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DRIVING IT STRATEGY Defining and adopting an IT Scorecard
V Ramkumar, Partner at Cedar Management Consulting International, discusses driving best-in-class strategy via an IT Balanced Scorecard
issues, there are five broad themes: Driving strategic relevance of IT and enablement of superior customer experience; Improving return on IT spend, and enhancing its effectiveness; Continued improvement for next generation banking; Aligning IT applications and technology infrastructure with an overall vision; Enhancing and developing the skills and potential of the IT organisation.
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But a bank’s IT strategy is only as good as its implementation and adoption, a case of designing a good IT roadmap aligned to the strategy, but also a direct result of how disciplined the bank is in implementing it in its day-to-day functions. And that is where the Balanced Scorecard (BSC) helps.
This can articulate strategy across both financial and non-financial (including customer, internal process and organisational) objectives, and facilitates in driving its execution through an effective system of measurement. Ultimately, what gets measured is what gets managed.
Should the bank have a scorecard defined at a corporate level, it becomes even more effective to have a cascaded IT scorecard, although this is neither mandatory or a pre-requisite. Laid out here are four simple steps, the approach to defining and adopting an IT Scorecard for the bank, to help drive a best-in-class IT strategy.
1. Articulate your objectives:
The starting point of a well driven IT strategy is in having it articulated accurately. The crux of this definition process is in having objectives grouped across the four perspectives of the Balanced Scorecard: How should customers (internal and external) perceive the services rendered, addressing their expectations and aligned
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hen it comes to typical bank IT
to the overall IT vision?; What is the value proposition of the IT function to the enterprise, from a financial perspective?; How should the processes be driven across planning, innovation, operational excellence, and how do we improve it?; How should the IT organisation learn and improve? What technology and MIS framework would be required?
There are typically three to five objectives defined for each perspective, and collectively no more than 20 -25 objectives for the overall IT function. Their linkage results in a well articulated strategy map, that defines the cascaded impact of each area over the other.
2. Define measures and set targets:
What cannot be measured, cannot be managed. It therefore becomes imperative that the strategic objectives defined for the IT enterprise are defined by specific measures, both practical and appropriate. These could be lead measures which help in taking preemptive steps, or lag measures that help determine the impact. Mere measurement alone would not be sufficient, unless set against the context of a target that needs to be achieved – which could be conservative, realistic, aggressive or in, select situations, aspirational or breakthrough.
Having set measures and reporting on the basis of a structured scorecard helps as a communication tool – where the impact on business is reported on a tangible metric. It also helps as a management tool, as it looks inward to the IT organisation to manage and monitor IT performance.
3. Align strategic projects: So much of the CIO’s time gets sucked into managing
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