A company’s IT decisions can have a significant effect on its fiscal health. Wrong choices can affect many aspects of a business, with financial ramifications such as reduced revenue and increased operating costs. Modern companies need a way to objectively evaluate their decisions to optimize their IT budgets and ensure funds are being used to benefit their businesses.
Decision-makers can leverage metrics to gauge the effects of IT decisions on the business and the company’s bottom line. Teams can leverage different categories of metrics to examine how their choices are impacting various aspects of the company’s finances. Organizations that monitor the right metrics can reduce waste, minimize downtime, support growth, enhance the customer experience, and justify IT investments.
This article examines key financial and operational metrics and the information they provide to support planning and implementing an IT environment.
Which IT Metrics Measure Direct Impacts on Revenue?
Teams can use the following metrics to assess the direct impact of IT decisions and environmental choices on company revenue.
Revenue per user and revenue per transaction
These metrics measure the effects of system availability and performance on company revenue. They are particularly useful for companies running ecommerce sites, SaaS platforms, or online stores. The metric is directly reduced by system downtime or degraded performance.
Revenue per user measures the average income generated per customer by dividing the total revenue by the number of users. Revenue per transaction tracks the value generated by each purchase.
Conversion rate
The conversion rate is the percentage of users who take a desired action, such as creating an account, downloading content, or making a purchase, among the total number of site visitors. It is a vital digital marketing metric for understanding the productivity and success of ecommerce platforms. A website’s conversion rate is greatly influenced by factors such as system availability and page load speeds.
Small performance degradations or latency can reduce conversions. Companies can improve conversion rates by improving database performance, using a content delivery network (CDN), or optimizing their hosting architecture.
Uptime percentage and downtime cost
Downtime directly leads to lost revenue by affecting conversion rates and reducing the potential number of visitors and transactions. Downtime costs are typically calculated by multiplying revenue per hour by the downtime duration and adding recovery costs. Companies can minimize downtime through high-availability infrastructure, comprehensive incident and response solutions, and managed services to address technical skills gaps.
What Metrics Focus on Productivity and Efficiency?
Organizations almost universally strive to improve productivity and efficiency. The following metrics offer compelling information that can address these issues.
Mean time to resolution (MTTR)
This metric tracks the speed with which IT services are restored after incidents or outages. A lower MTTR indicates problem resolution results in minimal downtime and reduced labor costs. Teams can lower their MTTR with effective incident response procedures and monitoring tools. Companies can engage experienced managed service providers (MSPs) that offer service-level agreements (SLAs) to minimize MTTR further.
Change failure rate
Companies can experience unexpected downtime and reduced productivity due to failed IT changes. Teams may need to roll back systems to address a failed change, impacting both internal and external system availability. This metric provides the percentage of changes that fail. Businesses can minimize failure rates by implementing a robust change management process and verifying prospective changes in a testing environment.
IT staff utilization rate
Companies can use this metric to understand how much time their IT staff spends on strategic activities versus reactive work to address issues affecting productivity and efficiency. Costs and staff turnover are increased by heavy reactive workloads that involve performing repetitive tasks to resolve recurring problems, such as rerunning failed backup jobs. Companies can improve IT staff utilization by standardizing processes, automating tasks, and engaging managed services to augment in-house personnel.
How Can Metrics Help Control Costs?
Companies can use specific metrics to assess the costs of alternative IT solutions before implementing them. For example, evaluating the total cost of ownership (TCO) of IT resources and solutions may demonstrate that short-term savings lead to higher long-term costs. Decision-makers must prioritize TCO when determining whether large moves, such as cloud migration or managed services, provide financial benefits.
Cost per transaction or per user is another useful metric for controlling IT costs. The costs should go down after effective infrastructure or software selections are made. Companies can take concrete steps to lower these costs by right-sizing their environment, eliminating waste, and optimizing system performance.
What Metrics Address Risk and Compliance Costs?
Businesses must safeguard their environment to protect their valuable data and maintain compliance. Several metrics provide insight into a company’s security and compliance posture.
- Security incident frequency is valuable for identifying security gaps that lead to financial and reputational costs. Teams can use this metric to justify implementing effective patch management and monitoring solutions.
- Organizations should evaluate the cost of compliance audits, staffing, and remediation. Costs can be lower with standardized processes, automation, and managed compliance services.
- Data loss costs include downtime, regulatory fines, legal fees, and lost customers. Companies that calculate the actual costs of data loss will be motivated to take the necessary steps to limit it, such as encryption, backups, and strong access controls.
Let VAST Help Optimize Your IT Decisions
VAST IT Services can help you optimize your IT decisions in multiple ways that positively affect your bottom line. The following are specific services and solutions we offer our customers to address the metrics previously discussed.
Businesses can leverage our managed services to provide expert assistance and minimize downtime, compliance gaps, and staffing shortages. Our expert teams will help optimize your cloud or on-premises IT environment for measurable productivity and efficiency gains.
Our Cloud Backup-as-a-Service (CBaaS) and Disaster Recovery-as-a-Service (DRaaS) offerings can lower the TCO of your data protection solution while automating backup processes for better efficiency.
VAST’s data center transformation service helps your business make decisions that benefit your bottom line and modernize your IT environment to compete in today’s competitive landscape.
Get in touch with VAST today and learn more about how our services can impact your company’s bottom line.
