| | Today’s uncertain business environment has made traditional formulas for success obsolete. To be competitive, organizations, and functions within organizations, must improve process performance, emphasize efficiency and demonstrate value to stakeholders.
Technology is the key enabler for businesses trying to respond to these new challenges. Technology is ideally positioned for measuring and reporting results, enhancing business performance, reducing costs, and improving customer care.
Despite reports of technology’s capability to deliver these business value, many senior business executives continue to express doubts as to their own company’s ability to successfully leverage technology to deliver.
The Technology Challenge: After twenty years of talk and promises, most CEOs still express doubt that IT direction is meaningfully linked to business goals and objectives. CFOs, particularly in the current down economy, are skeptical and are therefore challenging IT to demonstrate value from any investments in technology. CIOs are now faced with increased pressure to use technology to improve customer satisfaction, justify variances from industry benchmarks, improve the image of the IT department to a skeptical user community, and manage projects and initiatives of ever increasing complexity and scope.
Goals of an IT Performance Measurement Program: One approach being tried by CIOs to address these challenges is the implementation of a Performance Measurement Program in IT – a program designed to establish objectives that are linked to business direction; define key performance indicators (KPIs) for those objectives that can demonstrate value; and measure, track and report on the performance of those KPIs. The goal of implementing such a program and subsequently summarizing results in a CIO’s Dashboard must be to provide management and users of IT services with a means of ensuring that investments in IT are delivering measurable business results. To achieve this goal, a formal program with the following key objectives is needed: - Link business strategy and IT objectives
- Establish an IT value proposition
- Improve communication between users and providers of technology services
- Enhance IT management capabilities and controls
- Ensure technology performance meets expectations and operates within acceptable parameters
A Business-driven Approach to IT Management: A formalized CIO Dashboard Performance Management Program offers a business-driven approach to the Management of IT. It demonstrates the value of technology to the business by capturing and presenting performance levels agreed to in advance. It begins by articulating business goals and translating those goals into a set of key metrics surrounding the integration and delivery of technology to the business. To be effective, we have observed that the approach must: - be sponsored and driven by the top of the organization,
- be comprehensive in scope, participation and sponsorship, and
- embrace proven management frameworks.
Implementing a CIO Dashboard Performance Measurement Program: Four operational steps or phases are involved in establishing a comprehensive CIO Dashboard of Performance Measures. They are: - Balanced IT Scorecard: In order to identify and agree upon the key performance indicators (KPIs) of IT, business strategies and goals are identified. IT objectives or programs that can enable or enhance each goal from a customer, process, financial or employee perspective are specified and rationalized. Finally, performance indicators of each IT objective or program are determined, data sources identified, and target performance levels agreed to in a formal IT value proposition.
- IT Process Analysis: The IT Process Analysis constructs a model of IT processes. The model is compared to generic, best in class models for consistency of flow, logic, interfaces, outputs and controls. Inconsistencies are rationalized or reengineered to improve performance. Measures of the efficiency and effectiveness of each process are determined and data sources identified and evaluated.
- IT Performance Measurement: The formal IT Performance Measurement program is built upon the KPIs from the IT value proposition and the IT process measures of effectiveness and efficiency derived from process modeling. The resulting metrics are prioritized and arranged into a series of performance reports that measure and track the performance of IT. Where possible, industry benchmarks are included on reports to ensure IT operates within generally accepted normative values. Once stabilized, a data warehouse of performance metrics is established by the client to collect performance metrics from IT feeder systems and automatically generate the needed performance reports.
- The CIO Dashboard: The CIO Dashboard is a summary report generated either manually or from the IT performance data warehouse, where available. The Dashboard reports on the metrics most important to the business in a highly graphical form. The CIO Dashboard is generated and distributed periodically or made available to IT customers over the organization’s intranet.
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| | CIO Dashboard Benefits: CIO Dashboard benefits accrue to the business, the IT function and individual IT processes, and include: - improved and demonstrable IT value
- measurable business improvements
- improved customer satisfaction
- more collaborative business and IT linkage
- improved IT performance
- better managed IT portfolio
- improved IT image and morale
- improved reliability and responsiveness
- repeatable, reliable results
- improved productivity and service levels
- seamless, end-to-end services
- improved functional and technical quality
- improved service level performance
- better management of external service providers
Dedication of the resources, time and management attention to the implementation of a CIO Dashboard Performance Measurement Program can deliver these benefits, improve the professionalism of IT, and enhance Senior Management’s confidence and comfort with the IT function. | |
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