It reveals that while poor performance measurement can damage both individuals and businesses, well-designed measures can make the crucial difference between mere survival and flourishing success. The report also identifies five ‘rules of the road’ that companies can follow to ensure effective IT performance measurement:
Rule 1: Choose the right vehicle. Too often organisations fail to fit their IT performance strategy to the true context of their business. If the business regards IT as a vital strategic resource, it will require world-class, ‘Rolls Royce’ performance. On the other hand, in companies where IT is seen primarily as a support function, it is more important to
drive a reliable saloon – i.e. to concentrate on the IT basics.
Rule 2: Tune the performance engine with appropriate measures. Once a business knows what it’s driving, it needs to choose the right measures to tune the engine for optimum performance. Businesses need to find the right balance of soft/hard, business/technical, and operational/strategic measures. The balanced scorecard emerges as the single most effective
means of measurement, but the report also notes IT departments need a ‘basket of metrics’ for different purposes and stakeholders. To be effective, these must also be clearly understood by the business.
Rule 3: Learn from other drivers. Comparing your performance with that of others is a natural instinct. A ‘quick dip’ comparison, such as looking at surveys published in magazines, can give you a broad indication of performance trends, but businesses can gain far more insight by drilling down into the detail. Done well, comparative IT benchmarking provides a valuable yardstick against which IT departments can assess their own performance. The report explores in detail how to maximise the potential benefits and avoid common pitfalls.
Rule 4: Watch the road ahead. Sustaining IT performance into the future means looking ahead. Ways of doing this are constantly being improved. Strategic benchmarking, for example, is about transforming a business activity by looking for new approaches in very different companies and sectors. It has been used in business for some time (the most famous example being Henry Ford coming up with the idea for the car assembly line after visiting a slaughterhouse), but only in recent years has it been applied to IT performance. Businesses should also consider alternative futures by using such methods as forecasting and scenario planning.
Rule 5: Build trust in the driver. All measures have a political side. To deliver IT performance successfully, IT teams need to be able to communicate effectively with the rest of the business. The ultimate measure of a CIO’s effectiveness is how often he or she is consulted on business strategy. Successful CIOs are those who learn to master not only
the science of performance measurement, but also the arts of politics and communication.
Margaret Smith, chief executive of CIO Connect, said: “This is one of the most insightful reports that I’ve seen for a very long time into any subject. The ‘rules of the road’ outlined in the report are the steps that will take you towards the right measures for your business going forward.”
She added: “One of the things that struck me was how mature benchmarking has become. Twenty years ago we had very bald measures. But over time metrics became so complex and technical that hardly anyone understood what they meant. Now we’re finding measures that really do drive IT performance in the way business needs.”
Andy Chestnutt, managing director, Compass UK commented: “Although measurement has matured significantly over the last two decades, IT has long struggled to demonstrate its value. Today, some organisations are tantalisingly close to success. I believe that this report has something for every CIO, whatever their stages of IT measurement maturity.”
He continued: “But we must remember that measuring IT for the purposes of demonstrating value is only half the story. The real value in measurement is not in the communication of your performance but in the improvement you make as a result of it.”
Background to CIO Connect
CIO Connect is the UK’s leading networking and intelligence organisation for CIOs in the UK. With more than 200 members across FTSE 250 companies and high-profile public-sector organisations, CIO Connect runs a comprehensive programme of events, including conferences, round-table meetings, forums and special interest groups. It also offers a unique online information service and a bi-monthly magazine, as well as conducting regular research surveys and producing in-depth reports on topics of relevance to CIOs. All these activities are designed to support CIOs in their role and enable them to take well-informed investment decisions.
CIO Connect was formed in 1998 by a team of senior industry figures who had themselves held CIO positions for a number of well-known companies. The organisation has always been run for the members, in line with their changing needs. In 2003, CIO Connect was acquired by the National Computing Centre.
