>Simplifying IT Performance Measures

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There is the old adage that you can only manage what you measure.

The problem is that most IT organizations either aren’t measuring much, aren’t measuring meaningful indicators, or aren’t measuring in a way that is aligned to the business.

Hence, we have organizations that can’t articulate, get their arms around, or seem to improve their IT performance—because they don’t really even know what their performance is—can anyone even spell p-e-r-f-o-r-m-a-n-c-e? While other organizations, turn out 32 page weekly performance reports in 10 point font that brings no true sense of “are we hitting or missing the mark” to anyone.

There is an interesting article in InformationWeek on a simple method for doing performance metrics for IT called “A Simple Scoring System for Complex Times.”

Obviously nothing is so simple, but the basic premise is that the IT organizations uses a scoring system of -1, 0, and +1 to capture the following:

Screw-ups(-1)—This includes systems or network that goes down, projects that go bad, etc. While we want to minimize these, we don’t necessarily want to drive this category to nothing, since the cost for eliminating every possible error likely outweighs the benefits.

Doing the expected(0)—This means keeping operations running or delivery projects on time and within budget. While this does not usually win the IT department lots of kudos, this category of operations is critical because it is about “keeping everything working smoothly.”

The wins (+1)—This is where we innovate for the organization and encompasses adding new functionality and enhancements that create tangible business improvement. “+1 are what it’s all about. They’re why most of us got into this profession in the first place.” Clearly, not everything we do can be +1’s, since we have to maintain basic IT operational functions and not just add the new proverbial “cool stuff”, and also practically speaking because, the organization “can’t absorb the pace of change.”

So to some extent there is a healthy balance between making some mistakes from which we learn and grow (-1), creating an environment of operational excellence (0), and driving innovation for true business impact (+1).

In addition to measuring the indicators that IT organizations set out in their IT strategic and operational plans, this high-level scoring method could add a summary perspective for a straightforward CIO dashboard.

>IT Planning and Enterprise Architecture

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Perhaps many of you have wondered what the relationship is between the IT Strategic Plan and the Enterprise Architecture Transition Plan? Why do you need both? Isn’t one IT plan just like another?

There are many different plans starting with the organization’s strategic plan that drives the IT plan and so forth. Each sequential layer of the plan adds another crucial dimension for the plan to enable it to achieve it ultimate implementation.

The various plans establish line of sight from the highest level plan for the organization to individual performance plans and the implementation of new or changes to systems, IT products and standards, and ultimately to the capabilities provided the end-user.

Here is my approach to User-centric IT Planning:

1. Organizational Strategic Plan—the highest level overall plan enterprise; it identifies the goals and objectives of the organization, and drives the IT Strategic Plan.

2. IT Strategic Pan—the IT Plan for the enterprise; it identifies the IT goals and objectives, and drives the IT Performance Plan.

3. IT Performance Plan—a decomposition of the IT Plan; it identifies IT initiatives and milestones, and drives the IT Roadmap and Individual Performance Plans.

4. IT Roadmap and Individual Performance Plans

a) IT Roadmap—a visual timeline of the IT Performance Plan; it identifies programs and projects milestones, and drives the Target Architecture and Transition Plan.

b) Individual Performance Plans—the performance plans for your IT staff; it is derived from the IT Performance Plan, and provides line of sight from the Organizational and IT Strategic Plans all the way to the individual’s performance plan, so everyone knows what they are supposed to do and why (i.e. how it fits into the overall goals and objectives.

5. Target Architecture and Transition Plan

a) Target Architecture—a decomposition of the IT Roadmap into systems and IT products and standards; it identifies the baseline (As-Is) and the target (To-Be) for new and major changes to systems and IT products and standards.

[Note: Target Architecture can also be used in more general terms to refer to the future state of the organization and IT, and this is how I often use it.]

b) Transition Plan—a visual timeline of the changes for implementing the changes to go from the baseline (As-Is) to the target (To-Be) state for systems and IT products and standards.

6. Capabilities—the target state in terms of business capabilities provided to the end-user derived from the changes to systems, IT products and standards, and business processes; it is derived from the Target Architecture and Transition Plan.

This planning approach is called User-centric IT Planning because it is focused on the end-user. User-centric IT Planning develops a plan that is NOT esoteric or shelfware, but rather one that is focused on being actionable and valuable to the organization and its end-users. User-centric IT plans have line of sight from the organization’s strategic plan all the way to the individual performance plans and end-user capabilities.

Now that’s the way to plan IT!

>Strategy and Enterprise Architecture

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Enterprise architecture develops the organization’s IT strategic plan and influences its business strategic plan. In order to do this, EA itself must have a strategic roadmap.

Harvard Business Review, April 2008, states that “companies that don’t have a simple and clear statement of strategy are likely to fall into the sorry category of those that have failed to execute their strategy or, worse, those that never had one. In an astonishing number of organizations, executives, frontline employees, and all those in between are frustrated because no clear strategy exists for the company or its lines of business.”

Elements of a strategic plan

What are the elements of a strategic plan?

  1. Mission— “why we exist;” this is the purpose of the organization
  2. Values—“what we believe in and how we will behave”
  3. Vision—“what we want to be
  4. Strategy—“What pour competitive game plan will be; this includes the following: A) Objectives—what we want to achieve: goals and objectives B) Scope—“the domain of the business; the part of the landscape in which the firm will operate.” C) Advantage—the means or initiatives that define how you will achieve your objectives; “what your firm will do differently or better than others,” defines your competitive advantage.
  5. Balanced scorecard—“how we will monitor and implement that plan” A strategic plan for EA

    According to the American Management Association, the mission statement defines what the ultimate purpose of the organization is. It tells who you are, what you are, what you do, who do you serve, and why do you exist.

    The mission statement takes the form of: The [blank] is a [blank] that [produces blank] for [blank] to [help blank].

    For example, the mission statement for enterprise architecture:

    The [enterprise architecture program] is an that [develops information products and governance services] for [the employees of ABC organization] to [improve decision-making].

    The values of EA are: driving measurable results, aligning technology with the business, information-sharing and accessibility, service interoperability and component reuse, technology standardization and simplification, and information security.

    The vision of EA is to make information transparent to enable better decision-making.

    The strategy provides the conceptual way you will pursue your mission and vision.

    Defining the objective, scope, and advantage requires trade-offs, which Porter identified as fundamental to strategy.” For example, a growth or market size strategy may obviate profitability, or a lower price strategy may hinder fashion and fit. The point is that an organization cannot be everything to everybody! Something has got to give.

    So for example, in EA, we must trade off the desire to be and do all, with the reality that we must focus on entire enterprise. Therefore, we distinguish ourselves from segment architecture and solutions architecture. In EA, we focus on strategic outcomes and delegate line of business architectures and systems architectures to the lines of business and solution developers.

    Finally, EA implements a balanced scorecard by instituting mechanisms for monitoring and implementing its plans. These include performance metrics for both information products and governance services.

    In sum, to get a meaningful EA plan in place, we have to answer these fundamental elements of strategy for the EA program itself.

>SWOT Analysis and Enterprise Architecture

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“SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.”

SWOT factors can be broken down in internal/external factors and helpful/harmful factors, as follows:

  • INTERNAL/EXTERNAL—SWOT looks at both organizational or internal factors (strengths and weaknesses) and environmental or external factors (opportunities and threats).
  • HELPFUL/HARMFUL—SWOT examines those factors that are helpful (strengths and opportunities) and harmful (weaknesses and threats) to an organization’s objectives .

SWOT analysis is used to generate strategies, as follows:

  1. How can we use each strength?
  2. How can we stop each weakness?
  3. How can we exploit each opportunity?
  4. How can we defend against each threat?

(Adapted from Wikipedia)

According to the American Management Association, “SWOT is perhaps most useful as a tool for organizing data and allowing you to distill them down to a few strategic priorities.”

SWOT Analysis is a tool that can be used by User-centric EA in analyzing the business and technology baseline of the enterprise and coming up with strategic priorities to address in the target architecture and transition plan. Of course, the target architecture will capitalize on organizational strengths (by building on the strength of its people, process, and technologies), mitigate weaknesses (through skilled performance management, business process improvement, information sharing, and technological solutions), exploit opportunities and defend against threats (through integration and differentiation, partnerships and alliances, marketing and communciations, and so on). SWOT Analysis tells the EA practitioner what he/she needs to know to develop strategies for the enterprise to target.

>IT Strategic Plan and Enterprise Architecture

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User-centric Enterprise Architecture supports the development of a meaningful IT strategic plan for the organization. Based on my experience in strategic planning, there are a number of core goals that should be represented in the IT Strategic Plan. These are as follows:

  1. Information —delivering the right information to the right people at the right time; providing for information management, including information sharing, information assurance, privacy, accessibility, and records management.
  2. Technology — developing and maintaining a sound, secure, reliable, cost-effective IT infrastructure that enables mission execution.
  3. Process — supplying world-class service to customers, by providing defined, repeatable, and measurable processes for systems development life cycle, configuration management, change control, and problem resolution; also, facilitating business process improvement and reengineering.
  4. People — ensuring the education, training, certification, and personal and professional development of IT staff.
  5. Governance — managing IT though structured governance processes including capital planning and investment control, enterprise architecture, IT planning, and portfolio management.
  6. Stewardship — administering resources including IT assets, finance, and human capital for the design, development, maintenance, and operation of IT solutions.

Together, these six goals provide the foundation for a sound IT strategic plan.

As a visual representation, I see these goals in the following way: First there is a Venn diagram in the center composed of People, Process, and Technology. This diagram is surrounded by a circle made up of sound Governance. Emerging from this circle and Venn diagram is Information (and IT capability) provided to the organization to optimize business processes and enable mission execution. And underlying all this is a foundation of responsible Stewardship of IT resources.

>Strategy and Enterprise Architecture

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There are many schools of thought when it comes to strategic planning in which the organization develops its strategic plan through the following means:

  • Design – facilitating a fit between the internal capabilities and external possibilities; strategy is prescriptive.
  • Positioning – selecting the competitive positions in the marketplace they desire to occupy (examples include: low cost leader, high quality supplier, niche player, #1 service provider, and so on).
  • Entrepreneurial – grounding it on the leader, who is the visionary guiding the organization forward; there is no formal strategic plan.
  • Cognitive – understanding and responding to how customers and competitors perceive us.
  • Power – Negotiating, persuading, networking, developing alliances, and lobbying; all based on power and politics.
  • Cultural – Deriving organizational shared beliefs and social interactions.
  • Learning – trial and error based on results of strategy implementation.

(Adapted from American Management Association)

In User-centric EA, it is helpful to understand all these approaches to strategic planning. The schools of though are not mutually exclusive, but rather all affect—to a greater or lesser degree—how the EA target and transition plan is formed.

What I believe is fascinating is that planning is only partially about the plan itself (i.e. what the plan actually contains and prescribes), and that much of planning is about the process for developing it.

The process of planning benefits the organization almost as much as the end-product plan itself, since the process is a journey of self-discovery for the organization. In other words, if the plan was just dropped on the organization—without the process of having developed it—it would be of little to no value. The process of planning teaches the organization what it is currently, what challenges and opportunities it faces, and how to adapt, incrementally change, and occasionally transform itself. The planning process is quite involved and often includes aspects from all the schools of thought, including: designing a capabilities-possibilities fit for the organization, positioning it in the marketplace, incorporating the vision of the leader, identifying perceptions of customers and competitors, navigating through organizational politics, realizing a shared organizational culture, and continuous learning through it all.