IS/IT Performance Measure

7 Feb

Which framework should management teams use? Balanced scorecard is the most widely used IT performance measure because it provides organisations with a comprehensive view of business and focuses management on the handful of measures that are most critical.

Balanced scorecard if prepared properly by management will contain a unity of purpose that assures measures and directed to achieving a unified strategy. A good balance scorecard provides a comprehensive view of an organisation.

Different organisations will follow different paths to build their balance scorecard because of the uniqueness in organisations. The balance scorecard will provide management teams with a framework that serves as a performance measurement system and a strategic management system.

This framework will allow management teams to:

  • Clarify and translate vision and strategy
  • Communicate and link strategic objectives
  • Plan, set  targets and align strategic initiatives
  • Enhance strategic feedback and learning

The BSC talks about the contribution of IT to the business strategy in the learning and innovation perspective.  The contribution includes improved access to information that may improve business processes, customer service and reducing costs. It was noted that clear strategic objectives, definite critical success factors and mission-level performance measures provide the best means to link IT investments to organisations goals and objectives and in the long run organisations accomplishments.

There is no set of performance measures that will be effective for all investments. Organisations differ and their priorities change overtime. For a performance measure to be effective, measures need to be tailored to the organisation’s mission and management style.

Determining what to measure:  A guiding principle is to measure what matters most.  To assess the business performance of IS/IT investments, management teams may need to consider the following categories:

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The BSC important perspectives give a comprehensive view to quickly assess organisational performance.  Desired outcomes from IT systems that are linked to business goals and objectives are identified after developing the critical success factors of each of the four perspectives. The outcomes and information strategies are contained in the learning and growth perspective as mentioned earlier.

For some IS/IT investments, it may be important to have a measure for each perspective. The objective is to identify a few meaningful measures that provide a comprehensive assessment of an IT investment.  Balance scorecard has an advantage that facilitates alignment of activities to achieve goals.

Reference

https://www.acquisition.gov/sevensteps/library/GSAeightsteps.pdf

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