Measure what is measurable, and make measurable what is not so.

Galileo Galilei

The greatest challenge facing companies today is not finding ways to measure performance. The key issue is one of understanding what should be measured and validating that there is agreement on what the purpose of the measurement is.

Organizations are complex. And with complexity arises the need to gather data for different purposes. In my series discussing Why Web Measurements?, I broke organizations down into four groups, each one having distinctly different needs for measurements and data. While this series focuses on Web performance, the four categories (Customer Generation, Customer Retention, Business Operations, and Technical Operations) can be broadly applied to all aspects of your business.

In each of the four categories, whether it is for Web performance or financial analysis, determining what and why to measure is a critical predecessor to the establishment of measurements and the examination of data.

2009 will be a year of reflection and retrenchment. Companies will be examining all aspects of their business, all of their relationships with vendors, all of the ways they measure themselves. The question that must be asked before succumbing to the rushing panic of cost-cutting and layoffs is: Do you fundamentally understand why and what you measure and what it is really telling you?

In my life as a consultant, I often discuss What Web performance data means and how to interpret it to solve problems. Solving the problems is, however, inherently based on whether the data that is collected is meaningful. In trying to find data that is meaningful, we have found that there are four categories that Web performance measurements fall into: Customer Generation, Customer Retention, Business Operations, and Technical Operations.

Customer Generation

How can you use Web performance measurement data to outperform your competition and impress your prospects. Read it here!

Customer Retention

Impress your customers with your skill and responsiveness, and keep the competition from sneaking in the back door. Read it here!

Business Operations

Know how you are doing against your competition and prioritize what you need to do to stay ahead. Read it here!

Technical Operations

Know what to measure and how often to keep a detailed eye on your internal systems and external performance. Read it here!

In the Customer Generation and Customer Retention articles of this series, the focus was on Web performance measurements designed to serve an audience outside of your organization. Starting with Business Operations, the focus shifts toward the use of Web performance measurements inside your organization.

Why Business Operations?

When I was initially developing these ideas with my colleague Jean Campbell, the idea was to call this section Reporting and Quality of Service. What we found was that this didn’t completely encompass all of the ideas that fall under these measurements. The question became: which part of the organization do reporting and QoS measurements serve?

What was clear was these were the metrics that reported on the health of the Web service to management and the company as a whole. This was the measurement data that the line of business tied to revenue and analytics data to get a true picture of the health of the online business.

What are you measuring?

Measurements for business operations need to capture the key metrics that are critical for making informed business decisions.

• How do we compare to our competitors?
• Are we close to breaching our SLAs?
• Are the third-parties we use close to breaching their SLAs?
• What parts of the site affect performance / user experience the most so we can set priorities?
• How does Web performance correlate with all the other data we use in our online business?

Every company will use different measures to capture this information, and correlate the data in different ways. The key is that you do use it to understand how Web performance ties into the line of business.

How often do I look at it?

Well, honestly, most people who work in business operations only need to examine Web performance once a day in a summary business KPI report (your company has a useful daily KPI report that everyone understands and uses, right?), and in greater detail at weekly and monthly management meetings.

The goal of the people examining business operations data is not to solve the technical problems that are being encountered, but to understand how the performance of their site affects the general business health of the company, and how it plays in the competitive marketplace.

What metrics do I need?

Business operations teams need to understand

• End-to-end response time for measured business processes
• Page-level response times for measured business processes
• Success rate of the transaction during the measurement period
• How third-parties are affecting performance
• How Web analytics and Web performance relate
• How different regions are affected by performance
• How does performance look from the customer ISPs and desktops

Detailed technical data is lost on these people. It is their role to take all of the data they have, and present a picture of the application as it affects the business, and discuss challenges that they face at a technical level in terms of how they affect the business.

Summary

For people who work at an extremely detailed level with Web measurement data (the topic for the next part of this series), Business Operations metrics seem light, fluffy, and often meaningless. But these metrics serve a distinct audience: the people who run the company. Frankly, if the senior business leaders at an organization are worried on a daily basis about the minute technical details taht go into troubleshooting and diagnosing performance issues, I would be concerned.

The objective of Business Operations measurements is to convey the health of the Web systems that support the business, and correlate that health with other KPIs used by the management team.