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| As information technology is further integrated
into business and in fact "becomes" the business, it is critical
that an enterprise's IT assets be fully, "fluidly" aligned with
business needs and actively managed from an investment perspective (risk,
yield, benefits, etc.), instead of solely from a cost-side perspective,
as is widely practiced today. From this perspective, the financial services metaphors of "portfolio management" and perhaps "fund management" are applicable and essential to the management of new-age IT. Let's define what exactly we mean by Information Technology Performance Measurement. It is an analytical process by which a program or project objectively measures how it is accomplishing its mission through the delivery of IT products, goods, and services. Types of Performance Measures 1. Financial Indicators 2. Efficiency Measures 3. Resource Inputs 4. Outputs/Financial Products 5. Internal Measures of Quality of Products/Services 6. External Customer Needs 7. External Customer Satisfaction 8. Work/Activity Level 9. Timeliness of Product or Service |
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| The literature identified key principles for
developing performance measures of IT ·Leading organizations manage IT projects as investments and rank projects based on maximizing returns and minimizing risks. After initial choices are made, organizations continue to manage and reevaluate IT investments in light of changing priorities in mission and budgets. ·Leading organizations integrate IT funding decisions with overall strategic business planning and direction. Choices among investments are made based on contribution to critical, broad, long-term organizational objectives. The organization's strategic goals are used to plan IT programs. Agencies should therefore develop IT performance measures which are directly related to the strategic objectives of the units it supports. "Internal activities, no matter how efficiently performed, are worthless unless they are contributing to the functioning of the enterprise." ·Users should be viewed as the customers. They should be involved in identifying goals, redesigning work processes to meet these goals, and defining the critical information and technology to support work processes. ·Making analytic processes consistent across the organization makes it easier to identify opportunities to develop IT that can serve more than one function in the organization. A unifying framework for all measures is helpful. ·Developing process improvements without integrating them can lead to fragmentation. This makes it hard to share the benefits of technology throughout an organization and can lead to the duplication of systems. ·To improve performance, information technology must be used to redesign or streamline the work process. ·IT measures should include positive measures. Peers and supervisors frequently use negative factors (problems, complaints, cost overruns, etc.) as the primary means of assessing performance. This leads to a negative bias. ·The total value of information technology is greater than the sum of its parts. For example at a university, the value of a departmental e-mail system is enhanced if the entire campus is also on the network, and is greater still if everyone is connected to the Internet. There is a multiplying or synergistic effect that is hard to quantify. ·Cost measures need to include not only the cost of acquiring the technology but also the costs of technical support and training. More sophisticated technologies usually call for more sophisticated, and more expensive, training, support, and peripherals, and also introduce new sets of incompatibilities and obsolescence of peripherals. Once a new system becomes fully functional, there is usually an increase in the number of users and the types of usage. |
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| Most sources stress the complexity and difficulty
of measuring the impact of IT on organizational outcomes. Among the factors
mentioned are the following: ·As IT costs and resources are distributed throughout organizations, it becomes more difficult to assess whether a system performs as intended. ·As information systems alter business processes, preexisting measures of productivity become obsolete. ·Customer satisfaction measures, whether qualitative or quantitative, are unfamiliar to most IT managers, and outside the direct control of the IT department. However, these are the measures understandable to the user community. ·Cost estimates are difficult to make. Estimates of the life-cycle cost of the technology are moot if the technology becomes obsolete. It should be noted that the life cycle of new technologies is getting shorter making it more difficult for researchers to maintain the necessary competitive edge. ·The cost of training staff needs to be factored into the cost of the technology. In some cases, it may exceed the cost of the technology. ·Each successive generation of information technology brings new levels of performance and functionality making it difficult to compare the costs and outcomes of the new systems with those of older and now obsolete systems. The Performance Measures Life Cycle Integrating Strategic and Performance Plans for continuous improvement Establishing metrics is easy, establishing the right measures is more
difficult.There are generally four uses of performance measures: Things To Be Cautious About In Measuring Information Technology |
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