Benchmarking for performance management

Three must-dos for successfully using benchmarking when implementing an IT scorecard.

by Robert A. Ryan – The overall objective of performance management is to track organizational performance through specific performance measures, commonly referred to as an IT scorecard.

[ Developing an IT scorecard ]

Using benchmarking to develop performance measures is a critical part of creating an IT scorecard. But it is a challenging effort that will require you to commit time and effort both in the initial development and the ongoing evolution.

Here are 3 must-dos for successfully using benchmarking when implementing an IT scorecard for your organization:

1. Determine potential target organizations to benchmark your current performance against. One common misconception about benchmarking is that you should select only external organizations in your industry as target benchmark organizations. Before looking outside your IT organization, consider looking internally across your organization for a best practice approach to a specific activity, such as server provisioning, and share this approach across your organization. This is a common approach to benchmarking in large, geographically dispersed organizations.

A second common approach to selecting benchmarking targets is functional benchmarking. In this approach, you look for best practices on a specific activity across all industries. The focus is on functional best practices in IT operations, which is not industry-specific.

A third common approach is to target competitor IT organizations in your industry for a specific best practice existing only within your industry.

[ Implementing an IT scorecard ]

2. Determine available sources of IT benchmark information. Benchmark information is collected by a number of major consultancies and the APQC. In addition, two sources of benchmark information specific to the IT industry are:

Standard Performance Evaluation Corporation (SPEC) – this non-profit was formed to establish, maintain, and endorse a standardized set of relevant benchmarks that can be applied to the newest generation of high-performance computers.

Transaction Processing Performance Council (TPC) – this non-profit was founded to define transaction processing and database benchmarks and to disseminate objective, verifiable TPC performance data.

3. Determine the targets and time intervals for initial improvement in IT performance. When you develop your IT scorecard you will select an initial set of IT performance measures to track. While you will need to determine your current level of performance for each selected measure, you should use your benchmark data to determine what target level of performance to set as an achievable goal. Concurrent with this setting of a target performance level, you will also need to determine a timeline by which to achieve these goals. Without improvement targets, and related timelines to achieve these targets, efforts will often stall out and be overtaken by daily operations.

Bob Ryan is co-author, along with Tim Raducha-Grace, of The Business of IT: How to Improve Service and Lower Costs", published by Pearson/IBM Press, Sept. 2009, ISBN 0137000618, Copyright 2010 by International Business Machines Corp.

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