A balancing act to ROI

In bowling, earning three strikes is a good thing. But in baseball, a strike has a very different meaning. It all depends on the scorecard you're using. The right scorecard is also important when trying to hit a home run with your enterprise IT strategy.

In bowling, earning three strikes is a good thing. But in baseball, a strike has a very different meaning. It all depends on the scorecard you’re using.

The right scorecard is also important when trying to hit a home run with your enterprise IT strategy. To clearly measure ROI takes more than a simple analysis of financial outcome. The interdependence that has developed between technology and business objectives demands that you consider a project’s consequences throughout the enterprise.

To acquire this insight, more and more information chiefs are turning to the balanced scorecard model.

The balanced scorecard helps forecast the impact of strategic decisions on the enterprise by factoring metrics from four key areas: internal process efficiency and effectiveness, customer perception, education and innovation within the enterprise, and financial gain.

Large-scale IT rollouts can be unwieldy and, in the case of ERP (enterprise resource planning) and CRM (customer relationship management), involve several enterprise divisions.

A balanced scorecard helps sync performance indicators to the operational processes that influence them, allowing you to align corporate strategy and resources to their full potential.

Balanced scorecard applications come in a variety of flavours, ranging from targeted point solutions, such as those from Panorama Business Views, ActiveStrategy and Cognos, to broader performance management applications as produced by PeopleSoft, Oracle and SAP.

These applications run the gamut from offering highly aggregated data views with little additional functionality, to providing high-level insight with drill-down data analysis and forecasting.

Scorecard tools frequently include features for documenting your progress, reporting, creating what-if scenarios, making graphical visualisations, and can include industry-specific benchmarks for general comparison.

Learning to manipulate the tools can often be challenging. Knowing the right metrics to measure and how to interpret the findings is something you won’t get from a box. But the long-term benefits are worth the effort for enterprise-scale processes.

If you’re looking for more information, check out the Balanced Scorecard Collaborative, founded by David Norton and Robert Kaplan, the originators of the concept.

When used properly, a balanced scorecard can serve as more than a simple administrative planning tool. It can help influence expectations and accountability integral to a project’s success.

Balanced scorecard will help you knock the ROI of your next project out of the park.

How do you gauge your success?

James Borck is managing analyst in the InfoWorld Test Centre.

Join the newsletter!

Error: Please check your email address.

Tags roiscorecard

More about CognosCognosKaplanNortonOraclePeopleSoftSAP Australia

Show Comments
[]