International Telecommunication Union ITU-T E.419 TELECOMMUNICATION STANDARDIZATION SECTOR OF ITU (02/2006) SERIES E: OVERALL NETWORK OPERATION, TELEPHONE SERVICE, SERVICE OPERATION AND HUMAN FACTORS Network management International network management Business oriented key performance indicators for management of networks and services ITU-T Recommendation E.419
ITU-T E-SERIES RECOMMENDATIONS OVERALL NETWORK OPERATION, TELEPHONE SERVICE, SERVICE OPERATION AND HUMAN FACTORS INTERNATIONAL OPERATION Definitions General provisions concerning Administrations General provisions concerning users Operation of international telephone services Numbering plan of the international telephone service International routing plan Tones in national signalling systems Numbering plan of the international telephone service Maritime mobile service and public land mobile service OPERATIONAL PROVISIONS RELATING TO CHARGING AND ACCOUNTING IN THE INTERNATIONAL TELEPHONE SERVICE Charging in the international telephone service Measuring and recording call durations for accounting purposes UTILIZATION OF THE INTERNATIONAL TELEPHONE NETWORK FOR NON- TELEPHONY APPLICATIONS General Phototelegraphy ISDN PROVISIONS CONCERNING USERS INTERNATIONAL ROUTING PLAN NETWORK MANAGEMENT International service statistics International network management Checking the quality of the international telephone service TRAFFIC ENGINEERING Measurement and recording of traffic Forecasting of traffic Determination of the number of circuits in manual operation Determination of the number of circuits in automatic and semi-automatic operation Grade of service Definitions Traffic engineering for IP-networks ISDN traffic engineering Mobile network traffic engineering QUALITY OF TELECOMMUNICATION SERVICES: CONCEPTS, MODELS, OBJECTIVES AND DEPENDABILITY PLANNING Terms and definitions related to the quality of telecommunication services Models for telecommunication services Objectives for quality of service and related concepts of telecommunication services Use of quality of service objectives for planning of telecommunication networks Field data collection and evaluation on the performance of equipment, networks and services OTHER E.100 E.103 E.104 E.119 E.120 E.139 E.140 E.159 E.160 E.169 E.170 E.179 E.180 E.189 E.190 E.199 E.200 E.229 E.230 E.249 E.260 E.269 E.300 E.319 E.320 E.329 E.330 E.349 E.350 E.399 E.400 E.404 E.405 E.419 E.420 E.489 E.490 E.505 E.506 E.509 E.510 E.519 E.520 E.539 E.540 E.599 E.600 E.649 E.650 E.699 E.700 E.749 E.750 E.799 E.800 E.809 E.810 E.844 E.845 E.859 E.860 E.879 E.880 E.899 E.900 E.999 For further details, please refer to the list of ITU-T Recommendations.
ITU-T Recommendation E.419 Business oriented key performance indicators for management of networks and services Summary The scope of this KPI Recommendation is to find areas where meaningful measures can be identified and correlated to the broader business objectives. Often measurements are taken because they are available not because they are meaningful. It is envisaged that the model in this Recommendation will assist carriers to direct operations areas to play a more key role in supporting the business. Network management requires real-time monitoring of current network status and performance and the ability to take prompt action to control the performance and resources of the network and services when necessary. It should be noted that the complete range of network status and performance parameters are not necessary for the introduction of a network management capability. Source ITU-T Recommendation E.419 was approved on 13 February 2006 by ITU-T Study Group 2 (2005-2008) under the ITU-T Recommendation A.8 procedure. ITU-T Rec. E.419 (02/2006) i
FOREWORD The International Telecommunication Union (ITU) is the United Nations specialized agency in the field of telecommunications. The ITU Telecommunication Standardization Sector (ITU-T) is a permanent organ of ITU. ITU-T is responsible for studying technical, operating and tariff questions and issuing Recommendations on them with a view to standardizing telecommunications on a worldwide basis. The World Telecommunication Standardization Assembly (WTSA), which meets every four years, establishes the topics for study by the ITU-T study groups which, in turn, produce Recommendations on these topics. The approval of ITU-T Recommendations is covered by the procedure laid down in WTSA Resolution 1. In some areas of information technology which fall within ITU-T's purview, the necessary standards are prepared on a collaborative basis with ISO and IEC. NOTE In this Recommendation, the expression "Administration" is used for conciseness to indicate both a telecommunication administration and a recognized operating agency. Compliance with this Recommendation is voluntary. However, the Recommendation may contain certain mandatory provisions (to ensure e.g. interoperability or applicability) and compliance with the Recommendation is achieved when all of these mandatory provisions are met. The words "shall" or some other obligatory language such as "must" and the negative equivalents are used to express requirements. The use of such words does not suggest that compliance with the Recommendation is required of any party. INTELLECTUAL PROPERTY RIGHTS ITU draws attention to the possibility that the practice or implementation of this Recommendation may involve the use of a claimed Intellectual Property Right. ITU takes no position concerning the evidence, validity or applicability of claimed Intellectual Property Rights, whether asserted by ITU members or others outside of the Recommendation development process. As of the date of approval of this Recommendation, ITU had not received notice of intellectual property, protected by patents, which may be required to implement this Recommendation. However, implementors are cautioned that this may not represent the latest information and are therefore strongly urged to consult the TSB patent database. ITU 2006 All rights reserved. No part of this publication may be reproduced, by any means whatsoever, without the prior written permission of ITU. ii ITU-T Rec. E.419 (02/2006)
CONTENTS Page 1 Scope... 1 2 Need for Performance Indicators... 1 3 References... 1 4 Definitions... 2 5 Abbreviations... 2 6 Introduction... 2 6.1 Evolution of performance indicators... 3 7 Key Business Objectives... 3 8 Key Performance Objectives... 3 9 Key Performance Indicators... 4 10 Types of performance indicators... 4 11 KPI model... 5 12 Implementation of Performance Indicators... 7 ITU-T Rec. E.419 (02/2006) iii
ITU-T Recommendation E.419 Business oriented key performance indicators for management of networks and services 1 Scope The scope of this KPI Recommendation is to find areas where meaningful measures can be identified and correlated to the broader business objectives. Often measurements are taken because they are available not because they are meaningful. It is envisaged that the model in this Recommendation will assist carriers to direct operations areas to play a more key role in supporting the business. Network management requires real-time monitoring of current network status and performance and the ability to take prompt action to control the performance and resources of the network and services when necessary. It should be noted that the complete range of network status and performance parameters are not necessary for the introduction of a network management capability. 2 Need for Performance Indicators The purpose of detailing Key Performance Indicators (KPI) is to establish a strong correlation between long-established drivers for Network Management indicators and the current telecommunications industry's aggressive 'business focus'. Increasingly, there is a change in the traditional management philosophy, wherein there is little such correlation, to an environment that recognizes the impact that operations make on organization level business objectives, such as revenue (growth and protection) and reduction of costs, etc. An essential component of implementation of the objectives of the telecommunications sector is the definition and adoption of monitorable performance indicators. These indicators will help policy-makers and company executives responsible for implementing these policies to measure the level of performance achievement. Therefore, the selection of indicators to examine depends on the specific problem being addressed. In the telecommunications sector, the problems to be addressed may include: a) large unsatisfied demand for service and non-availability of next generation telecommunications services required by business and commerce; b) poor quality of service; c) poor financial performance and lack of financial resources; and d) lack of qualified manpower. Performance indicators should be used to monitor progress in first addressing and then resolving the various problems affecting the performance. 3 References The following ITU-T Recommendations and other references contain provisions which, through reference in this text, constitute provisions of this Recommendation. At the time of publication, the editions indicated were valid. All Recommendations and other references are subject to revision; users of this Recommendation are therefore encouraged to investigate the possibility of applying the most recent edition of the Recommendations and other references listed below. A list of the currently valid ITU-T Recommendations is regularly published. The reference to a document within this Recommendation does not give it, as a stand-alone document, the status of a Recommendation. ITU-T Recommendation E.410 (1998), International network management General information. ITU-T Rec. E.419 (02/2006) 1
ITU-T Recommendation E.411 (2000), International network management Operational guidance. ITU-T Recommendation E.412 (2003), Network management controls. ITU-T Recommendation E.413 (1988), International network management Planning. ITU-T Recommendation E.414 (1988), International network management Organization. ITU-T Recommendation E.415 (1991), International network management guidance for common channel signalling system No. 7. ITU-T Recommendation E.416 (2000), Network management principles and functions for B-ISDN traffic. ITU-T Recommendation E.417 (2005), Framework for the network management of IP-based networks. ITU-T Recommendation E.771 (1996), Network grade of service parameters and target values for circuit-switched public land mobile services. ITU-T Recommendation E.776 (1996), Network grade of service parameters for UPT. ITU-T Recommendation I.350 (1993), General aspects of quality of service and network performance in digital networks, including ISDNs. ITU-T Recommendation M.3000 (2000), Overview of TMN Recommendations. ETSI ETS 300 615 (1996), Digital cellular telecommunications system (Phase) (GSM); Performance data measurements (GSM 12.04). 4 Definitions Network Management definitions are stated within the E.410 series of ITU-T Recommendations. 5 Abbreviations This Recommendation uses the following abbreviations: ASR Answer Seizure Ratio KBO Key Business Objectives KPI Key Performance Indicators KPO Key Performance Objectives QoS Quality of Service 6 Introduction One of the challenges faced in managing networks and their services is to understand which piece of data is key for supporting business objectives. Service Provider Executives are fine-tuning their operations with closer scrutiny of what is actually needed for supporting their business objectives. A clear mandate is that those activities utilized by the operations personnel in supporting their work be required to have a direct bearing on those objectives. In this Recommendation, Key Performance Indicators are intended to show a linkage between company Key Business Objectives and the daily operations of the network, as follows: Key Business Objectives are affected by Key Performance Objectives, which are measured by Key Performance Indicators. 2 ITU-T Rec. E.419 (02/2006)
A general framework of Key Performance Indicators has been listed. Service providers can use this information for either specific business units or at the corporate level. 6.1 Evolution of performance indicators Before the mid seventies, performance monitoring was predominantly related to technical matters network growth, improvement in quality of service, training of technical staff, etc. With emphasis shifting from engineering to financial issues and survivability, more importance is now placed on financial indicators including profitability, liquidity, tariffs, billing and collection, etc. 7 Key Business Objectives As seen in the following KPI model (clause 11), these objectives are normal for most of the telecommunications industry. A glance at annual reports from any of the companies, in particular network or service providers, will find these areas in some fashion. While most likely the revenue area is on the second page, the other areas follow in later sections. Revenue (growth and protection) and cost reduction are normally the highest priority. It is essential to note that the list is not all-inclusive but is based on those that were the most universal in definition. Key Business Objectives are derived from the business areas that are determined important for each company. Whilst the below KBOs within the model suggest a linear relationship, we realize there is also horizontal integration that occurs. The broad Key Business Objectives have been identified as: Revenue (Growth and Protection). Cost Reduction. Improve the Customer Experience. Government Regulations. Technical and Resource Reduction. 8 Key Performance Objectives Key Performance Objectives are those in broad measurements that support the business objectives. For example: concerning revenue growth, availability of services or network would support ensuring revenue. However, availability of the network could be a requirement that is imposed by government regulations to ensure service. KPOs are those measures that directly support the Key Business Objectives (KBO) and can be quantifiably measured in real time. KPOs that have been identified are: Availability. Network outage impact reduction. Integrity. Protection. QoS. Downtime. Notification. Reliability. Frequency. Efficiency. ITU-T Rec. E.419 (02/2006) 3
Productivity. Security. 9 Key Performance Indicators Key Performance Indicators are the detailed indicators measured in real time that are measurable and support directly the Key Business Objectives via Key Performance Objectives. It also needs to be emphasized that single performance indicators do not, by themselves, carry much weight or information. Most of these indicators need to be seen from a time perspective to establish whether there exists a trend towards reduction or improvement of performance. Equally, most indicators represent an interactive relationship with other indicators: revenues result from tariff efficiencies and network operating efficiencies; revenues also relate to network size and scope. Thus, a basic revenue indicator will have multiple other indicators impacting on it. Interpreting performance indicators requires the skill and knowledge to recognize correctly these multiple impacts and view performance in its holistic perspective. 10 Types of performance indicators Qualitative and quantitative indicators have been developed to monitor the status and performance. The status of the business is normally expressed in qualitative terms while engineering, financial and economic performance is measured quantitatively. The qualitative indicators are used to measure the various stages of business reforms. The performance of a company may be measured through a set of performance indicators. Such indicators are supported by: Key Business Objectives, Key Performance Objectives and Key Performance Indicators. 4 ITU-T Rec. E.419 (02/2006)
11 KPI model See Figure 1. Figure 1/E.419 KPI model ITU-T Rec. E.419 (02/2006) 5
Key Business Objectives NM Key Performance Objectives Table 1/E.419 KPI table NM Key Performance Indicators Revenue Growth Availability Decrease call failures Increase call completion Cost Reduction The Customer Experience Adhere to Government Regulations Network Outage impact reduction (patching & prioritization) Patching Customer prioritization Examples % Network failures identified and responded to within agreed time-frames % Network failures identified and restored (patched/re-routed/repair) within agreed time-frames # Reoccurring network faults identified and restored within agreed time-frames/# of reoccurring network faults % Of patches identified (agreed time-frames) % Patches implemented for restoration (agreed time-frames) # Of customer outages restored within SLA limits/total number of customer outages Integrity Billing % Of bills resulting in customer complaints Protection (controls) Quality of Service Downtime Notification Reliability Frequency Implementation of controls QoS % Activated from indicator within agreed time-frames # Of Exchange Failures due to traffic overload Current Answer Seizure Ratio vs standard per destination (within capabilities) % Customer faults closed within agreed time-frames % Indicator to restoration as agreed % Indicator to notification as agreed % Customers (internal & external) satisfied through customer surveys % Of call failures % Of network congestion % Of interconnection measures met % Of network failures/customer faults restored within agreed time-frames 6 ITU-T Rec. E.419 (02/2006)
Table 1/E.419 KPI table Key Business Objectives NM Key Performance Objectives NM Key Performance Indicators Examples Technical & Resource Reduction Capabilities Efficiency & Productivity Number of successful NM real-time processes/number of events Fault Tickets % Tickets accurate % Improvement in cost performance % Of improvement in performance on all NM KPIs Number of process/technical improvements developed & implemented % Improvement in employee opinion (training & efficiency of group) 12 Implementation of Performance Indicators Performance indicators have been used in the telecommunications sector for a long time. However, the types of indicators employed were focused primarily on monitoring engineering performance. Telecommunications companies did not focus on the impact that the availability and quality of telecommunications services had on the overall economic development of their companies. Thus, macroeconomic indicators related to the telecommunications sector were scarce. A first task is to make companies aware of these indicators and to establish systems to collect and collate performance data. Companies should designate organizations to undertake this task. The indicators specified by the regulatory body should constitute the minimum indicators required to monitor the performance of a company. Additionally, every company should have its own more detailed performance indicators geared to the problems and objectives of that particular company. The indicators should also be tailored to different management levels in the company. For instance, while top management would not be interested in the detailed day-to-day data on the performance of the network, they should be concerned with the performance trend, regardless of whether it is improving or deteriorating. Since the purpose of indicators is to assist management to monitor performance and to take remedial action as necessary, timely production of these indicators is critical especially when there are problems. The performance indicators reporting system should have inherent mechanisms, which can flag serious problems immediately. The frequency of collection of data on performance indicators will vary depending on the types of indicators. While engineering indicators would be collected on a daily basis, collection of financial performance indicators would be more meaningful on a quarterly basis, as an example. Network managers that are managing the network and services in real time will need the data in time-frames of 5-15 minutes and sometimes even 30 seconds. Data collection is defined further in ITU-T Rec. E.411. ITU-T Rec. E.419 (02/2006) 7
SERIES OF ITU-T RECOMMENDATIONS Series A Series D Series E Series F Series G Series H Series I Series J Series K Series L Series M Series N Series O Series P Series Q Series R Series S Series T Series U Series V Series X Series Y Series Z Organization of the work of ITU-T General tariff principles Overall network operation, telephone service, service operation and human factors Non-telephone telecommunication services Transmission systems and media, digital systems and networks Audiovisual and multimedia systems Integrated services digital network Cable networks and transmission of television, sound programme and other multimedia signals Protection against interference Construction, installation and protection of cables and other elements of outside plant Telecommunication management, including TMN and network maintenance Maintenance: international sound programme and television transmission circuits Specifications of measuring equipment Telephone transmission quality, telephone installations, local line networks Switching and signalling Telegraph transmission Telegraph services terminal equipment Terminals for telematic services Telegraph switching Data communication over the telephone network Data networks, open system communications and security Global information infrastructure, Internet protocol aspects and next-generation networks Languages and general software aspects for telecommunication systems Printed in Switzerland Geneva, 2006