IBS Journal August 2016
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projects, that the job almost dilutes into a PMO function in most banks. Hardly surprising, given that 100-odd projects of varied size and scale are running at any given point of time.
The Balanced Scorecard helps in prioritising initiatives. If a project is not directly impacting any of the stated strategic objectives, then it is not worth pursuing! Conversely, any objective would need to be supported by an initiative or a project, as its vehicle towards completion. Just as the BSC objectives are measured, it would also be important to set Quality, Time and Cost (QTC) measures and key milestones for the IT initiatives to monitor progress. The IT BSC helps one do just that.
More importantly, this alignment also brings in the discipline of differentiating the means from its end. The projects are only a means to a larger strategic goal. Just as a Lean-Six Sigma Business Process Re-engineering exercise is not an objective, but an initiative that will help address a financial or process objective, a core banking change is also the means to driving a contemporary technology platform in a bank.
4. Measuring individual metrics – key for enterprise performance
The scorecard can remain a theoretical exercise, unless it is made accountable across the appropriate owners of respective objectives and initiatives. Even better, when the Individual Performance Measurement (IPM) is completely aligned to that of the Enterprise Performance
Measures (EPM) as measured by the IT Balanced Scorecard. This tends to positively influence the values and behaviour required of successful IT organisations. The key success factors also include ensuring ‘singularity’ of ownership (collective ownership results in no ownership) and in alignment of the objective- initiative ownership.
Forward looking banks also tend to leverage the BSC as a tool to measure performance of vendors, and create a reward system built around the demonstrated performance of the four perspectives. Typical measures tend to be around transparency in pricing (Financial), Investment in the relationship with the bank (Customer), Quality of Delivery (Process) and Consistency and quality of resources (Learning & Growth). The scorecard also helps drive large transformation programmes and/ or mergers and acquisition programmes, where the integration metrics are set against well defined measures across Quality, Timelines and Monetary budgets. The Balanced Scorecard can also drive partnership and service agreements with suppliers, service providers and business functions.
However, it can only be as effective as it is made to be. Unless performance measures are reported on a monthly basis, and a review is forced by the CIO with his/her direct reports, and the performance (or lack thereof) is explicitly acknowledged, the incentive to perform rapidly diminishes. Remember, people respond well to what is ‘inspected’, much better than to what is ‘expected’.
DRIVING IT STRATEGY THROUGH THE BALANCED SCORECARD
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