Sunday, June 4, 2017

The Logical Scenario of IT Performance Management

Continually accelerating changes in IT digitalization requires faster responses and better performance metrics.

Organizations rely more and more on technology; the IT organization has more and more to overcome and manage its performance from outside-in viewpoint. To break the mold, IT needs to rethink itself as an innovative and business leading organization, a change agent, and the innovation engine. First: It has to make an objective assessment of its effectiveness and maturity. And then, it has to provide both business and technological insight into how they bring the success to the company as a whole instead of being a support center only. Here is the logical scenario of IT performance management.

Make a fair business assessment and help IT management get some objective perspectives on what you are trying to manage: IT assessment (either via self-evaluation or the third party) is a great way to help identify what is right and wrong in your IT environment, develop and optimize the IT operational function within itself. Take a critical look at IT. IT leaders need to be honest with yourself about assessing the strengths and weaknesses of IT organization, the overall business goals, and objectives based on self-evaluation and feedback result. There are quantifiable elements such as inefficiencies which can be brought to light, the qualitative elements such as ineffectiveness that there is a disconnect between IT and the business, by leveraging the right performance management system. The key thing in measuring multidimensional value, by the IT organization as well as the business is the process of benefits realization.

Select the right set of indicators of IT improvement, innovation, and investment, really focus on key metrics that correlate to better business outcomes and measure them effectively: Selecting the right KPIs is one of the most important steps in IT measurement and performance management because the processes includes to answering why you are choosing that, how you will use them and whether you have enough resources to manage data as well as present them persuasively. To reinvent IT reputation, IT metrics has to evolve from being a cost center to becoming a revenue generator. IT leaders must keep in mind which KPIs best measure IT capability to deliver business value. A set of IT performance indicators should show a clear link to C-Level executives between IT efficiency and top-line revenue generation. This increasingly puts emphasis on the complex personal interactions required to make IT function as a strategic partner of the business, and present IT as an integral part of the company.

Connect the IT performance management dots to tell the full story with the business context, as performance management is not an isolated management discipline: Historically, performance measurement systems for most businesses have been financing driven. In many business situations, financial indicators only cover part of the story. Every measure selected should be part of a link of cause-and- effect business relationships, ending in financial objectives that ultimately affect the growth and the long-term perspective of the organization. Hence, it’s important to connect IT management dots because every new technology adopted should facilitate the business but also bring down the incremental cost of growth and the time to market. The highly effective measurement and performance management can help IT leaders present data-based IT results which impact the top & bottom-line business result more pursuasively, drive business growth and build organizational competency.   

Design the management scoreboard to assess the performance progress to strategic business goals whereas build a dashboard to assesses IT performance to operational goals: The well-designed balanced scoreboard with intuitive interface offers a visual presentation for a corporation to gain a wider perspective on its strategic decisions by considering the impact on finances, customers, internal processes and employee satisfaction. A well-defined scorecard should contain a good mix of metrics measures long-term strategic value, and the management dashboard helps to track the progress in the short term (operational value) accordingly. They should be brief enough to keep focusing on the most strategic business initiatives and the most fundamental IT functionality for making effective decisions. The intuitive visualization is also important factors in make execution dashboard more effective, minimize the overall number of metrics to share the logical business flow.

Act on what the performance indicators are telling you is vital to sustaining business results and improving organizational maturity: Tracking KPIs and benchmarking are essential to IT transformation, though IT measurement is not the end itself, the goal behind it is to track the right metrics and know what to do with them to see improvement. The Performance indicators selected are also not static, you must change them from time to time accordingly to fit for the strategy focus, and always pay more attention to the bigger picture of the dynamic business reality. From talent management perspective, achieve business progress by measuring the key objectives in a mix of team and individual objectives and highlight examples of progress and performance you want to encourage.

Continually accelerating changes in IT digitalization requires faster responses and better performance metrics. IT performance needs to well reflect the multidimensional business value in which IT can contribute both strategically and operationally, to capture both short term gain and long term win. The logical scenario of IT performance management helps to leverage IT investment priority, IT management portfolio, customer satisfaction, and also make continuous improvement to improve business competency.

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