Evaluating the Performance of an IT Department?

Daniele Pagano asks: "I have just been promoted from code monkey to manager of the IT department of a construction subcontractor. As far as this industry goes, we are relatively high-tech (and getting better), but like many IT departments we are often considered a necessary money 'black hole' (i.e. they just notice the outages). So one question that arises is: how do we actually value our work? That is, how much money are we actually saving the company, and how do we demonstrate it to them? How do we value the contributions of each IT staff member (say, for a bonus or raise) in an objective, quantifiable manner? I know there is no one correct answer, and I have many ideas, but I thought we could pull our thoughts together for the betterment of small IT departments everywhere."

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[Planesdragon]

So one question that arises is: how do we actually value our work?

The way you value your work is by expressing how much cost you have kept the company from otherwise spending. If you had unlimited time to evaluate, you could go out and see how many dollars the company would have to spend to have someone come in and support every project you support, with the same level of response that you have.

Demostrating it is less easy, especially if there aren't any renovations you can do to immediately save your company money (that is, the job has been done right already.)

How do we value the contributions of each IT staff member (say, for a bonus or raise) in an objective, quantifiable manner?

Decide on a perfomance metric that you can objectively measure for each task. A web developer should be rated differently than a tech support person, for example. Metrics should preferrably be such that a tech trying to game the numbers will be working more like your ideal employee (i.e., instead of looking at "time to close ticket", look at "time to first response" and "satisfaction of non-IT")