Performance Metrics Every CIO Should Know
In its research report on "IT Value Chain Management – Maximizing the ROI from IT Investments", Alinean highlights the key performance metrics that every CIO should know.
To help meet the demand for benchmarking and value management, five major performance metrics every IT stakeholder should know, measure and manage:
Economic Value Add
IT Spending per Capita
Total Cost of Ownership
Information Productivity®: Information Productivity is a great measure of IT performance comparing the impact IT has delivered with regards to lowering overhead and driving sustainable economic value add. Correlating IT spending versus a performance metric such as Information Productivity, and then comparing this measure with other companies can give a great indication as to which companies are able to derive more or less from their IT investments.
Economic Value-Added: Economic Value-Added™ (EVA) is a better measure of the economic contribution of corporate information management than accounting profits. In judging the performance of corporate information management one must consider that only thirty-nine percent of U.S. industrial corporations deliver a positive economic value-added whereas sixty-six percent of these corporations report positive accounting profits.
Knowledge Capital: IT is entering a new era. To date much of the investing in IT centered on deployment and the accumulation of infrastructure to deliver the utility of computing to workers, the supply chain and customers. The current decade is shaping out to be focused on the maturing of enterprise software and the application of the computing power to optimize business efficiency and effectiveness – business process optimization. The next major frontier will be focusing the battle on a still higher plane –accumulation and optimization of knowledge capital.
Total Cost of Ownership: TCO is defined as the total cost of procuring, using, managing and disposing of an asset over its useful life TCO is only useful if it the spending is compared against performance. High TCO may be warranted if it nets superior bottom-line results, or some other measurable competitive advantage.