Implementing the IT Balanced Scorecard: Aligning IT with Corporate Strategy

523 Pages·2005·3.45 MB·English

by  Jessica Keyes

AU2621_half 1/13/05 11:51 AM Page 1
I
MPLEMENTING THE
IT B
ALANCED
S
CORECARD
Aligning IT with Corporate Strategy
Series_A_master Page 1 Friday, January 23, 2004 8:49 AM
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AU2621_title 1/13/05 11:50 AM Page 1
I
MPLEMENTING THE
IT B
ALANCED
S
CORECARD
Aligning IT with Corporate Strategy
Jessica Keyes
Boca Raton London New York Singapore
Published in 2005 by
Auerbach Publications
Taylor & Francis Group
6000 Broken Sound Parkway NW
Boca Raton, FL 33487-2742
© 2005 by Taylor & Francis Group
Auerbach is an imprint of Taylor & Francis Group
No claim to original U.S. Government works
Printed in the United States of America on acid-free paper
10 9 8 7 6 5 4 3 2 1
International Standard Book Number-10: 0-8493-2621-4 (Hardcover)
International Standard Book Number-13: 978-0-8493-2621-9 (Hardcover)
Library of Congress Card Number 2004059480
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Library of Congress Cataloging-in-Publication Data
Keyes, Jessica, 1950-
Implementing the IT balanced scorecard: aligning IT with corporate strategy / Jessica Keyes.
p. cm.
Includes bibliographical references and index.
ISBN 0-8493-2621-4 (alk. paper)
1. Information technology--Management. 2. Management information systems. 3.
Business-Data processing--Management. 4. Strategic planning. I. Title.
HD30.2.K465 2004
658′.05--dc22 2004059480
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Dedication
This book is dedicated to my family and friends.
v

Table of Contents
About the Author............................................................................................xv
Preface...........................................................................................................xvii
1 Why Balanced Scor ecard?............................................................ 1
What Is Balanced Scorecard?...........................................................................2
Attributes of Successful Performance Measurement Systems........................5
Case Studies.......................................................................................................6
Federal Express............................................................................................6
FedEx and the Balanced Scorecard.......................................................8
Federal Acquisition System.........................................................................9
Customer Perspective............................................................................11
Finance Perspective...............................................................................13
Internal Business Processes Perspective.............................................14
Learning and Growth Perspective.......................................................14
Contractor Purchasing System...................................................................15
On to Chapter 2..............................................................................................17
References........................................................................................................24
2 Understanding Per formance Management: Balanced
Scorecard at the Corporate Level ............................................. 27
Understanding Performance Management....................................................29
Step 1: Define Organizational Vision, Mission, and Strategy.................29
Step 2: Develop Performance Objectives, Measures, and Goals...........29
Step 3: Adjustments May Be Necessary...................................................30
Mission, Vision, and Strategy...............................................................30
Techniques for Performance Assessment, Management, and
Improvement...................................................................................................31
Awareness of Strategic Challenge.............................................................31
Vision for the Future.................................................................................32
Innovation...................................................................................................32
Quality Philosophy.....................................................................................33
Value Systems.............................................................................................33
vii
viii (cid:2) Implementing the IT Balanced Scorecard
Ethics...........................................................................................................33
Senior Executive Involvement...................................................................34
Visible Senior Executive Commitment.....................................................34
Supervisor Role in Quality Improvement................................................34
Supervisor Concern for Improvement......................................................35
System or Structure for Quality Improvement........................................35
Awareness of Quality Issues.....................................................................35
Attitudes and Morale..................................................................................36
Cooperation................................................................................................36
Workforce Involvement.............................................................................36
Perceptions of Work Environment............................................................37
Social Interactions......................................................................................37
Tasks and Characteristics...........................................................................37
Rewards and Recognition..........................................................................38
Customer Orientation.................................................................................38
Communications.........................................................................................39
Work Unit Input Measures........................................................................39
Work Unit Output Measures.....................................................................40
Work Unit Efficiency Measures.................................................................40
Work Unit Effectiveness Measures............................................................41
Work Unit Direct Outcomes......................................................................41
Work Unit Impact Measures......................................................................41
Diagnosis.....................................................................................................42
Warranties and Guarantees........................................................................42
Supplier Activities.......................................................................................42
Definition (Senior Executives)..................................................................43
Performance Measurement.............................................................................43
Factor of Production Measures.................................................................44
Input Measures......................................................................................44
Output Measures...................................................................................45
Efficiency Measures...............................................................................45
Effectiveness Measures..........................................................................46
Outcome Measures....................................................................................46
Direct Outcome Measures....................................................................46
Impact Measures....................................................................................47
Work Process Measures.............................................................................47
Cost Effectiveness..................................................................................47
Efficiency Reviews or Management Analysis......................................47
Flowcharting..........................................................................................48
Cost-Based Activity Modeling System (IDEF Modeling)....................48
Theory of Constraints...........................................................................48
Macro Management Analysis Reviews.................................................48
Benchmarking........................................................................................48
Statistical Process Control.....................................................................48
Status of Conditions Indicators............................................................49
Organizational Assessment Tools.........................................................49
Table of Contents (cid:2) ix
Innovation..............................................................................................49
Quality....................................................................................................49
Definition (work units)..............................................................................49
Definition (workforce)...............................................................................49
Internal Customer Activities......................................................................50
External Customer Activities......................................................................50
Strategic Quality Planning.........................................................................51
Organizational Streamlining......................................................................51
Investment and Technology......................................................................52
Methods and Process Improvement.........................................................52
Good Ideas.................................................................................................52
Creativity.....................................................................................................53
Quality Training.........................................................................................53
Feedback.....................................................................................................54
Reward Systems..........................................................................................54
Assessments................................................................................................55
Definition (Teams).....................................................................................55
Measurement...............................................................................................56
Measurement and Process Analysis..........................................................57
Root Cause Analysis..............................................................................57
Organizational Development.....................................................................60
Awareness and Communication................................................................60
Work Flow and Work Delays....................................................................61
Staffing........................................................................................................61
Work Priorities............................................................................................62
Quality.........................................................................................................62
Timeliness...................................................................................................62
Balanced Scorecard at the Corporate Level.................................................63
On to Chapter 3..............................................................................................63
References........................................................................................................63
3 Key Elements of a Balanced Scor ecard Project....................... 65
1. Whom Do We Want to Be?..................................................................65
2. How Will We Get There, and What Goals Do We Have
to Achieve?............................................................................................66
3. What Do We Have to Measure?..........................................................66
Getting Ready..................................................................................................66
Step 1: Make a Commitment at All Levels — Especially at the
Top Level....................................................................................................66
Step 2: Develop Organizational Goals.....................................................67
Step 3: Offer Training in Improvement Techniques...............................67
Step 4: Establish a Reward and Recognition System to Foster
Performance Improvements......................................................................67
Step 5: Break Down Organizational Barriers..........................................67
Step 6: Coordinate Corporate and Departmental Responsibilities.........68
Developing Benchmarks................................................................................68