Balanced Scorecard and IT Governance on

One PageBy Sourov das14030141080

MBA-IT

What is Balance Scorecard?

Balance Scorecard is a Management Tool that provides stakeholders with a comprehensive measure of how the organization is progressing towards the achievement of its strategic goal.

What does it do?

Balances financial and Non-financial measures Balances short and long-term measures Balances performance drivers(leading indicators) with

outcome measures(lagging indicators) Leads to strategic focus and organizational alignment

Strategy and Balance Scorecard

4 Perspectives in Balanced Scorecard

Financial:

In private companies financial is the main objective(primary goal) In financial perspective, the strategic goal is long term shareholder It is achieved by two factors

Cost efficiency Revenue growth

Customer: For the company, survival customers are

needed Customers perspective has:

Customer satisfaction Customer profitability Customer acquisition Market share Customer retention

An assessment of the product or service quality provided by a business that measures how loyal its customers are.

Customer retention statistics are typically expressed as a percentage of long term clients

Internal process: Internal process perspective reflects the processes in the business

that should be optimized in order to meet the needs of the customers

The four main themes are: Operation management processes Customer management processes Innovation processes Regulatory and social processes

Learning and growth perspective:

Learning and growth perspective reflects capability of the company

The three themes are: Human capital Organization capital Information capital

Advantages and Disadvantages:

Advantages: Get a balanced view of

company performance Sees the financial bottom

line, for not only long term but immediate actions too

Disadvantages: We need to have clearly stated

objectives for solving problems

Overall view of the four areas for concern in business growth and development, these four areas do not paint the whole picture

IT Governance on One Page

Effective governance addresses three questions: What decisions must be made? Who should make these decisions? How will we make and monitor these decisions?

IT Governance:

The top performing organizations implement IT governance most effectively to support their strategies.

Weill and Ross define IT Governance as “specifying the decision rights and accountability framework to encourage

desirable behaviour in using IT” This ensures compliance with the enterprise’s overall vision and values

The effectiveness of IT governance in delivering four objectives Cost effective use of IT Effective use of IT for asset utilization Effective use of IT for growth Effective use of IT for business flexibility

Governance Performance:

Key IT Governance decisions:

Key issues of each IT decision:

Enterprises use one of six decision making archetypes to make each decision. We list these archetypes roughly in order from more to less centralized:

1. Business monarchy: A senior business executive or a group of senior executives, sometimes including the CIO

2. IT monarchy: Individual or groups of IT executives3. Federal: C-level executives and business representatives of all the

operating groups—may include IT involvement (equivalent of the central government and the states working together)

4. IT duopoly: Two party decision making involving IT executives and one group of business leaders

5. Feudal: Business unit or process leaders making separate decisions based on the needs of their entities.

6. Anarchy: Each individual user or small group

Shaded boxes: Represent the models most commonly used for input to decisions

Heavily outline boxes: Highlight the models most often used to actual making the decision

Thank you !