This article was co-written by Chris Boyd, a Senior Associate at Metis Strategy.
Current CIOs are leading innovation efforts aimed at increasing revenue, entering new markets and expanding product lines. However, according to Foundry’s State of the CIO Survey of 2022, 76% of CIOs say it is challenging to strike the right balance between business innovation and operational excellence. If CIOs can’t master operational excellence – “keep the light on” – they lose credibility with their peers and risk the faltering Wi-Fi in the executive conference room overshadowing new innovations.
To strike the right balance, many technology leaders have adopted a Service Quality Index (SQI) to consistently measure and communicate the quality of “keep the lights on” work so that their peers can quickly confirm that the basics have been covered and innovation-driven be able to endorse initiatives without pause.
A CIO Service Quality Index (SQI) defines the key operational capabilities for which a CIO is responsible, the relative weight of capability through the eyes of customers, and the associated metrics that determine quality. In practice, it works like a stock index like the S&P 500, which summarizes the holistic performance of the CIO’s operational capabilities (e.g., the underlying stocks) with a single digit, and provides a basis for macro trend analysis (e.g., period performance), and allowing stakeholders to double click on specific capabilities (e.g. sectors) for root cause analysis.
The customer-centric origins of SQI
FedEx has built an SQI to better understand the level of quality delivered to customers. They began by assessing their customer experience, which revealed 71 critical data points that greatly impacted the quality of service provided, such as lost or damaged packages, missed collections, overcharges, delivery delays, complaints, or unanswered customer requests. . Each of the 71 data points was weighted based on the rating to reflect its relative importance to the customer.
The beauty of FedEx’s SQI is in its simplicity. In the dashboard, the company summarized the performance of all 71 data points with one number on a scale of 0-100. After the SQI was published, FedEx executives were able to follow the dashboard to identify trends and understand how well the company was serving its customers. Leaders also used the SQI to prioritize their work and increase focus on initiatives that had the greatest impact on the customer experience. With a common set of data points to collect around, teams across the organization set up projects that focused on “moving the needle” on one or more of the dimensions on the dashboard. FedEx’s SQI also ensured that priorities were clearly communicated across the organization, and today it plays an important role in further enhancing the customer experience and enabling the company’s growth.
Building a CIO Service Quality Index
Chances are, you’re among the majority of CIOs struggling to balance innovation and operational excellence. Or maybe you’re looking for a mechanism to show how aging infrastructure affects service quality to justify a new investment. In either case, consider constructing an SQI using the following five-step process as a smart first step.
- Identify and weigh the dimensions of service quality
- Just as FedEx researched its customer experience, start by assessing how different personas interact with IT. Identify the key operational capabilities your organization offers that have a visible impact on your constituents. For example, a multibillion-dollar industrial customer chose to focus on employee help desk, network performance, data quality, platform availability and troubleshooting, as poor performance in each of these areas is driving negative customer sentiment and headwinds to the transformation agenda.
- Weigh Quality of Service Dimensions, Identify Metrics, and Get Enrolled
- Determine the relative weight for each dimension of service quality based on the impact on the personas you’ve identified. Work with leaders in your organization to understand what metrics you are tracking today, determine which are useful to measure quality dimensions, and where new metrics are needed. For example, you can determine that 30% of your total SQI is determined by the troubleshooting quality metrics. For that dimension, you can use total ticket volume, average time to resolution, and business impact of critical issues to represent 20%, 20%, and 60% of the quality dimension, respectively. Share the first draft of dimensions and metrics with your constituents. Make sure your weighting schedule reflects the views of the stakeholders responsible for approving and using the decision analysis dashboard.
- Build the MVP SQI and the “prospectus”
- Build your MVP in a spreadsheet, knowing there will be frequent changes in the early innings. If you want your index to have staying power, you need to provide transparency in the mechanics. Consider creating an SQI “prospectus” that, like a stock index prospectus, allows stakeholders (investors) to understand the dimensions of quality (underlying stocks in the index), how quality metrics are calculated, obtained, and weighted (index performance), who measures and calculates quality (fund managers), and how often performance is updated (monthly, quarterly, etc.).
- Publish, iterate, integrate and automate
- Share the MVP and prospectus and provide ample opportunities for feedback and Q&A. Explain the purpose of the SQI and how it can be used as a prioritization mechanism when your organization is thinking about capacity planning or where AI/ML can be used to drive quality improvements. Be open to feedback on quality measures and calculation and update the index using an iterative approach. Once you have reached the alignment, identify opportunities to integrate the SQI into other communication channels. Steering groups, existing operational reports and departmental meetings are good starting points. One customer decided to display the IT Service Quality Index, which was updated monthly, on large monitors that adorned the walls of the IT department to keep the team focused on quality. You can explore automation solutions for updating the index once you reach a stable state and changes become less frequent.
Bringing it together
By building a Service Quality Index, operational problems do not disappear. However, it gives you a tool that simplifies performance measurement and allows you to be surgical about recovery plans. Whether you’re in the early or late innings of mastering operational excellence, the SQI can give you some breathing room and start shifting the conversation from keeping the lights on to turning on new lights.