Wednesday, November 2, 2016

The Monthly Performance Insight: IT Performance Management via Different Lens Nov. 2016

The fact of the matter is it's a lot easier to get metrics wrong than right, and the damage caused from getting them wrong usually exceeds the potential benefit from getting them right.

Corporate Performance Management is a management control from strategy till shop floor. "If you can't measure, you can't manage," legendary management guru Peter Drucker once asserted. He was right. Managing performance means understanding results, setting metrics, fixing plans, and making decisions to ensure it happens. It takes multifaceted approaches from multidimensional perspectives.

 IT Performance Management via Different Lens


Assessing IT Performance vs Multidimensional Lenses? IT metrics need to evolve to something that matters to the business audience, at the same time that "business sentiment" needs to get put into something more tangible, such as optimize processes, or improve productivity. The various activities needed to manage performance— STRATEGIC and OPERATIONAL plans, innovation METRICS, day-to-day decisions. Selecting the right key performance indicator is one of the most important steps in measurement because this process includes to answering why you are choosing that, how you will use them and whether you have enough resources to manage data. Always attempt to identify areas in which measurable improvements can be realized, providing demonstrable value is essential, in some instances, these areas have been low-hanging fruit. Your measures should cover all areas that contribute to value creation including service quality, employee engagement, customer satisfaction, innovation benefit, and financial outcomes.

Three Aspects of IT Performance Management Traditional IT organizations were running inside-out operation driven, CIOs and technique managers assess IT performance via the lenses of IT, and mainly about “keeping the business bottom line.” Hence, business partners perceive IT as a cost center, or support desk only, because they don’t have a clear picture with quantitative information about contemporary IT's value proposition, and thus, lack of knowledge on how critical IT contributes to the business’s top-line growth and customer satisfaction. Thus, managing performance and improving IT reputation means understanding results, setting metrics, fixing plans, and making decisions to ensure the strategic goals are on the right track to get implemented, and communicated effectively at the different level of the business. In order to reinvent the tarnished reputation of IT, CIOs need to focus on managing IT performance effectively via selecting key indicators, measuring both the right things and measuring them in the right way.

Three Perceptions of IT Value Proposition? IT is working hard to transform from a cost center to value center, but some of the challenges facing in IT valuation is that we attempt to apply the same measurement approach to all investments - yet there are unique attributes that differentiate one investment category from another. Further, too often, IT is driving by a look at rear mirror only, not pay enough attention to the front window and create forward-looking view upon how to run IT smoothly, or only focus on ‘tangible’ value, with ignorance of ‘intangible’ one. So what are the best way to present IT value?

Three Aspects in IT Metrics: "If you can't measure, you can't manage," legendary management guru Peter Drucker once asserted. He was right -- just not right enough. The fact of the matter is it's a lot easier to get metrics wrong than right, and the damage caused from getting them wrong usually exceeds the potential benefit from getting them right. This is particularly insightful to measure modern IT performance, it’s no longer a single discipline to measure efficiency anymore, how to measure IT effectiveness and business innovation effort is more crucial than ever.

IT Performance Management: Two-Level Value Delivery & Balance Scoreboard Traditional IT is still being labeled as cost center, as value hasn’t been conveyed in a structured or quantified way, or it only focuses on measuring internal value (cost efficiency, internal customer satisfaction), but it may not reflect the full set of value IT can bring to accelerate business growth or delight end customers. The issue here is: what is your understanding of value? Is it an economic measure? Is it a competitive measure (when you compare with other IT departments) or other perceptive values? How are you monitoring and quantifying IT department value in your organization? The tool is secondary if you don't speak the same language with your business partners. Therefore, both strategic and operational metrics are needed in order to paint a full picture of IT performance.

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