Top 25 IT KPI Metrics

If you've been in IT for a while, whether as part of an internal team, a Managed IT Service Provider or outsourced professional, you've likely encountered scenarios where some colleagues in other departments question the tangible value of certain IT systems. See, for departments such as sales, marketing, finance, HR, etc, it's often far more straightforward for them to demonstrate results. The sales team can say «look, this month's sales have increased by 15%». The finance folks can show how they have reduced overall expenditures. But what about IT? How can you demonstrate to them the value we bring?

While we completely understand the worth we provide, many non-IT people still find it difficult to grasp. To some degree, that's understandable. One reason is the lack of measurement. To make an impactful change and show results you need to use KPI metrics.

Let's discuss this.

What are IT KPI metrics?

IT KPI, or key performance indicator metrics are a set of measurements used to evaluate the performance and effectiveness of an organization's information technology (IT) systems and processes. They are quite instrumental in helping to identify areas where improvements can be made.

These metrics can also be used as a guide for setting goals and targets for IT initiatives.

What is the purpose of IT KPIs?

The critical importance of IT KPIs is certainly to demonstrate the value of IT to the organization.

Here is a complete breakdown of the key advantages that IT KPIs deliver:

1. Performance measurement

The number one benefit of IT KPIs is the ability to provide a way to measure the performance and effectiveness of technology. It’s easy to identify areas where you are excelling and areas where improvement is needed.

For example, you can track the mean time to resolve a service ticket as a KPI to measure the efficiency of the IT support team. This will help you to determine if the support team is giving satisfactory service to customers. So you really do not need to spend a lot of time following up with customers to find out their level of satisfaction. Simply set up a clear support KPI and with that you can see the performance in real-time.

2. Value communication

IT KPIs provide a means to communicate the value of IT to the rest of the organization. Instead of struggling to explain IT concepts especially to no-IT colleagues or decision makers, simply use metrics to demonstrate the value of whatever initiative the IT department is trying to sell. For example, you might track the return on investment (ROI) of IT projects as a KPI to show the financial value of the various IT projects to the organization.

3. Risk management

IT KPIs are also important for identifying and managing risk. You can achieve this by tracking KPIs related to security, compliance, and availability. This way, you can easily identify and address potential issues before they become critical.

For example, you might track the number of successful and unsuccessful login attempts as a KPI to measure the effectiveness of security measures.

4. Vendor performance monitoring

KPIs can be very useful for monitoring and managing the performance of IT vendors including service providers. It’s easy to agree theoretically with vendors on what their roles are. But how do you determine if those roles are delivering any value? You can agree on some key KPIs with your vendors then use them to measure the vendor’s performance against those to ensure you are getting the level of service that your company is paying for.

Let’s say you are using a managed cloud services provider. You can track the availability of the most critical cloud-based services as a KPI to measure the reliability of the provider.

5. IT budgeting and planning

Tracking past performance against budgeted laid out KPIs can provide important insights to inform decisions about future IT investments.

For example, you might track the number of software licenses used as a KPI to forecast future software needs and budget accordingly.

Also Read: Importance of technology in the workplace

Top 25 IT KPI metrics you should be tracking

We believe that these KPIs are the most important to track in any IT environment. To make it easier, we have groped them into categories that mirror a typical organization’s IT environment.

Category 1: Technical metrics

Just as the name suggests, technical metrics are those that measure the technical side of the organization’s IT systems, both hardware and software including applications. These metrics are indeed the heart and soul of the IT function, serving to show if all systems are performing as expected. With technical metrics, you can easily tell things like availability, uptime, down time, speed, etc.

There are two core levels of metrics that should be tracked in a typical system that encompasses many components. At the highest level, IT teams should track metrics that give them an overall view of the system's health and performance. These metrics can give teams an idea of how well the system is functioning as a whole and whether there are any major issues that need to be addressed.

At a more granular level, IT teams should also track metrics that give them visibility into the performance of individual components within the system. These metrics can help teams identify issues with specific components and take action to address them.

1. System health metrics: they give an overall view of the system's performance

• Availability: This metric measures the percentage of time that a system is available and able to handle requests. High availability is important for systems that are critical to business operations.
• Response time: Measures the amount of time it takes for a system to respond to a request. High response time can indicate that the system is running slowly and may need additional resources or optimization.
• Error rate: Measures the number of errors that occur on a system, for example API errors. High error rates can indicate that the system is experiencing problems.
• Latency: The amount of time it takes for data to be transferred from one point to another. High latency can indicate that the system may be experiencing a bottleneck.
• Concurrent connections: Measures the number of connections that are currently active on a system. High concurrent connections can indicate that the system may be experiencing a bottleneck.

2. Visibility metrics: they give visibility into the performance of individual components within the system

• CPU utilization: This metric measures the amount of processing power being used by the system at any given time. High CPU utilization can indicate that the system is running at capacity.
• Memory usage: The amount of RAM being used by the system. High memory usage can indicate that the system may be running out of memory.
• Disk usage: The amount of storage space being used on a system's hard drive (s). High disk usage can indicate that the system may be running out of storage space.
• Network traffic: The amount of data being transferred over a network. High network traffic can indicate that the system may be experiencing a bottleneck.
• System logs: In case of any error or system crash, this metric will help to diagnose the issue and understand the root cause.

Category 2: Financial metrics

This category is all about measuring the financial performance and impact of IT investments and initiatives. These metrics provide insight into the costs and benefits of IT projects, and help organizations make informed decisions about where to allocate resources and IT budget. They cover a wide range of areas, and these are the core ones:

3. Cost per user

This measures the cost of IT services provided to each individual user. To calculate this KPI, you would need to gather the following data:

1. Total cost of IT services: This includes all costs associated with providing the IT services, such as hardware, software.
2. Number of users: Number of individuals who are using the IT services provided by the organization.

Divide the total cost of IT services by the number of users. For example, if the total cost of IT services is $100,000 and there are 1,000 users, the cost per user would be $100 ($100,000 / 1,000).

It's important to note that the cost per user metric should be reviewed on a regular basis and adjustments should be made accordingly. It's also important to measure the cost per user by different types of services provided, this way it's possible to have a better understanding of which services are more cost-effective and which ones are not.

Additionally, it's also useful to benchmark the cost per user with industry standards or similar organizations.

4. CAPEX to OPEX ratio

Capital Expenditure (CAPEX) to Operating Expenditure (OPEX) ratio basically refers to the proportion of IT expenses that are allocated to capital expenditures (such as hardware and software purchases) versus operating expenses (such as maintenance and support).

The CAPEX to OPEX ratio can be used to measure the proportion of funds being spent on long-term IT investments (CAPEX) versus the funds being spent on ongoing IT operations and maintenance (OPEX).

A higher ratio in this context indicates that a greater proportion of funds are being invested in long-term IT projects, such as upgrading infrastructure or implementing new software systems, while a lower ratio indicates that more funds are being allocated towards maintaining and running existing IT systems.

5. Money saved in negotiations

This metric measures the amount of money that is saved through negotiations with vendors, suppliers, or other partners. A practical example would be determining the money saved in negotiations with a software vendor by comparing the original contract price to the final price after negotiation, and expressing the savings as a monetary value.

6. Return on Investment (ROI)

Return on Investment (ROI) is a financial measure of the efficiency of an investment or project. In the context of Information Technology, it is a measure of the returns generated by an IT investment compared to the costs associated with it. To calculate the ROI for an IT project, the following formula can be used:

ROI = (Net Benefit — Investment Cost) / Investment Cost

Where:

• Net Benefit is the total value of benefits generated by the IT project, such as increased revenue, reduced costs, or improved efficiency.
• Investment Cost is the total cost of the IT project, including hardware, software, labor, and other expenses.

To measure the ROI as an IT KPI, you can track the net benefit and investment cost of the IT project over time, and calculate the ROI at regular intervals. This will give you an idea of the progress of the project, and whether or not it is meeting the expected return on investment.

7. Total Cost of Ownership (TCO)

A measure of the total costs associated with owning and operating a particular IT asset or system over its entire lifecycle. The following costs should be considered:

• Acquisition costs: the cost of purchasing or developing the IT asset or system, including hardware, software, and labor costs
• Operating costs: the costs associated with running and maintaining the IT asset or system, including energy costs, maintenance, and support
• Upgrade costs: the costs of upgrading or replacing the IT asset
• Retirement costs: the costs associated with disposing or replacing the IT asset at the end of its lifecycle

8. Payback Period

Payback period is the amount of time it takes for an IT investment or project to pay for itself. You will need to know the initial investment cost and the expected annual savings or income generated by the investment. Once you have this information, you can use the following formula:

Payback Period = Initial Investment Cost / Annual Savings or Income

For example, let's say your company is considering investing in a new software system that costs $100,000 and is expected to generate annual savings of $25,000. The payback period for this investment would be:

Payback Period = $100,000 / $25,000 = 4 years

In this example, the payback period is 4 years, meaning it will take4 years for the company to recoup its initial investment.

It's important to note that Payback Period is a simple and quick measure of an investment but it doesn't take into account the time value of money. As such, it's not the best measure of the profitability of an investment. Alternatives include Net Present Value (NPV) or Internal Rate of Return (IRR).

9. Spend vs. Budget

This metric measures the actual IT expenses against the IT budgeting framework or planned expenses. It is a measure of cost control and helps organizations understand if they are staying on budget or overspending.

Start by determining the total budgeted spending for a given period (e.g. a quarter or a year) and then compare it to the actual spending for that same period. The difference between the two amounts represents the deviation from the plan.

For example, let's say that the IT department has a budget of $1,000,000 for the first quarter of the year. After the quarter is over, the department has spent $950,000. The Spend vs. Plan KPI would be calculated as follows:

$950,000 (actual spend) — $1,000,000 (budgeted spend) = -$50,000 (deviation from plan)

Category 3: Security metrics

Security is a critical aspect of any organization, as it helps protect sensitive data and systems from cyber threats. To effectively manage and improve IT security, organizations use key performance indicators (KPIs) to measure and track their security performance. The KPIs listed above fall under the security category and include:

10. Security incident response time

How much time does it take to respond to a security incident, such as a data breach or cyber attack?

Simply measure the time from when an incident is first detected until it is fully resolved.

Here's an example:

• Incident detection time: 10:00 AM
• Incident containment time: 10:30 AM
• Incident resolution time: 11:00 AM

To calculate the incident response time, you would subtract the incident detection time from the incident resolution time:

Incident response time = 11:00 AM — 10:00 AM = 1 hour

Note that this is a very basic example, and in practice there are many factors that can affect incident response time, such as the severity of the incident, the complexity of the organization's IT infrastructure, and the availability of incident response personnel.

11. Regulatory compliance rate

Measures an organization's adherence to industry-specific security regulations and standards, such as HIPAA or PCI-DSS.

An example of this metric could be the percentage of security controls that have been implemented and are compliant with the PCI-DSS standard.

12. Vulnerability

A measurement of the ability to identify, prioritize, and remediate security vulnerabilities. For example, what is the percentage of identified vulnerabilities that have been unearthed and patched within a specific timeframe.

Also Read: Vulnerability management program

13. Endpoint security

This measures the company’s ability to secure its endpoints, including laptops, desktops, and mobile devices.

For instance, what is the percentage of endpoints that are running up-to-date anti-virus/anti-malware software and have been scanned for vulnerabilities in the last month.

Read more about Endpoint Security.

14. Training and awareness rate

This measures the ability to train employees on security best practices and policies. For example, how many employees have completed cyber security awareness training in the last quarter.

Check this basic illustration:

• Number of employees in the organization: 1000
• Number of employees who have completed security training: 800
• Number of employees who passed the security awareness test: 780

To calculate the training and awareness rate, you could use different ways, depending on the organization's goals, but one possible way is to calculate the percentage of employees who have completed security training and passed the security awareness test:

Training and awareness rate = (780 / 1000) x 100 = 78%

15. Backup success rate

Backup is one of the most critical security measures in an organization. It’s one thing to backup, and it’s another for the backup to be successful. Sometimes backups fail and it’s important there the backup process is measured.

You always need to understand the percentage of backups that are successful and can be restored without errors.

Also Read: Popular backup types

16. Patch success rate

Evaluates the success rate of the organization's patch management processes, including the timely application of software updates and patches. For example, what is the percentage of critical vulnerabilities that have been patched within a specific timeframe.

Category 4: Service/operational metrics

Operational KPIs are those that relate to the quality levels of IT operations and how they affect service delivery to customers, internal teams and even partners.

These are the key KPI metrics in this category:

17. Mean Time to Resolution (MTTR)

This KPI measures the average amount of time it takes for a problem to be resolved, from the time it is reported to the time it is fixed.

For example, how long does it take for IT support to resolve a customer's issue with a malfunctioning software application.

18. Network uptime

It’s every IT manager's dream to maintain consistent uptime. Simply compare the length of time a system is up vs when it’s down.

For example, how often is the website up and running properly without any issues such as maintenance or technical problems?

Measure the amount of time that the network is up and running and subtract that from the total amount of time available.

Simple illustration:

• Total amount of time available for the network to be up and running in a month: 720 hours (30 days)
• Amount of time the network was down: 12 hours

To calculate the network uptime rate, you would subtract the amount of time the network was down from the total amount of time available:

Network uptime rate = (720 — 12) / 720 = 98.3%

Also Read: The cost of downtime

19. Project success rate

This KPI measures the percentage of completed projects that meet or exceed their defined goals and objectives. To measure it, you would need to track the progress of each project, and then evaluate if the project was completed successfully based on pre-defined success criteria.

For example, a project to develop a new software application might be considered successful if it is delivered on time, within budget, and meets all functional requirements.

20. First contact resolution rate

First contact means the very first time that the customer initiates communication with support regarding an issue. So this KPI measures the percentage of customer service interactions that are resolved on the first contact.

You would need to track and record the number of customer interactions that were resolved on the first contact and divide it by the total number of interactions.

If a customer service representative receives 100 calls and is able to resolve 80 of them on the first call, the first contact resolution rate for that agent would be 80%. Do this for all the agents to arrive at the company’s average first contact resolution rate.

You might be interested in: Helpdesk vs Service Desk: What is the difference?

21. Help Desk Ticket Volume

What is the number of help desk tickets received by the IT department? If the tickets are so many then it means that some IT issues are emerging somewhere that need to be addressed urgently.

A low volume of help desk tickets is good news, as it means things are working optimally and so users are probably having a good experience with your services. But hey, it could also mean there’s no user, so please be sure to counter check with real-time user metrics.

Also read: Top 7 IT Help Desk Best Practices

22. SLA compliance

Is the IT department meeting the service level agreements it has established with its customers or partners? To answer this, track and record the number of SLA breaches, subtract this number from the total SLAs and divide the difference by the total number of SLAs.

For example, if your company has 100 SLAs and 10 of them were breached, the SLA hit rate would be 90%

23. Time saved

They say time is precious — once it's gone, it's gone forever. The more time you can save, the more you can do with it. This KPI will measure the amount of time saved by introducing a new process or technology. It's a simple process — just keep track of the time it takes to finish a task or process before and after implementing some IT tools, and calculate the difference.

For instance, if a company automates a process and saves an hour each day, that would total 7 hours per week or 365 hours every year!

Also read: Best PSA software for MSPs

24. RPO

Recovery Point Objective (RPO): The maximum acceptable amount of data loss that an organization can tolerate in case of a disaster. Determine the point in time where you would want your data to be restored after a disaster, and compare it to the actual point in time that the data is restored.

25. RTO

Recovery Time Objective (RTO): The maximum acceptable amount of time that an organization can tolerate to be without access to its IT systems and data in case of a disaster. Determine the time frame in which you expect your IT systems and data to be restored after a disaster, and compare it to the actual time that the IT systems and data are restored.

Further Reading: RPO and RTO in disaster recovery

Who uses the IT KPI metrics?

These metrics can be used by a variety of leaders within an organization to evaluate the performance of the IT department and make data-driven decisions. Some of the leaders who can use them include:

Takeaway

Not all the KPIs here may be relevant or applicable to every organization. As a result, it would be helpful to narrow down to the KPIs that make the most sense for your company’s specific objectives. This is the best way to ensure that the metrics you are measuring actually provide meaningful insights and actionable information.

You can also tailor these KPIs to help you realize even more granular and specific insights. Remember the ultimate objective is to not only maximize but also demonstrate the true value of the entire IT infrastructure. Constantly monitor the metrics, adjust where necessary, add some more, or replace some.