13.4.6 Measuring Performance Using Appropriate Metrics
CI3Os express frustration that decision makers in their enterprises view technology as a
commodity and use cost-oriented evaluations such as decreasing costs or ROI. Traditionally,
organizations manage IT on a series of cost-driven, rather than value-driven, metrics. There is a
great divide between the IT funding levels and existing performance measurement criteria. Most
business executives measure the value of their business in terms of market share, debt-to-equity
ratio, and inventory turns, but in information systems that is not the case.
Regardless of what is on hand or what needs to be purchased for the proper connectivity strategy,
the upper management needs a clear ROI projection before any of the actual work required to
establish an IT organization can begin in earnest. Some pertinent questions could be: in the process
of strategic integration, is it possible to merge the current channels – online sales, customer portals,
salespeople, marketing efforts – into one platform? Is it possible to shift information systems
resources to gain richer interactions with customers and increase cost-effectiveness? Is it possible
to add another layer to the existing structure rather than overhauling the current set-up? Is it
necessary to overhaul the infrastructure or is it possible to outsource the entire effort?
The answers to these questions give the CIO an idea of ROI metrics in the medium and long term,
but they also give solid parameters to judge how long such an initiative will take to be successfully
implemented. This is the type of information CEOs and COOs need in order to determine whether
the connected enterprise ‘ends’ will justify the fiscal ‘means’, even with annual budgets potentially
shrinking by 10% over the next few years.
After instituting measurement methods, it is vital to use the data to establish information systems
metrics that highlight the value of IT. A ‘CIO dashboard’ or software can integrate the various
streams of data into one place to show the important value indicators that help the CIO manage the
performance of an organization, according to the right measures.
The key here is to find the right things to measure, and modify targets based on experience and
benchmarking. There are plenty of dashboards, for example, which measure mechanical things
such as server and network uptime, how fast requests for enhancements get fulfilled, or help-desk
metrics. But there are no dashboards for IT executives that tell them whether they are providing
value for the money spent, and which would measure things such as staff utilization, the health of
the application suites and infrastructure, and asset management by portfolio.
If the top five or six people in the IT group can see those things relatively easily and use the
dashboard to drill down further into the issues and problems, it will help add value. The key is to
keep it relatively simple, and to make sure the data is timely.
13.4.7 Communicating Performance and Value
Once IT executives get their performance measurements in place, they need to share the value
metrics throughout the company. One of the first places where this should happen is at the
executive committee meetings. Technology strategy should be absolutely transparent, in
presentation form, with all the details (not only technical but also business/process) to which the
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