve Using Metrics SDDashboard1

By having these granular metrics across the different divisions in our business, especially the 6 core delivery areas in operations, we can forecast change, improve our best practices and processes and ultimately provide better support to our customers. In our support desk example we want to demonstrate that we have the ability to understand what is happening in all the other 5 delivery areas based on how the numbers fluctuate. Long story short, we strive to improve and become world class every day and knowing our numbers is a small part to that promise.


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