The IT balanced scorcard
The IT Balanced Scorecard A Roadmap to Effective Governance of a Shared Services IT Organization Ronald Saull, CSP
The essentials of this study were delivered at the ISACA International Meeting and Conference in July of 1999 in Denver, Colorado, USA by Ronald Saull. The discussion and study results were based on events that occurred and dynamics in place at Great-West Life Assurance Company/ London Life/Investors Group, Canada, signified by the acronym GLI.
As investments in information technology continue to increase, so too does the reliance of most organizations on their in-place technical infrastructure and the performance of their IT function. Boards of Directors, executive management, CIOs audit and regulatory bodies, and IT professionals are becoming increasingly focused on the issues of ensuring value is received for IT investments and managing the risks they introduce. This article discusses the application of the balanced scorecard as a management tool to assist a shared services IT organization in creating a governance model which best serves the interests of its sponsoring organizations and their stakeholders.
Defining the Balanced Scorecard (BSC)
Beginning in 1992, Kaplan and Norton wrote a series of articles which introduced the concept of the balanced scorecard. They proposed the development of a set of measures that would give top managers a fast but comprehensive view of the business. They believed that traditional financial measures needed to be supplemented with the key operational measures which determined financial success. These operational measures were to add three perspectives: customer, internal business and learning and innovation, thus creating a balance of emphasis on the desired outcomes and the means of achieving them.
Kaplan and Norton believed the real value of the BSC method was as a strategic management system. In order to do so, their balanced measurement framework should be used to clarify vision and strategy,
The essentials of this study were delivered at the ISACA International Meeting and Conference in July of 1999 in Denver, Colorado, USA by Ronald Saull. The discussion and study results were based on events that occurred and dynamics in place at Great-West Life Assurance Company/ London Life/Investors Group, Canada, signified by the acronym GLI.
As investments in information technology continue to increase, so too does the reliance of most organizations on their in-place technical infrastructure and the performance of their IT function. Boards of Directors, executive management, CIOs audit and regulatory bodies, and IT professionals are becoming increasingly focused on the issues of ensuring value is received for IT investments and managing the risks they introduce. This article discusses the application of the balanced scorecard as a management tool to assist a shared services IT organization in creating a governance model which best serves the interests of its sponsoring organizations and their stakeholders.
Defining the Balanced Scorecard (BSC)
Beginning in 1992, Kaplan and Norton wrote a series of articles which introduced the concept of the balanced scorecard. They proposed the development of a set of measures that would give top managers a fast but comprehensive view of the business. They believed that traditional financial measures needed to be supplemented with the key operational measures which determined financial success. These operational measures were to add three perspectives: customer, internal business and learning and innovation, thus creating a balance of emphasis on the desired outcomes and the means of achieving them.
Kaplan and Norton believed the real value of the BSC method was as a strategic management system. In order to do so, their balanced measurement framework should be used to clarify vision and strategy,
References: CSC Index, Foundation Operational Excellence Report (1998). Valuing the IS Contribution to the Business. Gartner Group (1998). The IT Scorecard Program Introduction and Overview. Kaplan, R. and Norton, D. (1996). The Balanced Scorecard: Translating a Strategy into Action. Harvard Business School Press, Boston. Meyer, N. Dean (1998). Road Map: How to Understand, Diagnose, and Fix Your Organization. NDMA Publishing, Ridgefield, CT. Parker, M. (1996). Strategic Transformation and Information Technology. Prentice Hall, Upper Saddle River, N.J. Van Grembergen, W. and Van Bruggen, R. (1997). Measuring and Improving Corporate Information Technology through the Balanced Scorecard. University of Antwerp.