Have you ever tried to lose weight?
Maybe you stepped on the scale each morning, hoping to see a lower number than the day before. You watched what you ate, tracked your workouts, and adjusted your habits accordingly. Depending on your mindset, you may have even logged specific metrics to gauge progress.
The same principle applies to IT departments. Just as one tracks their fitness advancement with pounds, inches, and body mass index, small to medium-sized enterprises (SMEs) often monitor Key Performance Indicators (KPIs) to measure success and identify areas for improvement.
In this article, we’ll explore some of the most useful KPIs for IT departments.
What Are IT KPIs (and Why Do They Matter)?
KPIs are measurements that gauge the success and effectiveness of business strategies. They indicate performance with respect to plans and expectations.
KPIs typically include a mix of that help IT managers achieve targets on time and on budget. Before we dive into our recommended IT KPIs, let’s review the benefits of tracking them:
Monitor Financial Returns
Small businesses typically have limited resources necessitating a stronger urgency to yield positive returns. SMEs that monitor how their IT investments contribute to financial performance, such as return on investment (ROI) or revenue growth, can evaluate their IT projects’ effectiveness and make informed decisions about future investments.
Unfortunately, it isn’t always possible to match IT initiatives with definitive ROIs., the average cost of a data breach is more than $4 million globally and more than $9 million in the United States.
Investing in cybersecurity initiatives like multi-factor authentication (MFA), patch management, and least privilege access may end up saving unrecognizable amounts in the long-run.
Track Expenses
It’s no secret that IT costs can add up quickly. The price of hardware, software, repairs, and overhead amounts to a whopping per employee on average for mid-sized companies. Put simply, monitoring KPIs related to IT costs is just good business budgeting.
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Decision-Making
Measuring KPIs provides objective data that helps SMEs make informed decisions on resource allocation, staffing, and process improvement. It helps identify areas of strength and weakness in IT operations and prioritize actions to improve. For example, if a KPI related to system uptime is consistently below the target, the business may decide to invest in additional infrastructure or improve maintenance processes to improve it.
Performance Improvement
IT teams that monitor KPIs are better suited to set performance goals and track their progress. By identifying areas for improvement and implementing strategies to address them, SMEs can improve their IT operations and better support overall business objectives.
Improve Customer Satisfaction
IT plays a vital role in supporting customer-facing activities such as e-commerce or customer service. By monitoring KPIs related to customer satisfaction, such as average response time or first call resolution, SMEs can ensure that their IT operations meet their customers’ needs and improve their overall satisfaction. This helps build customer loyalty and increase retention.
11 Essential IT KPIs for SMEs to Track
In business, there are as many measurements as there are variables; SMEs can easily get confused by the hundreds of KPIs available for tracking. Instead of monitoring a large number of KPIs, SMEs should focus on those that help achieve core business objectives.
For instance, suppose Grocery Republic, a small e-commerce business, is aiming to double revenue next quarter. It could track a variety of KPIs, such as web traffic, bounce rates, conversion rates, customer acquisition cost, customer lifetime value, etc. While all of these are important, not all are closely aligned with their core objective of revenue growth.
Grocery Republic is most likely going to be better off tracking the average order value, the number of repeat customers, and the conversion rate of their most popular product category.
Focusing on these KPIs puts the business in a better position to make more informed decisions such as offering promotions on popular products or improving the checkout process to increase conversion rates. With this in mind, choose your KPIs according to your unique goals.
Below are the KPIs we think IT departments most benefit from tracking:
1. IT Return on Investment
For SMEs, every dollar counts. So, investing money into IT projects that won’t pay for themselves and eventually boost profits isn’t wise.
helps evaluate whether your investments are generating enough revenue to cover the costs. For example, say you purchase a new software tool that’s supposed to boost efficiency and cut costs.
A few months down the line, determine if the actual cost savings are meeting or exceeding the initial investment. If you’re not seeing the expected returns, look into better alternatives and process improvements to remedy the situation.
2. Projects Delivered on Budget
SMEs typically operate with limited financial resources, making it exceedingly important that projects don’t overrun expected costs.
Tracking projects delivered on budget provides SMEs with valuable insights into their financial health. Keeping a close eye on project costs shines a light on areas where you could implement cost management practices, streamline processes, and reduce waste.
It’s also crucial to recognize that there could be unforeseen circumstances that impact a project’s budget. Plan for contingencies and incorporate a buffer into the budget to account for unexpected costs. Manage the buffer to ensure it doesn’t negatively impact profitability.
3. IT Spend vs. Plan
Admins must routinely assess the efficiency of their IT projects and the financial control they have over them. If IT spending consistently exceeds planning, expect increased costs, reduced profitability, and a negative impact on business performance.
Unfortunately, this necessitates reevaluating project priorities, reducing scope, or implementing cost-saving measures. Conversely, when spending consistently falls way below projections, it may suggest the IT team isn’t fully utilizing the resources available to them.
4. MTTR (Mean Time to Resolve)
Customer satisfaction has never been more crucial to business longevity. With more options than ever before, IT departments must prioritize resolution times.
is a KPI that tracks how quickly IT teams respond to customer requests and resolve them. Monitoring MTTR provides insight into inefficiencies or bottlenecks in your IT support process. For example, if MTTR is consistently high for certain types of issues, it may indicate gaps in staff training or a lack of resources.
Further, tracking MTTR helps set realistic expectations for customers and stakeholders. Knowing how long it takes on average to resolve a particular issue helps IT workers communicate more effectively with customers about when they can expect their issue to be resolved. In turn, customers feel their concerns are being taken seriously.
5. Server Downtime and Uptime
For SMEs that rely heavily on their IT infrastructure, server uptime is critical for the smooth operation of their business. When servers go down, employees cannot work, customers cannot access services, and. That’s why monitoring uptime and downtime is an essential KPI for SMEs to increase reliability.
For example, a server that experiences occasional spikes in CPU utilization may be approaching its capacity limit and could fail if the load increases further. Knowing this information, an IT admin could take corrective action before the server goes down, such as upgrading hardware or redistributing workloads.
Regularly monitoring uptime also helps IT teams improve their infrastructure for better performance and reliability. When parts of the infrastructure are experiencing frequent downtime or performance issues, they can take steps to upgrade, replace, or optimize those components.
SMEs also stand a better chance of demonstrating their reliability by using the information gained from this KPI to support their disaster recovery and business continuity plans. Tracking uptime also reveals which services are critical to business operations and which you should prioritize for backup and recovery in the event of a disaster or outage.
6. Total Ticket vs. Open Ticket
gives SMEs insight into the efficiency of their IT support or customer service operations. A low ratio indicates that the business is efficiently resolving issues and keeping the number of open tickets low.
A high ratio, on the other hand, indicates that the business may be struggling to keep up with the volume of issues or is experiencing delays in issue resolution.
Tracking total tickets versus open tickets helps point out recurring issues or trends that may be impacting multiple customers or employees. Analyze the types of issues reported and the frequency with which they occur to take corrective actions that prevent recurrence.
7. Mean Time Between Failure (MTBF)
Mean Time Between Failure (MTBF) is an essential KPI for measuring equipment reliability. MTBF,, is the average time that a piece of equipment or machinery operates before experiencing a failure.
SMEs should strive to increase MTBF because it indicates that their equipment or machinery is operating reliably, with fewer failures and less downtime. A high MTBF means that the business can operate more efficiently, with fewer interruptions to service delivery, and lower maintenance costs.
If MTBF is consistently low for a particular piece of equipment, it indicates the equipment is approaching the end of its useful life. Alternatively, there might be an underlying maintenance or operational issue that needs attention.
Monitoring MTBF provides SMEs with the information they need for maintenance, replacement schedules, and avoiding system failure or avoidable downtimes.
8. User Lifetime Value
User/Customer Lifetime Value is the total amount of revenue a business expects to generate from a customer as a long-term client. This KPI is critical for tracking the relative importance of clients for the business, as well as overall financial success.
SMEs that measure their customers’ lifetime value can quantify the worth of their high-value customers and prioritize their efforts to. User lifetime value also helps businesses understand the amount they can afford to spend on customer acquisition.
An SME may forecast part of its future revenue by calculating the amount of revenue it can expect to generate from its current customer base. This not only aids marketing and sales strategies but helps to inform decisions on product development, pricing, and other key business areas.
9. Stakeholder Satisfaction Ratings
Happy clients are more likely to stick around and be repeat customers. That’s why is super important for SMEs. Gauge customer satisfaction by asking them to rate your services and point out how you could better serve them.
Given that it costs less to retain existing customers than it does to acquire new ones, always strive to maintain high satisfaction scores.
A corollary to high satisfaction scores is that potential customers are more likely to employ your services if they can see positive reviews. Plus, you’re bound to get more referrals, both by word of mouth and on internet review sites.
10. Rate of Innovation
In today’s world, innovation is essential to stay relevant, competitive, and profitable. This is especially true for SMEs facing tough competition from larger companies. They must that set them apart from their competitors to thrive.
Innovation, however, goes beyond developing new products or services; it’s about creating a company culture that encourages creativity and rewards experimentation. But how do you measure something as intangible as innovation efforts?
Tracking KPIs like the number of new ideas generated, the percentage of revenue from new products/services, and the speed at which you bring them to market are a great place to start.
11. Talent Turnover
Employee turnover is a significant expense for SMEs, especially when the business is growing and expanding. In fact, a indicated that medium-sized businesses spent an average of $1.5 million on employee training in 2022.
Moreover, when talented employees leave, they may join a competitor, taking their knowledge and experience with them. This puts the company at a competitive disadvantage, as the competitors can leverage this knowledge to gain an edge in the market.
For this reason, it’s essential to track your talent turnover rate and keep it low. High turnover rates suggest problems with company culture, management style, and/or compensation.
Know Your IT Department KPIs
In summary, KPIs are crucial to measuring progress toward predetermined targets. Identify your relevant metrics by considering your business goals, industry standards, and availability of data.
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