|
It Takes a Village to Create a Viable Value Metric
Tom Mantz is no stranger to measurement. Upon graduating from Harvard Business School, he worked with business author and Harvard professor Dick Nolan, whose respected "stages theory" is perhaps the most widely used management framework for IT planning. He also worked with David Norton and Bob Kaplan in the early phases of their collaboration on what led to the creation of the "balanced scorecard" management approach. He took this "measurement thinking" into the real world as the (now-retired) CIO of $6.6 billion industrial gas company Praxair Inc. He observes that:
- In places where successful metrics exist, they are developed jointly with business counterparts.
- Black and white numbers alone do not carry the day. There is always some accountant somewhere who can disprove the numbers if given the opportunity.
- Internal auditors should be involved in the process. They are often the "scorekeepers of last resort."
- If IT uses a tool in isolation from the business, the numbers generated -- no matter how rigorous -- will not be accepted outside of IT. Excel spreadsheets work just fine "if everyone is in the game together."
Williams at First Franklin Financial would agree. He believes that if there are metrics, they must be relevant to both the IT and business communities.
"I am firmly in the camp that IT should both share in the business success of an effective IT initiative, and also share in the lack of success for an ineffective initiative, as measured by financial (or other business-oriented) results," he says. "My experience is that there is generally little real support for that notion, from either the IT or the business sides of the house. The former tend to be focused (and compensated) on simple delivery: 'I did what you asked, on time and within budget; therefore, I am successful.'"
Yet in trying to measure IT's unique contribution, are we doing the right thing? Measuring value is a good thing. Overmeasuring microvalue may actually be wasteful.
In our increasingly interdependent world, where people, processes and technologies are viewed as the base elements of value-creating alchemy, teasing out IT's unique and separate value contribution may be overkill. Doing so may be like trying to figure out which of the two hydrogen atoms or the oxygen atom make the most important contribution to a sip of water. Measurement is addictive. We want to make sure we are measuring on the correct side of the decimal point.
Joe Puglisi, CIO at construction and engineering firm Emcor Group Inc. in Norwalk, Conn., oversees a federated group of midsized regional businesses. From his vantage point as a corporate CIO, he notes that "In many ways, IT is like senior management (CEO, CFO). It underlies the whole of the organization, and its impact, therefore, is pervasive and difficult to measure separately from the performance of the organization. As technology becomes more integral to each and every department, it becomes more difficult to evaluate separately."
Whatever metric you use, you must communicate it effectively to the business. Dennis Klinger, CIO at Florida Power & Light Co. in Miami, explains that finding "the best fit with the company culture" is also significant. "To the extent that I could, I try to enlist key senior management to help form and define metrics," Klinger says. "At FPL more than anywhere else I have been, the company itself is very metrics-focused. The fact that IT began managing with metrics and also tried to parallel existing company metrics helped form a common language and also added credibility."
|
 |
|
|
