According to an International City/County Management Association (ICMA) web posting, dated July 10, 2010, by Jeff Friedman – Chief of Staff – Division of Technology for the City of Philadelphia, “We’re looking to put together metrics for the newly consolidated Division of Technology in Philadelphia and I was looking for any examples of balanced scorecard metrics that larger City and County governments were using in the IT space.
No matter whether the preceding message received the attention it deserved or not, the question must be asked: Why is developing an IT Balanced Scorecard so important to the City of Philadelphia’s Division of Technology? To answer this posed question, the reader must examine a few essential facts about Balanced Scorecards and IT alignment.
Balanced Scorecards are performance management enablers
With the introduction of ‘Balanced Scorecard’ theory, management has the option to view the entity from four perspectives and develop metrics, collect data as well as perform analyzes relative to standardized abstraction levels. Organizational balanced score-carding provides a visible prescription regarding what an entity should measure to symmetrize the generally supported financial approach that has overshadowed holistic management.
Fundamental Balanced Scorecard measurement concepts
By definition, the Balanced Scorecard is a management system that enables vision and associated strategy crystallization for focused execution. However, Balanced Scorecard also drives feedback from internal business processes and external outcomes in order to continuously improve strategic performance and results. When managerially integrated, the balanced scorecard transforms strategic planning from periodic documentation drills into addressable governance items. Typically, measures or indicators should be selected from factors that lead to improved employee, customer, operational, and/or financial performance.
Employing entity-centric measurements to improve performance
Performance measures or indicators are assessable products’ or services’ characteristics utilized to track and improve organizational results. Most modern entities depend upon performance measurements and analyses to ensure directional attentiveness. Therefore, measurements should be derived from the entity’s strategy and provide critical data and information about key processes, systems and programs. Correspondingly, one major consideration in performance improvement involves the creation and usage of performance measures or indicators. As a result, through analysis of data generated by deployed tracking processes, adopted measures or indicators may be adaptively evaluated and changed to improve managerial goals support.