Wednesday, August 14, 2013

Does IT Need A Dashboard to Show Value to the Organization?

The dashboard is an effective method to show IT value.

As internal IT faces competition for the first time from end users with their own devices and App Store solutions and cloud providers that are trumpeting “better” economics and faster time to value, one has to ask the question, “how IT “markets” its activities and benefits to the organization it serves?” “How is IT showcasing the value it brings?”

1.    A Formal IT Governance Function is in Place

It is the Board and Executive Management who is accountable for the Value and performance of IT via effective governance discipline. Value is primarily measured financially, and the detailed metrics help measure the quality or warranty of IT services.

  • In mature IT governance, value delivery is defined by these four questions. All activities, projects can be measured against these.
    A: Are we doing the right things?
    B: Are we getting the benefits?
    C: Are we getting them done well?
    D: Are we doing them the right way? 

  • IT value to the business can be categorized in a number of ways, such as.
    A: Improving Speed/Agility (Speed to Market, ability to change etc)
    B: Improving Revenue (enable the business to gain market share)                                                     C: Customer Acquisition/Retention (optimize end customer experience...)
    D: Lowering Risk (reduces business system downtime, create business continuity)
    E: Lowering Cost (reduces the cost of the current business process, improve margins, freeing up capital for new ventures, etc).
  • There are at least three target audiences who are interested in IT value presentation: IT staff, IT management, and business leadership. Each has a different focus. And there are four main purposes for IT metrics:
    A: Provide transparency into IT
    B: Aid setting direction for IT
    C: Drive performance of IT
    D: Communicate the business value of IT.  

2. Dashboards are supposed to be Objective

What IT needs is good IT governance, the processes of which would populate the dashboard with information. Dashboards are a way of presenting information and are dependent on an array of other processes and technologies for their data input.

  • Two layers of dashboard: The CIO Dashboard - the Governance layer (the Evaluation, Scope, and Monitoring) and the tactical management layer (Run, Build, Deploy and again Monitor) can provide certain governance insight. Dash Boards are helpful to monitor KPIs and present the IT operations to higher management. 
  • The visualization of dashboard: A dashboard is a tool to visualize Key Performance Indicators and as such it certainly a must to show the metrics of the values and the effectiveness of the measured department (IT), or the measured activity produces. The dashboard is also a good tool to provide input to the decision maker, and help create a degree of abstractness in presentations that enables executives have their say in a meeting or make an effective decision. 
  • Dashboards are supposed to be objective: Services provided by IT are critical to efficiency and quality of operations of a corporation. Hence, it needs to be monitored and measured objectively, that it continues to perform optimally. A simple dashboard with a few basic instruments is helpful and illuminating.

3. Two Sets of Metrics

The purpose of measures is to focus on improving overall IT capabilities and climbing IT maturity ladder. However, the problem is that the IT folks tend to see value in things that aren't as important to the business. KPIs for IT need to be defined in keeping the view of the corporate objectives and put into a mix of other KPIs.

  • Transparency: IT metrics do need to be transparent and based on strong data governance and process excellence programs, so they are accurate and consistent, in order to have a chance of being believed and trusted. Financial data needs to play a large role in assessing value. Performance on SLAs is part of the value equation, for most senior execs, it is the financial analysis of the IT investment they are interested in, just like any other asset expenditure. 
  • There are two different sets of metrics. (1) The first set is the metrics internal to IT and used to run the operation. Things such as IT spending distribution and spending as a % of revenue, labor usage and distribution, operational stability, development status and quality, security posture, supplier performance, demand pipelines, audit findings, and internal budgets. (2) The second (and more important) set of metrics is those used to inform the business of IT value and performance. These should all be presented in business terms such that they are directly aligned with operational factors a business executive would find important to be familiar with and tracking. 
  • It is a very good idea to make IT metrics transparent to the other departments - to visualize the progress and also to evaluate if the KPIs being used are the same as the ones they use to describe IT activity. Also, make sure to involve the key stakeholders in the development of the scorecard they will be presented, and strive to minimize the overall number of metrics to share. 
The dashboard is an effective method to show IT value, furthermore, encourage the IT departments to create their own marketing plan for dealing with their different 'customers inside and outside of the organization. Consider who they are and what they value and make sure that every exposure to the IT team reflects the desired perception by the related segment.


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