Unblocking The Main Thread Solving ANRs and Frozen Frames
IT Scorecard: An Approach to IT Performance Measurement
1. IT Scorecard:IT Scorecard:
An Approach to IT Performance MeasurementAn Approach to IT Performance Measurement
Amy FowlerAmy Fowler
Managing PartnerManaging Partner
Lewis & Fowler, LLCLewis & Fowler, LLC
2. IntroductionIntroduction
• Managing Partner, Lewis &
Fowler
• 20 Years IT Leadership and
Consulting Experience
• IT Scorecard & Metrics
Implementation Consultant
• Industry experience includes
insurance, retail, financial, utility,
consulting, wholesale
distribution, telecommunications,
travel and aviation among others
• B.S Computer Science, PMP
• Business Consulting Practice Director
• 25 Years IT Leadership and Consulting
Experience
• IT Scorecard & Metrics Implementation
Consultant
• Industry experience includes petrochemicals,
newspaper publishing systems, manufacturing,
electric utilities, pulp and paper, government
services, defense systems and aerospace and
semiconductors
• Physics graduate degree, MBA in Systems
Management
3. Today’s Session ObjectivesToday’s Session Objectives
Introduction to Balanced ScorecardIntroduction to Balanced Scorecard
Introduction to use of Balanced ScorecardIntroduction to use of Balanced Scorecard
in ITin IT
Discuss aligning Business and IT objectivesDiscuss aligning Business and IT objectives
Use of scorecard in gaining visibility intoUse of scorecard in gaining visibility into
current and future IT performancecurrent and future IT performance
Determine possible fit and how to leverageDetermine possible fit and how to leverage
scorecard for G-WHC Information Servicesscorecard for G-WHC Information Services
4. Seminar OutlineSeminar Outline
• Organizational Strategy andOrganizational Strategy and
AlignmentAlignment
• Introduction to BalancedIntroduction to Balanced
ScorecardScorecard
• Unique Nature of IT ScorecardsUnique Nature of IT Scorecards
• IT Scorecard DriversIT Scorecard Drivers
• IT Scorecard BenefitsIT Scorecard Benefits
• IT Scorecard ChallengesIT Scorecard Challenges
• Group ExerciseGroup Exercise
• Successful IT ScorecardsSuccessful IT Scorecards
• High Level Roadmap & TimelineHigh Level Roadmap & Timeline
• Metrics ExampleMetrics Example
• Group ExerciseGroup Exercise
• Next StepsNext Steps
5. Business and IT ChallengesBusiness and IT Challenges
Top Challenges of Today’s OrganizationsTop Challenges of Today’s Organizations
1.1. Improving operating efficiencyImproving operating efficiency
2.2. Reducing costsReducing costs
3.3. Improving customer service andImproving customer service and
relationshipsrelationships
4.4. Creating competitive advantage withCreating competitive advantage with
technologytechnology
5.5. Applying technology to increase productivityApplying technology to increase productivity
6.6. Driving accountabilityDriving accountability
7.7. Aligning information technology (IT) with theAligning information technology (IT) with the
business strategiesbusiness strategies
8.8. Gaining visibility into current IT performanceGaining visibility into current IT performance
6. Building an IT Strategy Takes Many StepsBuilding an IT Strategy Takes Many Steps
Vision
(Stakeholders)
Vision
(Stakeholders)
Capabilities
(Implementers)
Capabilities
(Implementers)
Vision Articulated by Stakeholders
Translation of the Vision into CSF’s done by IT
Capabilities based on current skills
and tool set
Strategy becomes
self evident
Feedback and measurement against Balanced Scorecard
Strategy
Execution
Strategy
Execution
IT
Strategy
IT
Strategy
Critical
Success
Factors
(CSF)
Critical
Success
Factors
(CSF)
7. What is Balanced Scorecard?What is Balanced Scorecard?
It’s a frameworkIt’s a framework
It's a measurement systemIt's a measurement system
It’s a communication systemIt’s a communication system
It’s a process for improvementIt’s a process for improvement
8. Balanced Scorecard 101Balanced Scorecard 101
Financial ProspectiveFinancial Prospective
Customer PerspectiveCustomer Perspective
Process PerspectiveProcess Perspective
Growth PerspectiveGrowth Perspective
Financial ProspectiveFinancial Prospective
Customer PerspectiveCustomer Perspective
Process PerspectiveProcess Perspective
Growth PerspectiveGrowth Perspective
If we succeed, how will weIf we succeed, how will we
look to our shareholders?look to our shareholders?
To achieve our vision, howTo achieve our vision, how
must we look to ourmust we look to our
customers?customers?
To satisfy our customers’To satisfy our customers’
value proposition, whatvalue proposition, what
must we excel at?must we excel at?
If we are to succeed, whatIf we are to succeed, what
must we do to learn andmust we do to learn and
improve?improve?
If we succeed, how will weIf we succeed, how will we
look to our shareholders?look to our shareholders?
To achieve our vision, howTo achieve our vision, how
must we look to ourmust we look to our
customers?customers?
To satisfy our customers’To satisfy our customers’
value proposition, whatvalue proposition, what
must we excel at?must we excel at?
If we are to succeed, whatIf we are to succeed, what
must we do to learn andmust we do to learn and
improve?improve?
Balanced Scorecard is a framework for translating vision into strategy
by asking and answering the following questions.
Balanced Scorecard is a framework for translating vision into strategy
by asking and answering the following questions.
9. Customer (Client)
To achieve our
vision, how
should we
appear to
our clients?
O
bjectives
M
easures
Target
Financial
To succeed
financially,
how should
we appear
to our
shareholders?
O
bjectives
M
easures
Target
Success is
Measured from
Four
Perspectives
“Classic” Balanced Scorecard
To achieve our
vision, how
will we
sustain our
ability to
change and
improve?
O
bjectives
M
easures
Target
Learning and Growth
To satisfy our
stakeholders,
what business
processes must
we excel at?
O
bjectives
M
easures
Target
Internal Business Process
10. What’s Unique About An IT Scorecard?What’s Unique About An IT Scorecard?
Balances corporate andBalances corporate and
IT strategiesIT strategies
Demonstrates enablingDemonstrates enabling
valuevalue
Cuts across the entireCuts across the entire
businessbusiness
Different types of metricDifferent types of metric
datadata
Has unique businessHas unique business
issues to solveissues to solve
Captive customersCaptive customers
More technology leverMore technology lever
than business processthan business process
IT is capital intensiveIT is capital intensive
11. Aligns Visible Targets to
IT Strategy
Answer Business Unit
Questions about IT
Creates tangible achievable goals
Closes the gap between vision and execution
Drives actionable outcomes
“What are we getting for our money?”
“What is IT working on? What are the priorities
and where do I fit in?”
“Help me understand what all your resources are
doing.”
“How do IT projects help my bottom line?”
Why IT Scorecard?Why IT Scorecard?
IT Executive Leadership
Tool to Drive
Accountability
Collaboration
Communication
Exposure of competencies and areas for
improvement
Discipline
Expectation setting
Raising the bar for performance
12. Strategic
• Translates strategy into
manageable set of measures
and metrics
• Ties CEO/Business view of IT
message
• Provides Senior Leaders with
the instrumentation they
need to navigate to future
success
• Drives organizational change
and high performance
• Increases the perception of IT
value – “Marketing” of IT
• Ability to make trade offs
• Consistent visibility across
organization on important
measurements
• Gives visibility to cross
section of audiences - the
“cover page” of what IT is
focused on improving
• Provides a framework for
developing scorecards for
individual work groups
• Highlights areas for
improvement
Benefits Of An IT ScorecardBenefits Of An IT Scorecard
Need both tactical & strategic metrics to be successful!
Tactical
13. Provide visibility
into organizational
challenges
Influence IT
asset ROI
Create metric-
impacting
programs
Serve as a true
change agent
Create
S.M.A.R.T.
Goals -
Specific,
Measurable,
Action-
oriented,
Realistic
and Timely
Address
scorecard target
audience
Successful IT Scorecards…Successful IT Scorecards…
Include constant
feedback loop
mechanisms
Involve long-term
commitment
14. Inertia
Compelling
Case for Action
Powerful
Future Vision
Typical Forces
Resisting
Change
• Risk aversion
• Organizational culture
• Vested interests
• Operational habit force
• Risk aversion
• Organizational culture
• Vested interests
• Operational habit force
Current
State
Why Not More IT Scorecards?Why Not More IT Scorecards?
15. IT Scorecard -IT Scorecard - Group ExerciseGroup Exercise
Breakout into 2 groupsBreakout into 2 groups
What challenges do you see adoptingWhat challenges do you see adopting
something like this for G-WHC IS?something like this for G-WHC IS?
10 minutes – Group discussion and creation of10 minutes – Group discussion and creation of
report outreport out
16. Implementation ChallengesImplementation Challenges
No awareness of need to create
an IT scorecard
Lack of senior leadership
sponsorship
Failure to identify correct metrics
Underestimate the depth of
cultural change involved
Current state of metrics is
unknown
No method to evaluate progress
Expect quick, short-term gains;
unwilling to mature over 2-3 years
Perform scorecard self-
assessment
Illustrate scorecard value to
CIO/CEO before kick-off
Utilize skilled scorecard
implementation resources to ID
proper metrics for your company
Spend time to create baseline up
front
Define measurement tool
Show small and incremental
successes along the way
ChallengesChallenges SolutionsSolutions
17. • Analysis of
results vs.
targets
• Apply experience
• Adjust according
to changes in
business
• Compare
performance
measures against
goals
• Analyze metric
trends and ID
root causes of
performance
Example IT Scorecard ProcessExample IT Scorecard Process
Topical
Implementation
Identifying
Tactical
Implementation
Monitoring
• Confirm
Alignment with
business strategy
• Survey the
business
• Survey IT
ownership
• IT value profile
• Apply industry
best practices
• Define top level
measures
• Connect to bigger
corporate
performance
measurement
strategy
• Business
goals/metrics
Identified
• Data sources
identified
• Delivery tool
mechanism
identified and
implemented
• Define
intangible
measurements
• Major
communication
begins
• Individual
performance
metrics tied to
overall IT
measurements
• Behavior of IT
SLT supports
goals
• Process
program
changes
• Begin intangible
measurement
observations
Evaluating/
Modifying
• Fine tune
targets
• Apply
experience
• Benchmarking
with Industry
• Adjust
according to
changes in
business
• Compare
performance
measures
against goals
• Connect to
Annual
Strategy
Planning
Efforts
18. Sample High Level RoadmapSample High Level Roadmap
Q1 Q2 Q6+
Identifying
Implementation
Monitoring
• Confirm alignment with business
strategy
• Survey the business
• Survey IT
• IT value profile
• Apply Industry best practices
• Define goals, measures, metrics
Phases
• Analysis of results vs. targets
• Adjust accordingly to changes
in business
• Compare performance against
goals
• Analyze metric trends and ID
root cause of directionally poor
performance
• Sources for metrics identified
• Intranet Site Implemented
• Process changes begin
• Communication
Identifying
Monitoring
Evaluating/Modifying
Q3
Evaluating/Modifying
• Continuous Improvement
• Calibration of Subject Areas
• Identification of new
goal/measure/metrics
Q4 Q5
Scorecard Implementation
19. Goals Measures
Classic Scorecard
Category
Alignment
Control IT
expenses
Percent compliance with budgetPercent compliance with budget
Percent allocation of budgetPercent allocation of budget
IT expenses per staffIT expenses per staff
FinancialFinancial
Measurable
business value
of projects
Financial evaluationFinancial evaluation
Business evaluationBusiness evaluation
ClientClient
Measurable
value of IT
functions
Percentage of development capacityPercentage of development capacity
engaged in strategic projectsengaged in strategic projects
Relationship between newRelationship between new
development, infrastructuredevelopment, infrastructure
development, and maintenance anddevelopment, and maintenance and
operationsoperations
Internal Business ProcessInternal Business Process
Measure IT skills
vs. architecture
strategy
Percentage of resources within skillPercentage of resources within skill
categories such as mainframe, .net,categories such as mainframe, .net,
project management vs. IT targets andproject management vs. IT targets and
industry expectationsindustry expectations
Learning GrowthLearning Growth
IT Metrics ExampleIT Metrics Example
20. Recommended Usage of IT ScorecardRecommended Usage of IT Scorecard
Create local center/functional cascading metric programsCreate local center/functional cascading metric programs
– link to overall IT Scorecard.– link to overall IT Scorecard.
Performance Goals – tie to metric expectations in 2006Performance Goals – tie to metric expectations in 2006
and beyond, define the so what for your organizations.and beyond, define the so what for your organizations.
Innovate and help prioritize metrics to focus on eachInnovate and help prioritize metrics to focus on each
year to improve maturity of overall organization throughyear to improve maturity of overall organization through
feedback and survey vehicles provided in IT Scorecard.feedback and survey vehicles provided in IT Scorecard.
Incorporate reviewing these and your local metrics intoIncorporate reviewing these and your local metrics into
your regular “run the business of IT” routine.your regular “run the business of IT” routine.
Create a consistent localized agenda items used inCreate a consistent localized agenda items used in
discussing IT Scorecard “so what”.discussing IT Scorecard “so what”.
22. IT Scorecard -IT Scorecard - Group ExerciseGroup Exercise
Video ReviewVideo Review
Breakout into 2groupsBreakout into 2groups
How does using the concept of ITHow does using the concept of IT
Scorecard differ from what IS is doingScorecard differ from what IS is doing
today?today?
Extra – How could this method impactExtra – How could this method impact
overall IS perceived value to businessoverall IS perceived value to business
partners?partners?
10 minutes – Group discussion and creation of10 minutes – Group discussion and creation of
report outreport out
23. SummarySummary
• View IT as key
enabler to your
business
• Recognize the
significant
spend on IT
• IT scorecard
for managing
dials and
gauges of IT
performance is
a must
24. Next StepsNext Steps
Digest IT Scorecard as
management tool
Diane call debriefing meeting
Decide on if and how to move
forward
Get endorsement and support
Begin IT Scorecard journey
1st 5 bullets – are your metrics addressing these? Last 3 organizational benefits to having an IT scorecard
1st 5 bullets – are your metrics addressing these? Last 3 organizational benefits to having an IT scorecard
What is a scorecard, business scorecard and IT scorecard, why bother with one for IT – Run IT like own business - diff objectives and data focus areas are different - financials generally fixed, customers wear same badges, doing stuff should be doing differently, changing external technology impacts, processes that are not value added
IT Strategy is not part Corporate Strategy, has own set of goals and objectives, but has to be aligned to the corporate strategy
IT needs to use the scorecard as a tool to show visible value to corporate bottom line
IT subject to whims and pace of technology market
Rest are outcomes of having both aligned
<number>
Examples of natural cases for action – mergers, acquisitions,
<number>
See slide with all SA.
Make it real.
Collaboration rather than hammer.
Write SA’s on flips to get started.
Desire or awareness to create
Lack of call to action
Cultural Change
Not visible through a live format – ppt paralysis
<number>
<number>
High level timeline that lets them know this is an evolutionary process and we will be continually working on operational excellence and monitoring ourselves against our goals.
Minor work on technology, major work on process improvements. Will tie in and help facilitate current initiatives as well as overall prioritization; all based on organizational maturity and input.
<number>
Last metric example
<number>
<number>
How visualize an IT scorecard in an enabling tool
<number>
See slide with all SA.
Make it real.
Collaboration rather than hammer.
Write SA’s on flips to get started.
<number>
What are “dials” I can actually change?
What kinds of changes can be measured immediately?
Which changes are more difficult to make and measure?
What is the outcome of whatever dial I do change?
Journey – trip – without some type of data
<number>
Benefits of using L&F as external vendor to assist:
allows company to focus on their core business and not be distracted by this process
can be difficult for entrenched IT leadership to influence or have enough perspective to effectively diagnose their own issues (or have enough trust/credibility with their staff