Measuring performance

Background Institutional budgets grow tighter while life-cycle costs of ever-growing IT portfolios continue to accrue—with no end in sight. Consequently, IT organizations in both the private and public sectors are under pressure to demonstrate the value of their IT investments. A recent CIO Insight survey of 404 top IT executives found that 60 percent of respondents say the pressure to calculate return on investment (ROI) for IT is on the rise, while only 2 percent say it’s decreasing.1 And in higher education, a recent survey of CIOs and CFOs2 revealed that 35 percent perceive increasing internal pressures and 27 percent perceive increasing external pressures to report on the value of IT. Yet IT practitioners are all too familiar with the diffi culty of determining IT’s value. Even with a diverse portfolio of methodologies, from the highly quantitative ROI measures Key Findings IT performance assessment and measurement is not widespread. The use of metrics is even less prevalent. Two-fi fths of institutions document objectives at the time IT initiatives are approved. Those that do report more IT alignment. Only one-third of institutions include metrics for assessment at the time IT initiatives are approved (private-sector data show that almost twice that number include measures). The most common method of IT performance measurement is self-assessment. Customer satisfaction surveys are not yet a standard process. Only a few institutions use full methodologies such as the Malcolm Baldridge process or the Balanced Scorecard. Institutions that produce an institution-wide IT plan are more likely to include measures with their IT initiatives as well as publish performance expectations for existing IT services. Institutions where the senior IT leader is a cabinet member are more likely to communicate IT performance through highlevel regular meetings and through an annual IT report.