forrester tlp jpg the importance of real time executive dashboards

8/6/2019 Forrester TLP JPG the Importance of Real Time Executive Dashboards

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Executive Summary ..................................................................................................................................................................................................... 2

Competitive Enterprises Require An Efficient IT ......................................................................................................................................... 3

The Major Challenge To IT Efficiency ................................................................................................................................................................ 7

Real-Time Dashboards Are The Key To IT Efficiency ............................................................................................................................. 12

Key Recommendations ........................................................................................................................................................................................... 16

Appendix A: Methodology ..................................................................................................................................................................................... 17

Appendix B: Demographics .................................................................................................................................................................................. 17

Appendix C: Endnotes ............................................................................................................................................................................................. 20

2010, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available

resources. Opinions reflect judgment at the time and are subject to change. Forrester , Technographics, Forrester Wave, RoleView,

TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective

companies. For additional information, go to www.forrester.com. [1-CQNTD8, 1-GXTR1G]
http://www.forrester.com/consulting


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The complexity of IT infrastructures and services is the root cause of the difficulties many IT organizations

experience in managing the performance of critical business services. Using a

technology-component-centric approach in a complex environment leads to a

lack of understanding and cooperation between component teams, a

misunderstanding of business criticality, and delays in identifying the root

cause of performance issues. These are the biggest obstacles that preclude IT

from achieving its efficiency goal.

As 2010 and 2011 corporate objectives are clearly oriented toward a reduction of operational costs and an

improvement in business productivity, the lack of IT efficiency becomes an impediment to corporate goals. This

is due to an inability to share meaningful technical and business information between teams that are too

specialized to have a global view of business services and of all the technologies involved.

In conducting in-depth surveys with 154 IT decision-makers in North America and the UK, Forrester found thatenterprises achieved better IT efficiency and better support for corporate goals by providing integrated, real-

time, and accurate information through the implementation of customizable, real-time dashboards. According to

the IT executives who implemented this type of dashboard, they were able to improve IT efficiency, increase end

user satisfaction with business services, and reduce outages, thus improving business users productivity.

Forresters study yielded the following key findings:

Reducing operational costs is a high-priority objective for enterprises. As IT is a key component of thebusiness operation, it must become more efficient to support the corporate goals in a relatively unstable

economic climate.

The lack of real-time information impacts ITs efficiency. As different technology teams must cooperate toresolve problems in the shortest possible time, the lack of a common view of IT services and the

infrastructures health leads to longer delays and a large consumption of IT resources.

This decreased efficiency compromises ITs ability to support the corporate goals. The consequences ofdifficulties in resolving business service issues are felt not only on IT efficiency, but also on business

productivity and overall revenue.

Real-time executive dashboards help alleviate these issues. Implementing real-time dashboards provides ITand business teams with common, accurate, and timely information. This promotes cooperation between

teams, faster problem resolution, and a more efficient IT overall one that can then participate fully in

reaching the corporate goals.


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Technology capacity and speed are growing at exponential rates, and the unit cost of technology has been

decreasing exponentially in the meantime. This has had consequences for software growth and the creation of

increasingly elaborate and complex business services. A myriad of applications and business services have now

quickly become part of the business fabric of the enterprise, and the complexity of these new applications has

often proved a challenge for IT organizations.

This omnipresence of IT in business activities results in the evolution of the role of IT from a business support

organization to a business service provider. This role change has several implications, among which the more

significant are: 1) the accent on the quality of services provided to the business groups, and 2) the cost of these

services, which are now an integral part of the business bottom line. The Forrester survey shows that corporate

objectives for 2010 and 2011 are:

Lowering the company operational costs. Competition for markets and clients is more intense in a slowlyrecovering economy than ever before.IT improves business processes and consequently businessproductivity. But these improvements cannot be obtained at any cost, and IT operational costs need to be

contained to deliver the full benefits of business process improvements.Acquiring or retaining customers. The quality of service offered, whether through online, Web-basedtransactions or in interactions with employees using business services has to be such that they do not

impact customer satisfaction and, in fact, act as competitive differentiators in acquiring new customers.

Constantly improved quality of service is the key to keeping a business alive.

Improving the quality of products and business processes. In a fast-moving environment, beingcompetitive means that the quality of service should be constantly improved and that IT provides the

necessary agility to sustain process improvements.

Figure 1 confirms that these different enterprise imperatives are actually well supported by a majority of

companies. Even more, our data shows that companies that support these top corporate goals very or extremely

well have a better annual revenue performance. Of those respondents who said they support acquiring and

retaining customers extremely well or very well, 76% earn more than $5 billion USD in total annual revenue,

while only 57% of respondents who support this goal well earn the same in annual revenue. Improving quality

of products and/or processes follows the same trend. Of the respondents who support this goal extremely well

or very well, 72% earn more than $5 billion USD in total annual revenue, while only 60% of those who support

this goal well earn more than $5 billion USD in total annual revenue.


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The obvious consequence of this emphasis on cost reduction and increased service quality is, of course, a call for

a more efficient IT. As shown in Figure 2, a vast majority of IT decision-makers see efficiency as their top

objective.

31%

25%

22%

19%

18%

14%

46%

38%

49%

35%

47%

36%

18%

27%

23%

31%

29%

36%

Lowering the company operatingcosts

Acquiring and retaining customers

Improving quality of productsand/or processes

Driving innovative new market

offerings or business practices

Improving business workforceproductivity

Re-engineering core businessprocesses

Extremely well Very well Well

How well does your organization currently support each of the following corporate goals?


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The dependency on business services provided by IT has dire consequences when the service is interrupted or

its performance quality deteriorates. The company incurs three types of costs in these situations:

Business productivity decreases. Employee hours are lost because it is often impossible to continueworking without business services. In many cases, employees will have to catch up on overtime, which

compounds the productivity loss.

IT resources are wasted. Many IT employees will have to shift from their normal duties to resolve thebusiness service issues. Often, this will cast a blow to IT personnel costs.

Business revenue is lost. If the business service has a direct impact on revenue, as in online commerce, thebusiness revenue lost will not be recoverable.

This is confirmed by the answers to the Forrester survey question in Figure 3. While firms see the decrease in

workforce productivity as the main loss incurred, the importance of these different factors depends on the

enterprise activity, and the respective ranking of losses will vary as a result.

Which of the following initiatives are likely to be your IT organizations major business- or corporate-relatedthemes in 2010? Please select up to three and rank.

48%

16%

10%

8%

6%

6%

1%

16%

18%

11%

17%

9%

22%

2%

12%

14%

14%

19%

8%

19%

8%

Improving the overall efficiencyof IT

Increasing IT capacity/resourcesto drive business innovations

Improving the measurement ofITs impact on business

performance

Increasing the scope of ITscentralized or shared services

Defining a strategy for risk andcompliance

Improving IT development andmanagement processes

Marketing the IT departmentwithin the company

1 2 3


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Complexity of business services and supporting critical applications seems to be the major challenge facing IT

organizations. This complexity comes from two major problems inherent to technology:

The layers of accumulated diversity. IT projects related to architectures or applications and businessservices are discrete events. They are based on the technology available at the time and conclude with that

same technology. As IT technology progress is a quasi continuum, projects are actually technologically

obsolete by the time they enter production. Then the next-generation projects will use the next available

technology, which leaves IT organizations with many different platforms, each with its specific

management constraints and each requiring specific skills. Advances in middleware let us combine these

platforms into composite applications, which add another layer of complexity.

The rate of technology progress. The relationship between technology and IT business services is that of anautocatalytic process. New advances in technology tend to lower the cost/value ratio of business services

and lead to their adoption by enterprises. The revenue from technology thus sold fuels more technology

progress, and the cycle repeats itself. In general, this would not be an issue except that the rate of

technology advances is exponential, which leads to a corresponding exponential growth in desired

43%

27%

25%

3%

2%

High costs due to loss ofbusiness workforce productivity

High IT costs and resources torepair issues and problems

High costs due to irrecoverableloss of business

Other

Dont know

Ifyou were to experience critical application performance issues, what do you believe are thebusiness consequences?


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business services. The second element of complexity is thus the rate at which new services have to be

developed and deployed.

The consequence is an exponential growth in software size over the past few years and a considerable increase

in multi-tiered business services, which combine several applications located on different platforms.1

Business service complexity is thus a major issue for IT organizations aiming for a more efficient IT, as shown in

Figure 4.

As business service complexity increases, the distance between business quality-of-service requirements and IT

operational capabilities becomes a chasm. From the well-known, mastered, and predictable terminal-to-server

model, IT has moved to complex composite applications stitching together different technologies to create more

complete and effective services. Each evolution has brought another level of complexity and increased the

obsolescence of traditional IT management processes and tools, especially in the area of performance

prediction. At the same time, as IT is a key differentiator in business competition, the capability to sustain

service quality and IT efficiency becomes a forefront issue. It is no longer enough to capture data and report it

27%

25%

17%

13%

12%

45%

40%

39%

37%

32%

23%

26%

35%

35%

33%

Maintaining service quality

Containing global IT costs

Containing personnel costs

Limiting the bu dget for applicationimprovements

Increasing downtime andbrownouts

Significant impact A lot of impact Impact

What level of impact does increased complexity of your infrastructure and business services have on the

following?


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it is now necessary to integrate and correlate infrastructure and performance information into a format that is

conducive to a rapid resolution of business service issues. These issues are themselves becoming more complex,

compounded by a new emphasis on additional IT costs such as floor space, power, and cooling. Accurate and up-

to-date information is not only a necessity for operational teams, it has also become vital for IT decision-makers.

Performance problems alone are rapidly becoming a major source of headaches for IT operation managers.

Business productivity increases have been pegged on IT and its ubiquitous presence in the enterprise. The

emphasis on performance has been reinforced by the direct linkage of poor response times and availability to

employee productivity and business losses. Poor performances have grown from a subjective user satisfaction

problem into one quantifiable in lost revenue and lost productivity.

While everyone is struggling to understand the why of performance issues, the advent of products able to

monitor networks, servers, applications, and database performance in real time appears to be the panacea. After

the dust has settled, IT operation managers often come to realize that in a complex and tightly coupled

application environment, working on technology silos and removing one technology bottleneck at a time is the

shortest way to finding another one and that the root cause analysis of performance problems requires a holisticview of IT infrastructures. Since the shotgun approach of throwing hardware at problems may be very short

lived in an economic downturn, IT operation management demands evolve from data and event reporting at the

component level to integrated, real-time reporting as a support for decision-making, problem identification, and

resolution. The absence of real-time, integrated information is considered a major issue by the respondents to

Forresters survey, as shown in Figure 5.

Yes75%

No18%

Dont know7%

In your opinion, would this lack of accurate and real-time information be a major obstacle inreaching your goal of IT efficiency?


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The lack of integrated, real-time reporting would prevent IT organizations from achieving their efficiency goals

in todays complex application environment. The lack of real-time information also impacts the decision-making

ability of the IT organization as well as its relationship with the business. For example, the inability to control

service levels is a direct consequence of the lack of real-time information, as shown in Figure 6.

The lack of real-time, integrated information has a direct effect on IT efficiency. In complex and tightly coupled

systems such as multi-tiered applications, the availability of a single, integrated view of business services

critical performance indicators is directly linked to the IT organization s capability to reach a decision and tackle

immediate problems. As an example, Figure 7 shows how the number of people involved in resolving

performance issues is impacted: 44% of IT decision-makers surveyed say that 10 or more persons are involved

in such efforts.

This is a direct consequence of each technology management team coming to the table with their own set of

data, which of course does not align with their colleagues data sets. Specialized skills are immensely valuable in

a complex environment, but they often come at odds with one another. Some kind of arbitrage is needed to

19%

18%

12%

46%

42%

41%

23%

29%

29%

Without accurate and real-timeinformation we cannot control our

service levels

Without accurate and real-timeinformation we cannot manageour IT organization efficiently

Without accurate and real-timeinformation we cannot negotiate

effectively with our businesspartners

Completely agree Agree Somewhat agree

On a scale of 1 to 5 where 1 = Completely disagree and 5 = Completely agree, please indicate

how strongly you agree with each of the following statements?


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make these teams more effective in collaborating with one another toward a common goal. IT will eventually

become more efficient and reduce the resources used in these difficult situations by being able to share a

common, integrated representation of information related to critical business services.

Correlating the results shown in Figure 7 with those in Figure 8 demonstrates that adding resources does not

speed up problem resolution. While 50% of respondents resolve 80 to 100% of their performance issues within

24 hours which is certainly not a stellar performance 26% resolve only 60% to 80%, and 24% resolve less,

and sometimes far less, than 60% of their issues in 24 hours. The business impact of such service disruption is

huge: the cost of employees time lost, IT resources used, and business revenue lost can escalate quickly to very

substantial amounts.

One person1%

Two to f ivepeople

31%

Six to ninepeople

22%

10 or morepeople

44%

Dont know3%

How many people in your IT organization are typically involved in identifying and resolving aperformance issue?


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0%

2%

4%

6%

8%

10%

12%

14%

5 15 25 33 40 50 65 70 76 85 92 95 98 100

Ofthe application performance problems reported to your organization, what percentage are youable to satisfactorily diagnose and resolve within 24 hours?

Percentage ofrespondents

Percentage of application performance problems diagnosed andresolved within 24 hours


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As shown in the previous chapter, the focus ofoperational management must shift from managing the

configurationand health of infrastructure devices to maintaining the service quality required to supportthe

business processes.

The heavy dependency of business on IT has reinforced this trend

by showing the direct

impact of poor infrastructure performances on revenue.

In many instances the management of business services still uses a bottom-up approach. The current

perspective is often of infrastructure silos, such as network, servers, or databases. The most advanced business

users, however, have acknowledged that the tighter integration of business and IT requires a top-down

approach, which provides a view that integrates IT operational parameters with business-relevant information

such as business services. This opens a new and broader concept on top of traditional, technology-oriented

management: the management of IT infrastructure from a business standpoint. The idea is to understand and

manage from the perspective of the infrastructures performance impact on the business process rather than

from the assumption that a healthy infrastructure implies a healthy business service. This is a significant

departure from the typical operation management and signals the beginning of a new wave of solutions thatinclude real-time, integrated, and customized management dashboards.

Real-time management dashboards effectively play an important role in this business-oriented view of IT. By

integrating management information from many different sources, real-time dashboards provide a panoramic

view of business services and of the infrastructure components supporting the delivery of these services. As

demonstrated by Forresters survey results, the lack of integrated, real-time information has the following

consequences:

The inability to control service levels. Because business services are not directly visible in silo-orientedsolutions, there is no possibility for IT and business executives to agree on business service levels and

consequently to optimize the delivery of business services to make IT more efficient.

The inability to resolve issues in time. The difficulties of management teams to come to terms with oneanothers information lead to a waste of IT resources and to delays in resolving service quality issues. This

directly impacts both business productivity and revenue as well as IT costs.

Our conclusion is that IT cannot reach its efficiency goals without the right business service information being

available for sharing between business and IT technology teams (see Figure 9).


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Enterprises are increasingly aware of the need for integrated and customizable real-time dashboards. In manyIT organizations, the creation of such dashboards is now well under way (see Figure 10).

25%

21%

19%

17%

42%

54%

45%

38%

26%

15%

26%

32%

Reducing fi refighting in resolvingapplication problems

Improving service levels andproblem remediation

Making IT more efficient

The business workforceproductivity through downtime

and brownout prevention

Sign ificant impact/improvement A lot of impact/improvement Impact/improvement

What impact would an accurate, real-time, customized dashboard have on the following?


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Business-oriented IT management and the availability of real-time management dashboards emphasize the

integration and the interaction of roles between the business and IT. Typically, activities that were once

considered business independent, such as infrastructure monitoring, now have both a strategic and a technical

role to play in the enterprise, as they participate in higher-level reporting. This introduces new decision-makers

into the IT management process because each decision is now balanced against the broad picture of the IT

strategy and no longer solely against IT operational and technical requirements.

IT organizations that implemented integrated, real-time dashboards are now in a better position to reach their

efficiency objectives and satisfy the enterprise requirements of competitiveness and efficiency (see Figure 11).

Yes36%

No58%

Don't know6%

Has your organization implemented a customized, real-time executive dashboard?


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67%

64%

53%

49%

40%

38%

4%

Improving IT efficiency

Increased user satisfaction

Reduced impact on business due to outagereduction

Help build a business case for future ITinvestments

Less resources used to f irefightperformance issues

Increased mean time between failures(downtime and brownouts)

Other

In your opinion, what are the major benefits of an accurate, real-time executive dashboard?


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In this study, Forrester conducted an online survey of 154 organizations in North America and the United

Kingdom to evaluate the importance of real-time executive dashboards. Survey participants included IT

decision-makers and IT operation executives. Questions provided to the participants asked about their

corporate goals, the role of IT in achieving these goals, the challenges in meeting the resulting IT objectives, and

the best solution to overcome these challenges. The study began in March 2010 and was completed in August

2010.

United States68%

Canada

1%

United Kingdom31%

Where is your company headquartered?

Very large:between 5,000 and19,999 employees

24%

Global 2000 orover 20,000employees

76%

Which of the following most closely describesyour companys size?


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9%

23%

68%

Senior-most IT decision-maker in thecompany

Executive in IT

Manager or director of IT reporting toan executive in IT

Which of the following most closely describes your job level?


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23%

18%

16%

12%

6%

5%

4%

3%

14%

Manufacturing

Financial services and insurance

Business/professional services

Utilities and telecommunications

Retail and wholesale

Media, entertainment, andleisure

Transportation and logistics

Public sector (government, etc.)

Other

Which of the following most closely describes your industry?


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1 See Watts Humphreys columns:

http://www.sei.cmu.edu/library/abstracts/newsletters/wattsnewcompiled.cfm?DCSext.abstractsource=Relate

dLinks

3%

13%

15%

69%

$500 million to $999 million USD

$1 billion to $2.49 billion USD

$2.5 billion to $5 billion USD

More than US $5 billion USD

Which of the following most closely describes your companys total annual revenue?

forrester tlp jpg the importance of real time executive dashboards

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