Instilling a BPM Mind-Set Into IT Practices

A balanced scorecard for information technology and a portfolio management approach to IT projects can help align the function's performance with corporate objectives.

Heard the one about the CEO in the hot air balloon? He's lost, so he shouts to a woman below, "Please help me. I don't know where I am." She answers, "You're 30 feet in the air, between 40 and 41 degrees north latitude and between 59 and 60 degrees west longitude." "Oh, you must be in IT," says the chief exec. "Yes, how did you know?" "Well, what you told me is technically correct, but I'm still lost." The woman replies, "Oh, you must be in management." "Yes, how did you know?" "You don't know where you are or where you're going, you expect people beneath you to solve your problems, and you're in the same position you were in before we met but somehow now it's my fault."

Harmonizing the IT department's view of the world with senior management's outlook has historically been a challenge at many companies, largely due to misperceptions on both sides about IT's role and strategic value. Today, with IT organizations struggling to meet the due diligence requirements of the Sarbanes-Oxley Act and with more and more CIOs reporting to CFOs, the need to link IT metrics with the company's overall strategic goals has taken on heightened urgency.

"Companies are spending 2 percent to 10 percent of their revenues or more on IT, but they don't know what their ROI is for IT," says Craig Symons, principal analyst with Cambridge, Mass.-based Forrester Research. "An increasing focus on IT governance by boards of directors and executive management has put IT management and the performance of the IT organization under a magnifying glass. IT organizations are increasingly asked to demonstrate the value of IT, vouch for the integrity of the systems and data under their control, simultaneously improve the quality of existing services while reducing their cost, and become a source of enterprise innovation. But it's virtually impossible today to meet even one of these objectives, let alone all of them, without an effective IT performance measurement and management system in place."