A Measurement Model to Link Process Operational Measures to Risks Associated with Attainment of Business Critical Success Factors

There is currently no evidence of a measurement model to associate IT Service Management (ITSM) maturity with financial profitability which prompts the research question: how can a model and method be developed to link ITSM process capability and process performance with financial performance? The purpose of this study was to develop and apply a measurement model and present a pragmatic and cost effective method to link ITSM process capability and financial performance by operationalizing Key Performance Indicators (KPIs) to support Critical Success Factors (CSFs) and associating CSFs with business risks to determine CSF risk levels. This paper presents a conceptual measurement model derived from the literature, a description of the mixed method approach to collect data from the organization, the application of the model to the Incident Management process at Company X and a discussion of lessons for practice, theoretical contributions, limitations and an agenda for further research. The study found that the measurement model and method developed can be used as a starting point for self-improvement for businesses, identifying gaps in processes, benchmarking within an organization as well as guiding an organization’s improvement efforts. The measurement model can be used to conduct What-If analyses to model the impacts of future business decisions on KPIs and CSFs. The measurement model presented in this study can be quickly implemented, adapted and evolved to meet the organization’s needs. This study employs the resource-based view of the organization to exhibit a firm’s IT capability characteristics of, and its relationship to, organizational performance. The research offers an example from which other organizations can learn to measure their financial return on investment in ITSM improvement