CIO Executive Board - IT Balanced Scorecards

Working Council for Chief Information Officers

IT Balanc ala nced ed Scorecards End-to End- to-End -End Performance Measurement Measurement for the Corporate Corporate IT Function Function

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Drivers of Balanced Scorecard Adoption in IT

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Best-in-Class IT Balanced Scorecard Metrics

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Principles of Balanced Scorecard Design and Metrics Selection

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Scorecard Development Development and LifeLi fe-Cycle Cycle Management Management

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Working Working Council for Chief Information Officers 2000 Pennsylvania Avenue NW Washington, Washington, DC 20006 Telephone: 202-777-5000 Facsimile : 202-777-5100 166 Piccadilly London, W1J 9EF United Kingdom Telephone: +44-(0)20-7499-8700 Facsimile: +44-(0)20-7499-9700 +44-(0)20-7499-9700

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Executive Director Chris Miller

Lead Graphic Design Specialists Jon Prinsky • Elizabeth Sugerman

Managing Director Jaime M. Capellá

Publications Editor Dave Engle

Practice Manager Kris van Riper Project Managers Andrew Horne • Matt McWha Consultants James Bilodeau • Carsten Schmidt Senior Analyst Eric Tinson Analysts Kiran Mishra • Michael Scutari Rich Flanagan • Brett Neely Senior Director Brian Foster Directors Sheldon Himelfarb • Matt Kelly Associate Directors Stuart Roberts • Ken Rona • Audrey Taylor

Note to Members

Legal Caveat

This project was researched and written to fulfill the research requests of several members

The Working Council for Chief Information Officers has worked to ensure the accuracy of



























Table of Contents Executive Summary • iv Member Self-Diagnostic • vii An Exhaustive Exhaustive Compendium of IT Balanced Balanced Scorecard Scorecard Metrics • 1 Introduction: Principles Principles of Balanced Balanced Scorecard Design and Metrics Selection • 9 Best-in-Class IT Balanced Balanced Scorecard Scorecard Metrics • 21 Financial Performance • 22 Project Performance • 26 Operational Performance • 30 Talent Management • 34 User Satisfaction • 40 Information Security • 46 Enterprise Initiatives • 50 Scorecard Development and Life-Cycle Management • 55 Scorecard Rollout • 56 Data Collection and Quality Assurance • 58



























iv

Executive Summary

Institutionalizing IT Balanced Scorecards Multiple Drivers of Greater IT Performance Scrutiny IT organizations are increasingly adopting the bala nced scorecard scorecard as a managemen ma nagementt tool incorporating financial, operational, talent management, project management, management, and user satisfaction satisfact ion perspectives into assessments assessments of the performance of t he function. This responds to two major categories of challenges: 1. Business-Centric Challenges— CIO’s need to link Challenges —These include the CIO’ IT strategy w ith business strategy, to monitor monitor service levels while at the same ti me reducing expenses, and to better demonstrate demonstrate the business value of IT. 2. IT-Centric Challenges— Challenges —These include the CIO’ CIO’s need to better manage IT’ IT’s human capital and customer satisfaction, to baseline IT’ IT’s performance with respect to ex ternal providers, to better manage historically politiciz ed resource allocation decisions, and to correct chronic project project underperformance. u nderperformance. Design Principles of Exemplar IT Balanced Scorecards Based on an extensive review of IT ba lanced scorecards collected from corporate exemplars, the Wo Working rking Council finds that the most advanced scorecards share six key structural attributes:

3. Broad Senior Executive Commitment —Exemplars involve involve a mi x of senior IT and business leadership in balanced scorecard design, metrics selection, and regular review. 4. Enterprise-Standard Metrics Definitions— Definitions —Progressive Progressive practitioners achieve consensus on and clearly document scorecard metrics defi definitions, allowing review meetings to focus on decisions rather than debate over the composition or relevance of individual metrics. 5. Drill-Down Drill- Down Capability and Available Context —To supplement a high-level view of IT performance and allow for the detailed review of trends or variance, exemplar balanced scorecards provide visibility into the component elements, elements, source, and context of scorecard metrics. 6. Individual Compensation Linked to Scorecard Performance —To facilitate adoption of the IT balanced scorecard and ensure stakeholder accountability, leading companies lin k achievement of scorecard targets to i ndividual compensation. compensation. Seeking a More Balanced View of IT Performance Progressive Progressive IT balanced bala nced scorecard practitioners practitioners track metrics i n five key categories, seeking to “ balance” balance” traditional supply-side



























Executive Summary (continued)

Institutionalizing IT Balanced Scorecards Operational Performance— Performance —Instead of concentrating measurement measurement efforts on system -specifi -speci fic, day-to-day IT operational metrics, best-in-class balanced scorecard practitioners seek to provide an aggregate, customer-focused view of IT’ IT’s operations. Talent Management — Management — Seeking to better manage the IT organization’ organization’s human capital, c apital, progressive scorecard practitioners track IT staff satisfaction and retention, as well as the attractiveness of the IT department on the external IT skills market. User Satisfaction— Satisfaction —By regularly assessing end-user satisfaction, CIOs can more easily identify serv ice delivery problems and more accurately articulate cost and service quality trade-offs for consideration by business decision makers. Additional Categories in the Ascent Exemplars include supplemental supplemental metric categories to better understand IT’ IT’s performance in two critical areas: Information Security —The recent surge in hacks and viruses, coupled coupled with increased geopolitical tensions, has led advanced IT balanced scorecard practitioners to elevate information security

Scorecard Life-Cycle Management After designing the IT balanced scorecard and selecting the appropriate appropriate metrics, advanced practitioners develop develop a handful of critical competencies to manage the IT bala nced scorecard across across its “ life cycle” cycle”: Performance Transparency —To facilitate facil itate achievement of targets and increase visibility into IT performance, best-in-class scorecard users stage regular executive-level reviews of metric status and gap to goal. Formalized Data Collection Roles and Responsibilities— Responsibilities — Exemplars are creating clearly delineated collection processes and roles to ensure data freshness and accuracy. Closed-Loop Scorecard Revision— Revision —Progressive scorecard practitioners create a closed- loop process for updating categories and metrics as business and IT st rategies change. An IT Balanced Scorecard Deployment Toolkit The Working Working Council has included three appendices in th is brief to assist IT organizations in developing and deploying IT balanced scorecards. The first reproduces the IT balanced scorecards



























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Member Self-Diagnostic

Assessing the Need for an IT Balanced Scorecard The following questions are intended to assist CIOs in diagnosing whether an IT balanced scorecard would be a useful addition to their current IT performance ma nagement nagement framework. fr amework. Yes

1. Can I clearly articulate the link between IT operational operational and project activities and the organizat ion’ ion’s stated strategic business goals? 2. Is there a process or mechanism mechanism in place to track the impact on service levels and satisfaction of ongoing

Yes

No

No

5. Can I communicate a holistic holistic perspective of IT performance consistently across various geographies and business units? 6. Can I easily compare the performance performance of my IT function to that of industry competitors competitors or companies

Yes

No

Yes

No



























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Member Self-Diagnostic Self- Diagnostic (continued) (continued)

Designing Designing and Maintaining a World World-- Class IT Balanced Scorecard To assist member companies in the initial design and implementation of IT balanced scorecards, as well as the reevaluation of existing scorecards, the Working Council has created the following diagnostic questionnaire. Structuring the Scorecard 1. Does the IT balanced scorecard scorecard fit onto a single page (or screen)? 2. Are the IT balanced scorecard scorecard’’s metrics devolved from the goals articulated in the IT strategic plan? 3. Are these metrics expressed in non-technical

Yes

No

Yes

No

Yes

No

Selecting Scorecard Metrics 8. Do financial metrics move beyond beyond simple reporting of total IT spend to help decision makers reallocate IT funding between functional areas, business units, and portfolio categories? 9. Are operational metrics aggregated to provide decision decision makers with a “user’ user’s perspective” perspective” of IT performance?

Yes

No

Yes

No



























Member Self-Diagnostic Self- Diagnostic (continued) (continued)

Designing Designing and Maintaining a World World-- Class IT Balanced Scorecard Ensuring Data Accuracy and Relevance 15. Do all metrics have clear, well- documented defi definitions, agreed upon by senior IT and business leadership? 16. Does each IT balanced scorecard metric have have a defi defined collection frequency (e.g., monthly, quarterly, annually) based on the volatility of the business strategy it helps enable? 17. 17. Have all scorecard metrics been assigned to a metric

Yes

No

Yes

No

Facilitating Management Decision Making 21. 21. Have business decision decision makers, metrics owners, and IT leaders received traini ng on the basic concepts and uses of balanced scorecards? 22. Is the IT balanced scorecard reviewed on a regular basis by IT and a nd business executives senior enough to make decisions based on scorecard i nformation?

Yes

No

Yes

No

Yes

No



























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Roadblocks to Successful Scorecard Use Process Problems Hinder Successful Scorecard Deployment Working Wo rking Council research into the IT balanced scorecard deployments deployments at dozens of large organi zations reveals that those efforts often fall prey to a set of seven “deadly sins” sins” of balanced scorecard design and use: 1. An IT-Centric View of IT Performance— Performance —Failure to involve senior business decision makers in metrics design and selection leads to an operations-biased perspective of IT performance.

5. Lack of Drill-Down Capability and Metric Context — Context —Limited access to detailed data and contextual information underlying scorecard metrics stymies trend or variance analysis and complicates complicates scorecard interpretation. 6. Too Many Metrics —A surplus of metrics overwhelms the scorecard reader and leads to suboptimal use of senior decisionmakers’ makers’ limited time. 7. No Individual Impact — Impact —The absence of incentives linking individual behavior to IT balanced scorecard use hampers



























Seven Deadly Sins Common Pitfalls Encountered Along the Balanced Scorecard Life Cycle 1 Strategic

Lack of senior business executive involvement in metrics selection and refinement 2 No explicit link between metrics and IT strategy

Solution:

p. 60 Solution:

3 Lack of standard metrics definitions complicates aggregation

p. 56 Solution:





























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IT Balanced Scorecards

Balanced Scorecard Metrics

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Best-in-Class IT Balanced Scorecard Metrics The following case profiles present more detailed examinations of metrics sophistication in each of the seven IT balanced scorecard categories. A comprehensive comprehensive list of scorecard metrics, organized by per formance category, category, is included in t he introduction to this brief. Financial Per for mance

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Project Performance

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Financial Performance

Institutionalizing Financial Rigor in IT Financial Discipline at the Heart of the IT Balanced Scorecard Although the concept of the balanced scorecard was developed in order to overcome the traditional reliance on financial-only metrics for performance measurement, a core set of financial metrics is a key component component of exemplar IT balanced scorecards. These metr ics are especially critical in the current climate of stagnating or shrinking IT budgets, as accurately tracking and reporting cost and budget performance is a prerequisite for corporate IT organizat ions. The financial IT balanced scorecard category typically exhibits three progressive levels of metrics sophistication: An Aggregate Spending Overview —The baseline financial metric for most IT balanced scorecards is some absolute measure of company total IT expenditure (for example, total IT spending or IT spending as a percentage of revenue). While important to t rack on an ongoing basis and an essential measure of IT’s financial health, this type of metric fails to provide decision makers with actionable information and context about IT spending’s link to t he business’s business’s strategic imperatives.

Directional Granularity —Advanced IT balanced scorecard practitioners adopt a more nuanced view of IT’s financial performance, delineating IT exp enditures by geography, geography, by business unit, by technology category, or by technology life-cycle stage. This provides decision makers with at least the directional ability to target the most significant cost areas. Typical metrics include total infrastructure spending, operating cost, or total IT spending by business unit. Measuring by Portfolio Mix — Mix —As a strategic performance management tool, tool, the IT ba lanced scorecard needs to present the strategic impact of IT investments. E xemplar companies supplement supplement a foundation of granular financial metrics, such as total IT cost and cost of data communication per seat, with an understanding of how these costs compare to industry peers, usually using external benchmarking data. In addition, exemplars also track portfolio mix—spending per por tfolio category—to anchor IT’s IT’s financial performance in a broader strategic context and help decision makers assess spending in each category relative to that in other categories, as well as past spending levels.

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Financial Performance Metric Maturity Trajectory Relative Maturity of Financial Performance Metrics Illustrative High

Exemplar Measuring by Portfolio Mix

Sample Metrics: • Cost of data communications per seat • Relative spending per portfolio category

Progressive Practitioner Directional Granularity

Sample Metrics:

Granularity of Measure

• Total IT spending by geography • Total IT spending by business unit • Total infrastructure spending Baseline An Aggregate Spending Overview

Sample Metrics:





























Establishing a Financial Frame of Reference Company Background Schlumberger Limited is a $13.5 billion global technology serv ices company company with wit h 76,000 employees of more than 140 nationalities. The company has operations in 140 countries and includes three primary business segments: Schlumberger Oil field Services, the world’ world’s largest oilfi oil field services company and the leading supplier of technology services and solutions to the international oil and gas industry; WesternGeco, jointly jointly owned with Ba ker-Hughes, the world’ world’s largest sur face seismic company; and SchlumbergerSema, an IT services company company providing consulting, systems integration, and managed services to the energy, public sector, sector, telecommunications, and finance markets. Ot her Schlumberger businesses include Smart Cards & Terminals, the NPTest semiconductor semiconductor testing solutions unit, Verifi Verification Systems, and Water Services. Scorecard Background Schlumberger introduced introduced its IT bala nced scorecard in 2002 as part of a larger IT i nitiative to better understand the comparative IT spending levels and align that spending more closely with business needs. Providing Granular Cost Transparency and Comparative Context As a foundation for the financial performance category of its IT

human resources, as well as enterprise- centric categories such as competitive positioning, employee ef fi ef ficiency, and IT ef fi ef ficiency and support. support. This metric of current portfolio “mix,” mix,” along with historical mix data, allows decision makers at Schlumberger to ensure that each of t he portfolio categories receives suf ficient funding and to real locate funding from one category to another to better align with shifting business strategy. More Effective Identi fi Identi fication cation of Standardization and Portfolio Optimization Opportunities One benefi benefit Schlumberger reports from its use of t he IT balanced scorecard is that it has been able to more programmatically identif y missed standardization opportunities. In one instance, a business unit manager looking at the detailed financial metrics on the scorecard realized that the unit’ unit ’s IT cost per seat was higher than the company company average. An in- depth review of the unit ’s IT cost structure revealed that it had not kept pace with the corporate infrastructure standardization initiative, resulting in higher operational costs. A second benefi bene fit is that t hat Schlumberger is able to make more informed portfolio decisions. For example, by reviewing the scorecard, the I T department observed that the amount of IT investment directed to customer care applications was unusually low compared compared to spending in other portfolio categories. This tr iggered a closer look at customer customer

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Aligning IT Spending with Business Need Schlumberger supplements a foundation of unit cost measures with measures of IT portfolio mix

Schlumberger’s IT Balanced Scorecard Schlumberger’ Sample Metrics

Baseline of granular unit cost metrics

Performance against industry benchmarks puts portfolio mix into comparative perspective


• Projected cost for IT services • Year-to-date cost IT services • IT cost per seat • Cost of data communication per seat IT spending by portfolio category

IT Spending by Portfolio Category Illustrative




























Project Performance

Avoiding Project Disaster Monitoring Ongoing Project Performance to Avoid Surprises A 2002 study by t he Standish Group showed showed that out of 35,000 IT projects conducted between 1994 and 2002, only 28 percent were successfully completed, 23 percent failed, and t he majority — 49 percent— percent— either ran over budget or past schedule or ended up with fewer features and f unctions than planned. In addition, larger projects projects exhibited exhi bited a higher rate of failure— failure — 68 percent of projects smaller than $500,000 were finished successfully, while only 10 percent percent of projects larger than $3 million were deemed a success at completion. completion. In addition to consuming IT resources that could be used more effectively elsewhere, these project failures especially

Project Progress and Status— Status —At a minimum, companies measuring project project performance on t heir IT balanced ba lanced scorecards include three basic metrics: the percentage of projects delivered on time, the percentage of projects delivered on budget, and the percentage of projects delivered within scope. Post-Project Review— Review —In addition to tracki ng project project budget, schedule, and scope adherence, more progressive IT balanced scorecard practitioners practitioners also add metrics t hat highlight t he performance of completed completed projects. These companies gather feedback from project project staf f on the project project execution process and

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Project Performance

Project Performance Metric Maturity Trajectory Relative Maturity of Project Performance Metrics Illustrative

Linked to Corporate Strategy

Exemplar Project Contribution to Business Goals

Sample Metrics: • Percentage of new development investment resulting in new revenue streams • Percentage of IT R&D investment leading




























Project Performance

Highlighting IT’s Rol e as a Corporate Enabler Company Background Bowne & Co., a New York-based document, information management, management, and printing solutions provider, provider, has $1 billion bill ion in revenues and 8,400 employees employees Scorecard Background In 2000, Bowne’ Bowne’s CEO engaged the services of a st rategic planning consultant who advocated the creation of corporate and functional balanced scorecards. The IT balanced scorecard, which is directly mapped to Bowne’ Bowne ’s IT strategy, has five main categories: financial

External Partnership Building — Building —Tracks IT’ IT’s collaboration with technology vendors vendors and industry expert s to identify business uses for specifi specific technologies, as measured by the percentage of vendors on Bowne’ Bowne’s partner “ecosystem” ecosystem” map that the IT organization has partnered with. This map documents exist ing vendor relationships, relationships, current spending levels, and contacts at other organiz ations that Bowne wishes to partner with. IT Value Generation— Generation —Assesses IT’ IT’s performance in realizing the potential business impact of new technologies, as measured by t he percentage of technology technology R&D investment that leads to new IT

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Project Performance

Ensuring Project Contribution of Business Benefits Bowne’ s IT organization links IT project work with corporate benefits

Bowne & Co.’ Co.’s IT Balanced Scorecard Sample Metrics

Scorecard provides insight into IT value creation for business

Objectives and metrics clearly described in nontechnical terms Project Performance Illustrative


• Percentage year-over-year operational savings for specific IT services • TCO of IT products and services versus industry benchmarks • Percentage variance in actual return versus business case estimate

Objective Competitive Value

Metric Percentage of investment

Current Pe Per formance

Initiatives Develop a new product






























Operational Performance

Drilling Down into the Operations Operations Performance

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Operational Performance Metric Maturity Trajectory





























Balancing Business and IT Perspectives on Operation Operationss

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Monitoring User Impact and Standards Compliance




























Talent Management

Keeping and Attracting Top Performers

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Enterprise Initiatives

Giving Corporate Business Business Initiatives Their Due Detailing IT ’ ’s Contribution to Enterprise Initiatives In addition to its day-to-day operational role, IT often plays a critical role in enabling discontinuous enterprise-level business initiatives, such as post-merger integration or business process reengineering. By setting aside one category of the IT balanced scorecard to track IT’s contribution to the execution of these major business initiatives, CIOs are able to better manage the function’s enablement efforts and communicate those efforts to senior business decision makers and initiative sponsors. These communications efforts range from the nonexistent to the programmatic: An IT-Centric View of Performance —In most cases, IT balanced scorecards focus solely on IT’s efforts to better manage its own activities. The link between corporate strategic initiatives and the metrics tracked on the IT balanced scorecard is tenuous at best, as the scorecard has not been developed in conjunction with the corporate strategy, but rather as a stand-alone IT performance measurement tool. An Uncoordinated View of IT ’ IT ’ s Contribution —More advanced practitioners use the IT balanced scorecards to manage the

Spotlighting Enterprise Business Initiatives —Exemplar companies create a separate category on the IT balanced scorecard that tracks metrics of IT’s contribution to major corporate projects or initiatives, often over a multiyear period, for initiatives such as merger integration. These metrics act as a vehicle for communicating IT ’s value creation and are usually removed from the scorecard once the initiative has been completed.

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Enterprise Initiatives Initi atives Metric Maturity M aturity Trajectory Trajectory Relative Maturity of Enterprise Initiatives Metrics Illustrative Exemplar Spotlighting Enterprise Business Initiatives

Corporate Strategy

Sample Metrics: • Percentage of acquired company systems integrated in M&A category • Number of business process steps enabled by technology in Process Reengineering category Progressive Practitioner Uncoordinated View of IT ’ ’s Contribution

Sample Metrics: Altitude of Link to Strategy

• Percentage of acquired systems retired in Operational Performance category • Number of business process enablement projects completed in Project Performance category Baseline





























Putting IT on the Enterprise En terprise Stag Stage e Organization Background The Federal Aviation Administration has an annual budget of $14 billion and is responsible for oversight of air traf fic control, airport regulation and safety, and air regulation and certification. Scorecard Background In early 2001, the FAA’s IT department deployed an IT balanced scorecard that tracks strategy implementation in six key areas: financial performance, operational performance, talent management, user satisfaction, security and safety, and eGovernment. The FAA CIO and the CIOs of each of the FAA’s divisions review the scorecard on a weekly basis, and the same group reviews the scorecard’s categories and metrics yearly to ensure that they are aligned with the organization’s stated strategy. The scorecard includes the current status, two-year targets, and interim milestones for each metric, and documents potential risks that could jeopardize the achievement of those targets. It is published on the FAA’s intranet site and is visible to the entire IT organization.

agencies to establish an enterprise architecture by 2004 and to move services to the Web as part of the eGovernment initiative. This urgency in developing and implementing an enterprise architecture and migrating to electronic service delivery has led the FAA to create a stand-alone eGovernment category on the IT balanced scorecard, distinguishing these efforts from the other project-related metrics tracked in the scorecard’s operational performance category. c ategory. Improving Customer Service and Ease of Use The eGovernment category of the FAA’s IT balanced scorecard includes three main objectives. The first is to make interaction with the FAA easier and faster through the migration to Webbased technologies. The second is to ensure the consistent delivery of services by adopting standard guidelines for Web architecture, interface design, and content presentation. Finally, the FAA aims to ensure that data shared internally and externally are timely and accurate. Generating Cost Savings Through Higher Visibility

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Increasing Awareness of IT ’s Contribution to Enterprise Initiatives The FAA’ s IT organization elevates eGovernment efforts to the category level to underscore IT ’ s enterprise contribution Current and next year targets as well as project milestones listed to inform “gap to goal ” discussions

FAA’’s IT Balanced Scorecard FAA Sample Metrics

eGovernment (Illustrative) Objective

Metric


• Percentage of IT investment dollars managed using best practices as determined by appraisal • Percentage reduction in adaptation cost per system

Current Performance

Current Year Target

Status

Milestones

Potential Risks

Reduce the Burden on Customers by Better Leveraging Leveraging Web-Based Technologies

Percentage of applications migrated to Web

90 %

100 %

• Inventory baselined • E-authentication service interfaces defined

• Tools for e-authentication services may be required

Ensure Effective Service Delivery Capabilities

Percentage of FAA Web sites that comply with Web architecture, requirements, style, and content guidelines

7%

10 %

• Milestones to be collected and updated by CIO of fice

• Possible change in due date

Ensure that Data and Information That Are Used to Conduct Critical Agency Business or Publicly

Percentage of FAA information systems critical to agency business or used

60% New 15% Legacy

50% New 10% Legacy

• Systems using approved data elements baselined • Additional 250 data

• Ability to monitor compliance will be challenging


• Percentage of program components compliant with the “to be” enterprise architecture • Percentage of shared components, standards, and infrastructures across multiple applications Talent Management

• Percentage of program managers with project management certification User Satisfaction

Number of information quality complaints received



























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Scorecard Rollout

A Process, Not a Document Company Background Bowne & Co., a New York-based document, information management, management, and printing solutions provider, provider, has $1 billion bill ion in revenues and 8,000 employees. The Balanced Scorecard as a Closed-Loop Process Bowne’ Bowne’s IT organiz ation implemented implemented its balanced bala nced scorecard in 2000 as part of a corporate-wide scorecard initiative, spurred by the arrival of a new CEO. This scorecard implementation implementation and life- cycle process involves seven key steps:

—The same CTO-led team then creates a 4. Metrics 4. Metrics De fi De finition nition— defi definition for each of the metrics on the I T balanced scorecard. This defi definition includes a one-sentence description, an overview of the measurement technique used to track the metric— metric —for example, a user survey or a da shboard— shboard—and a list of initiatives that must be undertaken to enable the tracking of the metric using the outli ned technique (for instance, the development development or purchase of new reporting software). 5. Assigning 5. Assigning Metric Ownership —Each of the metrics on the scorecard is assigned an owner who reports directly to t he CTO.

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Scorecard Rollout

The IT Balanced Bala nced Scorecard Life Cycle Bowne creates a “ closed-loop closed-loop” IT balanced scorecard process 1. Kick Off Training for IT Staff

• Balanced Scorecard 101 for divisional and functional senior managers Initial strategy alignment and metrics

Bowne’ Bowne’s IT Balanced Scorecard Adoption Process Illustrative

7. Scorecard Review and Revision

Process Costs Initial consulting fees

• CIO, CTO, and corporate of ficers review scorecard every six months




























Data Collection and Quality Assurance

Making Data Collection a Part of the Job Assigning Data Collection Responsibility While establishing and continually updating categories and metrics is critical for the success of an IT balanced scorecard, those metrics are useless if the underlying data are outdated or inaccurate. Most IT organizations have loosely defi defined responsibility for metrics collection, adding names of “ of “metrics owners” owners” to their scorecards. Exemplars defi defi ne a clear collection process, designating an owner for each metric, and in some cases, basing a portion of the owner’ owner’s compensation on timely, accurate delivery of data. By creating greater accountability for reporting, CIOs maximize the scorecard’ scorecard’s decisionmaking effectiveness, ensuring the completeness and accuracy of data, as well as its comparability over time.

metric experts to collect the individual data elements required to create scorecard metrics. fing —Once the required data have been extracted from source 3. Data Proo fing systems and aggregated by the regional collection agents, they are passed along to the collection coordinator, who conducts an initial check of data completeness and accuracy. fication —If the required data are not present or a particular data 4. Data Veri fication point seems out of line with past performance, the collection coordinator then directly taps the relevant local metric expert for verifi verification.

5. Data Finalization — Once the local metric expert verifi verifies the accuracy of

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Data Collection and Quality Assurance

Routinizing Scorecard Data Aggregation Cemex ’ ’s IT organization clearly defines a data collection process and roles to ensure timely, accurate scorecard data Cemex’ Cemex’s IT Balanced Scorecard Data Collection Process Illustrative

1

Data Request

Collection coordinator (a direct report to director

2

Data Collection

Four regional collection agents coordinate with local

3

Dat a Proo fing

• Collection coordinator receives data from regional collection agent and conducts initial accuracy check






























Scorecard Review and Revision

Making the Scorecard a Living Document

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Scorecard Review and Revision

Ensuring Continued Scorecard Comp C ompara arability bility and Relev R elevance ance




























Facilitating Scorecard Adoption

Encouraging Encouraging Scorecard Use at at All Al l Levels of the IT Organizati Organiz ation on

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Facilitating Scorecard Adoption

Making the t he Scorecard Relevant Relevant to the Whole Whole IT Organization Organization




























Designing and Implementing an IT Balanced Scorecard

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Cemex’s Informati In formation on Technology Technology Balanced Scorecard Scorecar d Financial Objective

Optimize cost of IT services

Metric

Current Performance

Status

Current Performance

Status

Total cost of IT oper ations per employee Total cost of IT operations as percentage of total sales

Customer Objective

Metric

Ensure consistently consistently availabl available and and reliable reliable services services to IT users

Percentage Percentage complianc compliancee with service level agreements agreements

En Ensu sure re that that IT solu soluti tion onss mee meett the the busi busine ness ss need needss

Busi Busine ness ss alig alignm nmen entt ind index ex (exe (execu cuti tive ve mana manage geme ment nt surv survey ey))

Meet employee IT service needs

Level of ser vice -m -mindedness and professionalism (end -u -user sur vey)

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Cemex’s Informati In formation on Technology Technology Balanced Scorecard Scorecar d Process Objective

Metric

Current Performa nce

Status

Current Performa nce

Status

Percentage of deviation from plan of projects exceeding budgeted time

Excel at managing projects

Percentage deviation from plan of projects exceeding budget Percentage of IT projects budget managed by program management of fice Operate data centers ef ficiently

System availability Number of unplanned system/network stoppages Percentage of servers outside of CPU utilization standards

Maintain reliable of fice computing and telecom infrastructures

Network reliability index Percentage of obsolescence (PC, data, and voice networks)

Provide effective user support for IT services

Weighted average of incident/problem resolution time by priority Percentage of incidents resolved at first level

Learning and Innovation Objective

Develop operational, coordination, and project management capabilities in the IT staff

Metric

Percentage of IT staff certified in project management Percentage of IT staff certified in coordination skills Percentage of IT staff certified in operational cost structure understanding




























Corning’s Information Technology “Road Road Map M ap” A Journey to Excellence To facilitate its ongoing performance improvement initiative, “Journey to Excellence,” Corning’s IT organization has adopted a set of automotive metaphors. The IT balanced scorecard is the “road map” for IT improvement and includes a maximum of 1,000 “miles,” with each mile designating further progress toward established goals. Each of the scorecard’s four categories is equally weighted at 250 total miles. Corning supplements the “road map” with an “odometer”—a more detailed view of scorecard metrics that allows Corning to assess its progress along against goals, and is one of the inputs used to determine bonus compensation. For additional details about Corning’s “odometer” please see page 63.

Corning’ Corning ’s “Road Map” Map” for 2003: IT Strategic Goals

Value

Process Excellence

IT Excellence

People

Objective

Objective

Objective

Objective

Support the company’s strategy at a significantly lower cost

Measures of Success

1. Meet commitments for

Deliver the projects and services which our customers require

Measures of Success

3. Meet project

Standardize the processes which are critical to our success

Measures of Success

5. Strengthen and expand

Effectively transition to, and begin operating in, a new organizational model

Measures of Success

6. Effectively transition

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Corning’s Information Technology “Odometer” Value — —Support Support the company’ company’s strategy at a signifi signi ficantly lower cost Objective

Met ric

Potential Score

World orldw wide ide IT IT spe spend ndin ingg per perfo form rman ance ce vers ersus goal oal

150 Mile Miless

100 00% % of of goa goall 98% of goal 96.5% of goal

Update and integrate Business and staff unit strategy creation maturity unit IT strategies trajectory (Includes IT strategy refreshment, identification of shared services leverage points, and creation of a program portfolio)

100 Mil Miles es

Unit Unit IT stra strate tegy gy ref refre resh shed ed to reflect changes in business strategy Strategy refreshed, including opportunities to leverage global shared services organizations Strategy refreshed, shared services leveraged, and 2004 programs incorporated into operating plan

Meet commitments for worldwide IT cost

Per formance Scale

90 Miles 120 Miles 150 Miles 60 Miles 80 Miles 100 Miles

Process Excellence — Excellence —Deliver Deliver the projects and services which our customers require Objective

Met ric

Potential Score

Per formance Scale

Meet project commitments

Project performance index measure for 20 representative projects selected by unit CIO/ program of fice (Evaluation dimensions include business value and capabilities delivered, financial and schedule performance, project management quality)

125 Mi Miles

Avera erage sc score 1.8 1.8 Average score 2.0 Average score 2.2

Meet service

SLA compliance for 10 key shared services

10 1000 Mile Miless

Minim Minimal al thres thresho hold ld of comm commitm itment entss met met

75 Miles 100 Miles 125 Miles

6 Miles/Service




























Corning’s Information Technology “Odometer”

IT Excellence — Excellence —Standardize Standardize the processes which are critical to our success Objective

Strengthen and expand processes to plan and coordinate work

Metric

Potential Score

Definition, implementation, and measurement of the following processes: • Performance excellence • Business case analysis • Demand management • Prioritization • Time tracking

250 Miles

Per formance Scale

Process fully defined, pilots complete Process fully deployed and measured 2004 improvement plans in place

30 Miles/Process 40 Miles/Process 50 Miles/Process

People —Effectively People — Effectively transition to, and begin operating in, a new organizational model Objective

Metric

Potential Score

Per formance Scale

Effectively transition Number of unit CIOs and IT shared services leaders the workforce to creating a transition plan for their employees within new model designated time frame

10 1000 Mile Miless

All All unit unitss mee meett thei theirr plan plan,, som somee late late All units meet their plan All units meet their plan, some early

Meet employees’

150 Mile Miless

88% of deve develo lopm pmen entt plan plan obje object ctiv ives es met met

Perc Percen enta tage ge of staf stafff deve develo lopm pmen entt plan plan obje object ctiv ives es met met

60 Miles 80 Miles 100 Miles 90 Miles

84





























J.D. Edwards’ IT User Satisfaction Satisfaction Survey

The J.D. Edwards Information Technology department would like you to take a few minutes and complete the following satisfaction survey. The valuable feedback you provide will be used to improve the tools and services IT provides the JDE Enterprise. I f any question does not seem to apply to you, please skip to the next question. When you are Þ nished, nished, please click the Submit Survey button at the end of the survey. Thank you for your time and help. General Information

c. Speed and reliability of access to data data on





























Help Desk

8. Please rate your satisfaction with the IT Help Desk a. Overall Performance b. Timelessness in providing repairs or services c. Courteousness of HD Staff d. Ability of HD staff to understand and address the issue

Voice Services

12. Please rate your SATISFACTION SATISFACTION with the I T voice services (Phones, Cellular, Pager, Calling Cards) a. Overall performance of internal internal voice services and support b. Information provided to you about voice services

86




























Remote Access

16. Please rate your satisfaction with IT remote access (or dial up) services. If you do not utilize remote access in your position at JDE please skip to question #18. a. Ability to use broadband services top connect to JDE b. Ability to use wireless access in any



























88
























































Balanced Scorecard Software Tools

90



























Balanced Scorecard Software Tools and Consulting




























Bolt-Ons to Enterprise Systems

92



























With Sincere Appreciation Appreciation



























94











































































CIO Executive Board - IT Balanced Scorecards

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