Stepping Up to the Metrics Challenge
The challenge is to develop a set of metrics that, when achieved collectively, ensure that IT is aligned with the business objectives and strategic direction of the organization. To develop "Aligned Metrics" requires that IT know and understand the:
- Organization's business goals, objectives and strategic direction for the next three to five years.
- Challenges facing the organization and its industry (competitive, regulatory, environmental, etc.)
- History of the organization and how its culture has evolved to its current state
- Core Business Processes of the organization and related efficiency, effectiveness and IT issues
- Mind set and philosophy of management and the political environment that people work within
Armed with a clear understanding of the above, the CIO can develop a set of metrics that can be driven down into their organization that, if achieved, can only contribute to the success of IT, themselves, their staff and the organization.
The trap that must be avoided is to create too many metrics or to create metrics that are cost prohibitive to measure, monitor and manage. Ideally, the CIO will start with a set of four to six overarching metrics by which IT on a whole will be evaluated. Each of these metrics should focus on the primary areas where IT delivers value to the organization, such as:
- Leveraging existing core business functions (processes) ability to deliver value faster and more efficiently to stakeholders
- Positioning IT's ability (infrastructure, business applications, organization and strategic alliances) to respond quickly and effectively to changing business conditions (competitive, new acquisitions, mergers, regulatory, environmental, etc.)
- Protect the infrastructure and information assets of the organization from destruction, theft and misuse (i.e. security, risk management, disaster recovery and service level continuity)
Each metric should be stated in terms of the perceived current performance level and the level that needs to be achieved during this and subsequent years. For example, perhaps the project (needed improvements to core business functions) delivery track record of IT has been dismal in terms of on-time/on-budget completion, and in terms of project failures. In this case, a Project Delivery Metric might be in order that sets the performance bar from the current 20 percent overrun on budgets to 5 percent variance and from three-months late for on-time delivery to one week.
With this metric and related performance goal in place, the CIO can engage the IT organization to identify the issues and causes for the historic poor performance and the changes that would need to take place in order to achieve the goals. From this, more specific and localized goals can be developed, along with metrics that can track performance. The outcome is a set of metrics that are aligned toward achieving a goal that supports IT's ability to leverage the organization's core business functions.