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Employee skills, employee satisfaction, availability of information, and alignment could all have a place in this perspective. Many organizations I ve worked with struggle in the development of Learning and Growth measures. It is normally the last perspective to be developed, and perhaps the teams are intellectually drained from their earlier efforts of developing new strategic measures, or they simply consider this perspective soft stuff best left to the Human Resources group. No matter how valid the rationale seems, this perspective cannot be overlooked in the development process. As mentioned earlier, the measures developed in the Learning and Growth perspective are really the enablers of all other measures on the IT scorecard. Think of them as the roots of a tree that ultimately run through the trunk of internal processes to the branches of customer results, and finally to the leaves of financial returns. When creating this perspective, IT organizations should utilize the three areas of capital discussed previously: human, information, and organizational. Human capital relates to the mix of skills and talents required by IT personnel in meeting the strategic requirements of the organization s users. Does your team have the skills and talents required to make the strategic contribution expected of you Of course, IT has its own information requirements, and they should be measured and monitored under the heading of information capital. Finally, and perhaps most importantly, the IT organization must ensure that its culture is in alignment with the needs of its user community. An insular, silo-based culture will not be effective, or tolerated, in organizations that thrive on information sharing and a customer service ethic.
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Financial Perspective Financial measures are a critical component of the Balanced Scorecard, especially in the for-profit world. The objectives and measures in this perspective tell whether strategy execution which is detailed through objectives and measures chosen in the other perspectives are leading to improved bottom-line results. The IT organization could focus all its energy and capabilities on improving customer satisfaction, quality, on-time delivery, or any number of things, but they are of limited value without an indication of their effect on the company s financial returns. Typical examples of financial indicators include profitability, revenue growth, and asset utilization.
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chapter 5
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Most IT organizations use the Financial perspective to shine a penetrating light on their budgets, ensuring they balance effectiveness with efficiency. This perspective is particularly relevant in an era when some Fortune 100 company IT budgets rival the gross domestic product of small nations! Of course I m being facetious, but the underlying message remains resonant IT must avoid the perception of chasing every new technology and instead focus on assisting their customers reach their business goals while doing so with an unrelenting focus on best overall cost. Exhibit 5.3 outlines the typical structure of the Balanced Scorecard as it was originally conceived with profit-seeking enterprises in mind.
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From time to time my phone rings with a request to help turnaround a troubled Balanced Scorecard implementation, and recently I received just such a call. Challenges in executing the Balanced Scorecard can stem from any number of sources, but in this large nonprofit the culprit was a distinct lack of planning. The agency was as unprepared from a planning standpoint as it was enthusiastic about the scorecard. Unfortunately the interest and exuberance they felt for the tool failed to compensate for their lack of organization. Virtually every meeting was slowed to a merciless crawl with discussions of process questions. Team members and other stakeholders were naturally curious about the next steps in the process, but the leaders of the scorecard implementation had barely thought through the current meeting let alone the entire implementation journey.26 This lack of planning significantly slowed what could otherwise have been a very swift and successful implementation. As with any major initiative, the CIO needs a carefully crafted development plan to produce an effective Balanced Scorecard. Every organization is different when it comes to planning and executing significant change efforts. Some feel a highly detailed plan that encompasses thousands of lines in Microsoft Project is the only way to capture all the necessary elements of the work. I recall arriving at the offices of one new client, barely completing introductions to the scorecard team, and having a phonebook-sized plan thrust upon my lap. Others use less formal means, outlining only the most critical tasks and tracking them on MS Excel or Word documents.
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